BUSTED: Sept. 11 Used in Tax Fraud
Tax Professionals Whose Deceit Costs This Country Untold Millions in Tax Revenues 
A former top Internal Revenue Service lawyer and three other Ernst & Young partners reduced taxes for Americans making $10 million or more with a fraud that even used the Sept. 11 terrorist attacks to disguise their lies, according to an indictment charging the men. The four current and former partners of the giant accounting firm were arrested Wednesday and charged with fraud and other crimes relating to tax shelters that were devised beginning in early 1998. The men defrauded the IRS from 1998 to 2004 by designing, marketing and selling fraudulent tax shelters that made it appear as if customers were making investments when they actually were moving money around solely to dodge taxes.
The indictment portrayed Robert Coplan as central to the plan. Coplan, a Plano, Texas, lawyer, once was a branch chief in the IRS’ Legislation and Regulations Division. He worked for Ernst & Young in its Washington, D.C., office, though he has since left the firm. In one 2001 letter, Coplan tells a salesperson not to advise clients in writing about strategies for tax shelters because the ultimate goal is to “make our strategies appear to be investment techniques that have advantageous tax consequences,” the indictment said. In that letter, the indictment said, “clients falsely attributed their decision to discontinue their trading activities to the Sept. 11, 2001, terrorist attacks and to `possible economic repercussions resulting from such attacks.’”
To hide the tax fraud from the IRS, the partners created documents containing false and fraudulent descriptions of the clients’ motivations for entering into the transactions, the indictment said. Court papers said the men enticed clients to participate in the shelters by getting law firms to provide letters claiming that the tax shelter losses or deductions would “more likely than not” survive IRS challenge. Tsk tsk…
