Route To Recovery
A team of Reuters journalists toured America in November 2009 to examine the impact of the recession and the prospects for recovery. Here's what they uncovered. Full Article | Full Coverage
U.S. sues two for making tax millions "disappear"
KANSAS CITY, Missouri (Reuters) - The U.S. government filed lawsuits against two Missouri men on Thursday, accusing them of helping wealthy business owners across the United States avoid paying taxes in actions that cost the government "hundreds of millions of dollars."
Justice Department attorneys said in the complaint that lawyer A. Blair Stover Jr. and accountant Allen Davison promoted numerous tax-fraud schemes, including setting up sham companies and helping customers improperly make use of Roth Individual Retirement Accounts to avoid taxes.
Davison, a tax advisor and attorney, was known as "Dr. Poof" for his ability to make tax liabilities for customers "disappear," according to the government complaint.
He worked in partnership, the government alleged, with Stover, a 46-year-old Kansas City attorney.
The government is asking for the two to be permanently barred from giving tax advice or representing customers before the Internal Revenue Service.
Neither man could be reached for comment but Davison is currently defending his practices to the IRS on behalf of customers in cases in U.S. Tax Court, the Justice Department said.
The government alleged that since the mid 1990s, the two men have developed a nationwide customer base of wealthy business owners and business operators in the real estate, engineering and automotive sales industries. The two have a particularly large clientele in the Midwest, the government said.
According to one of the complaints, a Kansas insurance broker followed advice from Davison in claiming $1.25 million in deductions related to operating a chicken flock, but ultimately admitted to the IRS he had never been a farmer.
Also according to the complaint, one Stover customer used a sham Roth IRA scheme for four years to evade paying federal income tax on more than $57 million in income, improperly saving more than $20 million in taxes.
"The amount of tax loss caused by Davison's promotions is incalculable but likely in the hundreds of millions of dollars," the complaint stated.
The government said it sought to stop Stover and Davison because pursuing each of their customers individually "may be an insurmountable obstacle."
(Reporting by Carey Gillam, editing by Jackie Frank)
