A federal jury convicted a Potomac businessman in connection with a $22 million tax evasion scheme that involved a corrupt IRS agent.
Irvin Catlett, the owner of Tax Resolutions in Laurel, orchestrated the scam and paid an Internal Revenue Service officer to provide taxpayer information and pose as Catlett’s “man on the inside” to convince clients that the tax shelter was safe from prosecution, according to the U.S. attorney for Maryland.
Catlett and his conspirators filed about 275 bogus tax returns reporting $22 million in total losses, and resulted in a loss of $3.8 million in tax revenue to the United States.
U.S. Attorney Rod J. Rosenstein warned citizens of dealing with tax preparers who make pie-in-the-sky promises.
“People who want to reduce their taxes should seek reliable and independent advice and avoid con artists selling magical schemes that are too good to be true,” Rosenstein said.
Catlett faces up to 38 years in prison: five years in prison for conspiracy to defraud the IRS; three years in prison on each of 10 counts of assisting in the preparation of false tax documents; and three years in prison for obstructing IRS laws. He is scheduled to be sentenced Feb. 17 at the U.S. District Court in Greenbelt.
Authorities said Catlett, Walter Cullum and James Unterreiner II convinced clients of Catlett’s company, Tax Resolutions Inc., to “invest” in three car sale companies. The investments, however, were really payments to Catlett for bogus tax losses that the car companies would claim to the IRS. They then prepared tax filings for their clients claiming the business losses on the clients’ returns. Prosecutors said Catlett, Cullum and Unterreiner would first determine what clients would owe on their taxes without the tax shelter, and then make the fake business loss large enough to reduce the clients’ taxable income to zero.
Mark E. Hunt would display his IRS credentials during meetings with clients to assure them that he was an IRS employee who could protect them from the “inside,” prosecutors said. Hunt also accessed the IRS databases to retrieve confidential taxpayer information, prosecutors said.
Hunt, Cullum and Unterreiner pleaded guilty earlier this year.
Tax Resolutions Inc. clients have not been charged, authorities said.
