COURT BARS OKLAHOMA MAN’S TAX FRAUD SCHEMES

Tulsa-area Man Promoted “Corporation Sole” and “Claim of Right” Programs

WASHINGTON, D.C. - The Justice Department announced today that a federal court has barred Richard M. Blackstock, who resides in the Tulsa, Oklahoma area, from selling two fraudulent tax schemes known as the “corporation sole” and “claim of right” programs. The order requires Blackstock to file with the court a list identifying his customers’ names, addresses and Social Security or tax identification numbers, and to remove materials about the promotions from his website. The order was entered by Judge Terry L. Kern of the U.S. District Court for the Northern District of Oklahoma.

The court found that Blackstock had falsely advised prospective customers that the corporation sole program could exempt them from income taxation if they transferred income and assets to a so-called corporation sole and claimed that it was a church. Addressing the claim of right program, the court found that Blackstock had falsely told customers that compensation for labor is not taxable, and that they could get refunds of past taxes paid. The court found that Blackstock charged customers $2,295 for the corporation sole program and at least $1,095 for the claim of right program.

“People who buy schemes purporting to eliminate their federal taxes are not only wasting their money, but also risking serious penalties and possible prosecution,” said Eileen J. O’Connor, Assistant Attorney General for the Justice Department’s Tax Division. “The Justice Department and the Internal Revenue Service are working methodically and effectively to detect and stop the promotion of such schemes.”

Court papers alleged that Blackstock worked with Joseph O. Saladino, through an organization called the Freedom & Privacy Committee, in promoting the schemes. Earlier this year, a federal court in Los Angeles barred Saladino and the Freedom & Privacy Committee from promoting the corporation sole and claim or right schemes. Courts in Colorado, Texas and North Carolina also permanently enjoined Saladino-related promoters from promoting the same types of schemes.

Martin M. Shoemaker, a trial attorney in the Justice Department’s Tax Division, represented the government in this case. More information about this case and related cases is available at http://www.usdoj.gov/tax/txdv05030.htm, http://www.usdoj.gov/tax/txdv05005.htm, http://www.usdoj.gov/tax/prtax/txdv04192.htm, http://www.usdoj.gov/tax/prtax/txdv04220.htm, http://www.usdoj.gov/tax/txdv04709.htm, http://www.usdoj.gov/tax/txdv04700.htm, and http://www.usdoj.gov/tax/txdv04639.htm.