FLORIDA LAWYER SENTENCED TO PRISON FOR VIOLATING COURT ORDER TO STOP PROMOTING ABUSIVE SCHEME

WASHINGTON, D.C. - Gainesville, Fla. lawyer Milton H. Baxley II, was sentenced to 18 months in prison and a $10,000 fine for committing contempt of court by violating an injunction that barred him from promoting an abusive tax scheme, the Justice Department announced today.

On Aug. 9, 2006, a jury convicted Baxley on two counts of violating a Dec. 29, 2003 federal district court order enjoining him, five other people, and three businesses from promoting, selling or advising individuals as to certain matters relating to federal taxes and the IRS. More information about the injunction Baxley violated can be found at: http://www.usdoj.gov/tax/txdv03730.htm and www.usdoj.gov/tax/BaxleyII_PermIn.pdf.

According to the court, Baxley was connected with American Rights Litigators (ARL), also known as Guiding Light of God Ministries (GLGM), an organization headed by Eddie Ray Kahn that promoted a tax-fraud scheme. The court found that ARL/GLGM sold customers letters to send to the IRS making frivolous arguments that the customer was not liable for federal taxes. Baxley also sold complaints for customers to send to the Treasury Inspector General for Tax Administration (TIGTA) falsely accusing individual IRS employees of misconduct. The court found that Baxley gave ARL/GLGM permission to use his name and facsimile signature on the frivolous correspondence and false TIGTA complaints, and that Baxley continued to write such frivolous documents to the IRS on behalf of his clients.

In a related scheme, on Oct. 17, 2006, an eight-count indictment was unsealed charging Wesley Trent Snipes, Eddie Ray Kahn, and Douglas P. Rosile with conspiracy to defraud the Internal Revenue Service (IRS) and presenting a fraudulent claim for payment to the IRS. That indictment alleges that Snipes, Kahn, and Rosile attempted to make it appear as if Snipes had no liability for federal income taxes, when, in fact, Snipes had such tax liabilities. As part of the scheme, the defendants allegedly prepared and filed two amended federal income tax returns for Snipes, fraudulently claiming refunds of 1996 and 1997 income taxes, totaling almost $12 million. The indictment also alleges that Snipes did not file his 1999 through 2004 federal income tax returns. More information on this case is available at: http://www.usdoj.gov/usao/flm/pr/2006/oct/20061017_Tax%20Fraud.pdf.

Since 2001, the Justice Department has obtained injunctions against more than 205 return preparers and tax-fraud promoters. Information about these cases is available at: http://www.usdoj.gov/tax/taxpress2006.htm. Information on the Justice Department’s Tax Division is available at: http://www.usdoj.gov/tax/index.html.

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