FEDERAL COURT BARS WASHINGTON STATE WOMAN FROM FALSELY PROMOTING CORPORATION SOLE PROGRAM

Gig Harbor Promoter Formed Hundreds of Corporations Sole

WASHINGTON, D.C. - A federal court in Tacoma, Wash., has permanently barred Rita I. Johnson from falsely promoting her corporation sole program, the Justice Department announced today. The civil injunction order, signed by Judge Ronald B. Leighton of the U.S. District Court for the Western District of Washington, requires Johnson to stop making false statements about the tax benefits associated with her program. The injunction also applies to Johnson’s business, Equity Preservation Association.

As the judge stated in his order, “While a ‘corporation sole’ is a legitimate corporate form that may be used by a religious leader to hold property and conduct business for the benefit of the religious entity, a taxpayer cannot avoid income tax by establishing a religious organization for tax avoidance purposes.”

The Justice Department has obtained permanent injunctions against a number of people who sell corporation sole scams. Two examples are found at http://www.usdoj.gov/tax/txdv05657.htm and http://www.usdoj.gov/tax/txdv05657.htm.

Since 2001 the Justice Department has obtained injunctions against more than 220 preparers and tax fraud promoters. Information about these cases is available at: http://www.usdoj.gov/tax/taxpress2007.htm. Information on the Justice Department’s Tax Division is available at: http://www.usdoj.gov/tax/index.html.