FOR IMMEDIATE RELEASE TUESDAY, MARCH 5, 2002 WWW.USDOJ.GOV TAX (202) 514-2007 TDD (202) 514-1888 WASHINGTON, D.C. The Department of Justice today filed a civil suit in federal court in Illinois directing three persons and their organization, "the Joy Foundation," for promoting an illegal tax scheme. The government alleged that the defendants charge thousands of dollars for materials and courses containing false or fraudulent statements about the income tax laws. Yesterday, the Department filed a similar suit in federal court in Chicago seeking to stop an alleged abusive tax scheme promoted by two Chicago-area men, Michael D. Richmond and Rex E. Black.
"This lawsuit is part of the Justice Department's ongoing effort to stop abusive tax schemes at their sourcethe promoters who peddle them," said Eileen J. O'Connor, Assistant Attorney General for the Department of Justice's Tax Division. "The Tax Division is committed to bringing appropriate legal action to uniformly enforce the tax laws Congress enacts. We will take the necessary action to stop people who attempt to defraud the public using this and other abusive tax plans." According to the complaint, filed in the United States District Court in Peoria, Illinois, the defendants, Robert Lawrence, Yvonne M. Malone, Jack L. Malone, and the Joy Foundation, disseminated false statements about the tax laws, advising taxpayers to: * not file income tax returns, * improperly attempt to avoid tax withholding from wages, * transfer assets to bogus trusts, and * not pay federal income tax.
According to the complaint, the defendants charged customers $1,650 to join the Joy Foundation. For this fee, the defendants' programs allegedly assist customers in "un-volunteering" from the federal income tax system through a number of steps. The Joy Foundation instructs customers to begin sending a series of letters to the IRS that will, the defendants claim, decrease the risk of IRS audit and defeat criminal charges based on willfulness. The complaint further alleges that the defendants teach Joy Foundation customers how to evade IRS collection efforts.
The complaint states that the defendants' promotional activities at a Mitsubishi Motors plant and elsewhere in the Peoria area recruited current or former Mitsubishi employees as Joy Foundation members. The government further alleges that a number of Mitsubishi employees have attempted to prevent Mitsubishi from withholding federal income tax from their wages and have stopped filing federal income tax returns. The complaint states that the defendants promote their programs on numerous websites.
The complaint notes that a federal court in Florida last month directed Joseph Sweet, who is affiliated with the Joy Foundation. The government asks the Illinois federal court in today's filing to order the defendants to stop promoting their scheme and to turn over to the government a list of participants.
"The law is crystal clear that people must pay their taxes," said IRS Commissioner Charles O. Rossotti. "There is no gray area on this issue. For decades, the courts have consistently upheld the tax law." People hearing about tax benefits that sound "too good to be true" should check them out with a trusted tax professional or the IRS. Anyone with information about suspected tax fraud should report it to the IRS tip line at 1-800-829-0433. 02-121
Source: US Department of Justice
