March 29,2001

Grassley Announces Hearing on Tax Schemes, Scams and Cons

Hearing: “Taxpayer Beware: Schemes, Scams and Cons”

Date/time: Thursday, April 5, 2001, at 10 a.m.

Location: 215 Dirksen Senate Office Building

Description: The Internet provides an ideal venue for con artists to promote schemes aimed at taxavoidance. Both tax practitioners and the Internal Revenue Service agree thatInternet-based tax fraud scams are on a sharp increase. They believe hundreds ofthousands of taxpayers are either participating in these schemes or are seriouslyconsidering participating in them by receiving literature and attending seminars.

Common themes for these scams are trust arrangements to illegally shelter trustincome from taxes and other means of hiding assets. More off-beat scams includequick minister licensing to illegally claim tax benefits, as well as individualsestablishing their own countries to seek to shelter assets and income.

Sen. Chuck Grassley, chairman of the Committee on Finance, will convene a hearingto educate taxpayers about tax fraud scams before the April 15 tax filing deadline.He also will explore ways to improve the federal government’s policing of Internetbasedtax schemes, scams and cons.

Witnesses include a former seller of tax scams who now runs a web site alertingtaxpayers to the scam he helped to run and a federal prison inmate who participatedin a tax scheme and is now serving a 27-month prison sentence for failing to report$1.5 million in taxable income to the IRS. He deposited receipts from his dentalpractice into fraudulent trusts. In addition, the committee will hear from the IRScommissioner, as well as the nation’s leading private sector experts on Internet-basedtax fraud.

A final witness list will be available later.