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SOME IOWANS MADE A BLUNDER

March 15, 2007

The IRS has sued to shut a Nevada tax shelter promoter. The lawsuit alleges that James A DiLullo peddled sham trusts to help his customers evade taxes.

While he operated out Nevada, the lawsuit says he had customers in "Washington, Massachussetts, Kansas, Texas, Colorado, Iowa, California, and West Virginia."

Based on the lawsuit, that means somebody in Iowa is going to need a good tax lawyer:

In meetings with prospective customers, DiLullo uses a high-pressure sales technique and a persuasive personality to pitch his scheme. He advises prospective customers that wealthy Americans have protected their assets and avoided taxes for decades using trusts or layers of trusts to obscure assets and income. He falsely assures prospective customers that using his trusts is completely legal, peppering his presentation with citations to IRS publications and purportedly supportive case law. He advises that by using a combination of domestic and foreign trusts, customers can lawfully avoid taxation of income.

But he's good for service after the sale:

When one customer questioned DiLullo in 2002 about the legality of his trust scheme, DiLullo told her that she could stop using the trust as long as she was “not stupid enough” to start paying her income taxes again.

Of course, this stuff never works, and it brings financial ruin to those who fall for it. If somebody tries to sell you "pure trusts" or offshore trusts to avoid taxes, run away.

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