WASHINGTON, D.C. - The Department of Justice today filed a lawsuit in federal court in Tampa, Fla., to stop Gregory T. Mayer, who does business in his own name and as Legal Tax Newsletter, LC and Morton & Oxley, LTD, from promoting several different tax scams. Illegal schemes included "Section 861" arguments, named after the tax code section that it misrepresents, and a scheme based on the use of multi-tiered, sham trusts to conceal income and assets from the Internal Revenue Service. The suit also seeks to prevent Mayer from preparing federal tax returns and representing clients before the IRS.

"Tax schemers enrich themselves by helping others violate the law," said Eileen J. O'Connor, Assistant Attorney General for the Justice Department's Tax Division. "Shutting down tax scam promoters is a high priority for the Justice Department."

Today's suit is the latest in a series of cases brought by the Justice Department to shut down promoters of the Section 861 argument, who falsely claim that income from sources in the United States is not subject to federal income tax. Courts in these cases have described the argument as "frivolous and without merit" and "nonsensical."

Within the last two years, the Justice Department has obtained injunction orders against six other Section 861 promoters: Harold Hearn of Atlanta; David Bosset of Spring Hill, Fla.; Douglas Rosile of Venice, Fla.; Thurston Bell of Hanover, Pa.; Carel "Chad" Prater of Sarasota, Fla.; and Everte Farnell of St. Petersburg, Fla. More information about these cases can be found at: http://www.usdoj.gov/tax/index.html.

Tax scams, including fraudulent tax-return preparation, cost taxpayers billions of dollars every year. According to a General Accounting Office report (GAO-02-733) issued last year, however, stepped-up efforts by the IRS and Justice Department to crack down on these scams have led to increasing numbers of convictions of tax fraud promoters. The report can be found online at http://www.gao.gov/new.items/d02733.pdf.

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