Date: 05-23-2015

Case Style: United States of America v. Gerrit Timmerman, III

Case Number: 2:13-cr-00045-TC

Judge: TC

Court: United States District Court for the District of Utah (Salt Lake County)

Plaintiff's Attorney: Caryn D. Finley, Andrea A. Kafka, Michael P. Kennedy, Dennis Robert Kihm, Cecilia Lutz, Michael J. Romano, Jacob J. Strain

Defendant's Attorney: Clay Simms for Gerrit Timmerman, III

Shehnoor Kaur Grewal, and Randy Ludlow for Carol Jean Sing

Description: SALT LAKE CITY, UT – A Midvale, Utah, man and a Henderson, Nevada, woman were sentenced in U.S. District Court in Salt Lake City for tax crimes, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney Carlie Christensen of the District of Utah.

Gerrit Timmerman III, 73, of Midvale, was sentenced to 48 months in prison to be followed by three years of supervised release. Carol Jean Sing, 75, of Henderson, was sentenced to 36 months in prison to be followed by three years of supervised release. In February 2015, Timmerman and Sing were convicted at trial by a federal jury of conspiracy to defraud the United States related to their promotion of a tax fraud scheme.

“Combatting abusive tax schemes remains one of the Tax Division’s highest priorities, and these sentences are the result of our continued efforts to pursue and prosecute fraudulent promoters to the fullest extent of the law,” said Acting Assistant Attorney General Ciraolo. “We will continue to work with our law enforcement partners at the IRS and in the U.S. Attorney’s Offices to identify and dismantle these criminal enterprises and in doing so, protect the American public and the U.S. Treasury.”

“Individuals who enrich themselves by promoting tax avoidance schemes and assisting others in evading state and federal taxes are defrauding American taxpayers,” said U.S. Attorney Christensen. “They should expect to be prosecuted, convicted and sentenced to federal prison for this conduct, as these sentences demonstrate.”

According to the evidence introduced at trial, between April 23, 2004, and March 5, 2007, Timmerman and Sing conspired to defraud the United States by marketing “corporations sole” as part of their scheme to evade the assessment and payment of federal income taxes. Timmerman and Sing falsely told their clients that corporations sole were exempt from United States income tax laws, had no obligation to file tax returns and had no obligation to apply for tax exempt status. They further claimed that individuals could render their own income non-taxable by assigning it to the corporation sole, could draw a tax-free stipend from their corporation sole, and could render property immune from IRS collection activity by transferring property to the corporation sole.

According to evidence presented at trial, Sing used Trioid International Group Inc. as a resident agent for corporations sole and other business entities for their clients. Sing and Timmerman also utilized a website to list the tax benefits of corporations sole and to post articles about the supposed tax benefits of corporations sole. At the same time, Timmerman was actively assisting others in evading their state and federal income tax liabilities and recommended the corporation sole to his clients as another way to impair the IRS. Both defendants referred customers to one another and paid each other referral fees.

“Yesterday’s sentencing of Gerrit Timmerman and Carol Sing should send a clear message: schemes to evade the payment of taxes are a violation of the federal tax laws and the consequences of such schemes can and will result in jail time,” said Special Agent in Charge John G. Collins of IRS-Criminal Investigation in Utah. “The Internal Revenue Service, in partnership with the U.S. Attorney’s Office and the Tax Division, will continue the aggressive pursuit of those who use fraudulent methods in an attempt to corrupt our nation's tax system. Honest taxpayers have been reassured today that no one is above the law -- especially when the integrity of tax administration is at stake.”

A corporation sole is a form of incorporation allowed by some states, primarily for use by religious leaders to hold title to property. Several states, including Utah and Nevada, have disallowed the creation of new corporations sole. The IRS has publicized the fact that corporations sole have been abused by promoters in Revenue Ruling 2004-27, and has even included corporations sole on their “dirty dozen” tax scams in prior years.

Assistant Attorney General Ciraolo and U.S. Attorney Christensen commended the special agents of IRS–Criminal Investigation, who investigated this case, as well as Trial Attorneys Dennis R. Kihm and Andrea A. Kafka of the Tax Division, who prosecuted the case.

Outcome: Tax Fraud Promoters Sentenced To Prison For Conspiring To Defraud Internal Revenue Service

Plaintiff's Experts:

Defendant's Experts:

Comments: