San Francisco judge swoops on unlawful tax schemes
A US Federal judge swoops on an insurance salesman and unlawful scheme helping customers avoid $25m in tax
A federal judge in San Francisco has ordered an insurance salesman, Edwin
Lichtig, and his company GSL Advisory Solutions, to stop promoting unlawful tax
schemes, said to have helped his customers avoid more than $25m (£16.5m) in tax
though an insurance and individual retirement account (IRA) scheme.
The defendants agreed to the permanent injunction order without admitting
fault. The US government sued Lichtig and GSL, alleging they promoted tax fraud
schemes involving IRAs which helped customers improperly avoid federal income
tax on more than $25m.
The US government claimed, Lichtig promoted a scheme called PAT (Pension
Asset Transfer), which helped customers improperly avoid income tax on untaxed
assets held in their IRAs through transactions with sham businesses,
self-employed retirement accounts and understatements of the value of life
insurance policies.
‘Stopping tax fraud schemes involving misuse of retirement accounts is a high
priority for the Justice Department’s Tax Division,’ Nathan Hochman, assistant
attorney general for the tax division, said. ‘Since 2001, the division has
obtained injunctions against more than 360 tax return preparers and tax-fraud
promoters.’