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COURT SHUTS DOWN 'PURE TRUST' PROMOTER WITH IOWA CUSTOMERS

November 15, 2007

A federal judge in Las Vegas permanently shut down a Las Vegas business that sold 'pure trust' schemes in at least eight states, including Iowa. For $1,000 to $2,000 a throw, the government said James DiLullo would set up trusts to conceal income - trusts he said the IRS could not legally investigate. From the federal complaint:

When customers contact DiLullo regarding IRS inquiries about their trusts, DiLullo instructs the customers to ignore the IRS correspondence or throw it away. DiLullo advised one customer by e-mail in October of 2002 that the "IRS was committing mail-fraud" by sending correspondence regarding an investigation of several of the customers' trusts. He further advised that "[y]ou cannot respond to these or it looks like YOU are the correspondent and they are off the hook. These are not nice people to work with—so don’t!!!" DiLullo further advised this customer that the IRS "will go away because YOU do not give them information about what they have no business asking."

"Ignore them and they'll go away" is never good advice in dealing with the IRS.

The Moral: You can't make your taxes go away using "pure" trusts, "constitutional common law trusts," or anything of the sort -- no matter what the salesman says.

Prior Coverage: SOME IOWANS MADE A BLUNDER

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