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Quatloos! > Tax Scams > Tax Protestors > EXHIBIT: Tax Protestor Dummies 2 > Cases

Tax Protestor Cases Exhibit
("Damn, We Lost Again! And why is it that people who sell
tax protestor materials file
their tax returns anyway . . .")


February 13, 2001

[1] WASHINGTON, D.C. -- The Department of Justice filed a civil suit to halt the sale of tax plans written and promoted by Joseph N. Sweet and EDM Enterprises, both of Bradenton, Florida, that allegedly encourage taxpayers to violate tax laws.

[2] According to the complaint, filed late yesterday in U.S. District Court in Tampa, Sweet and EDM Enterprises advise or encourage taxpayers to violate the tax laws in a book written by Sweet and sold by him and EDM Enterprises, along with other tax planning advice and services.

[3] The book, titled "GOOD NEWS For FORM 1040 Filers: Your Compliance is Strictly VOLUNTARY! BAD NEWS For The IRS! Everything You Ever Needed to Know About the Income Tax That the IRS Is Afraid You'll Find Out," allegedly advises taxpayers not to file federal income tax returns with the IRS or pay federal taxes, under the theory that wages are not taxable income.

[4] The complaint also alleges that Sweet and EDM Enterprises, in the book or orally, make a number of other false or fraudulent statements, including claims that the filing of federal income tax returns is voluntary and that individuals are exempt from the internal revenue laws that require the withholding of federal income and social security taxes.

[5] In addition, the complaint alleges that form letters and other documents contained in the book show taxpayers how to avoid wage withholding by their employers even though these taxpayers are subject to withholding under the law.

[6] Sweet and EDM Enterprises also improperly advise taxpayers that non-wage income can be sheltered from federal income tax through business trusts that Sweet and EDM establish and sell, the complaint alleges.

[7] According to the complaint, at least 650 individuals have purchased books and other plan materials and at least 400 trusts have been purchased from Sweet or BDM Enterprises. The estimated potential loss of revenue as a result of Sweet's and EDM Enterprises' conduct exceeds $6.5 million.

[8] Claire Fallon, Acting Assistant Attorney General of the Tax Division, Department of Justice, said, "The use of trusts to illegally evade taxes is under close scrutiny by the Internal Revenue Service and is an enforcement priority for the Department. We hope that taxpayers are aware that there are a number of abusive trust schemes being promoted so they will be careful to avoid being victimized."

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