Missouri CPA Barred from Promoting Tax Scheme Involving Charitable Remainder Annuity Trusts

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In a significant development, the U.S. District Court for the Western District of Missouri has permanently barred Aric Elliot Schreiner and his company, Columbia CPA Group LLC, from engaging in tax schemes related to charitable remainder annuity trusts (CRATs). This court order comes as a result of a lawsuit filed by the United States Department of Justice (DOJ) in February 2022 against Schreiner, Columbia CPA Group, and five other defendants involved in promoting the CRAT scheme.

According to the amended complaint, Schreiner and Columbia CPA Group allegedly misled customers by claiming that they could avoid reporting to the IRS and paying federal income tax on the sale of property through the use of CRATs. The scheme involved transferring the property to a CRAT, inflating the cost basis, selling the property, and receiving payments from an annuity without reporting them as income. The court’s permanent injunction prevents Schreiner and his company from organizing, promoting, selling, or marketing any tax schemes involving CRATs.

Furthermore, Schreiner has been ordered to disgorge $400,000 in ill-gotten gains from the scheme. The court also issued permanent injunctions against the other five defendants involved in promoting the CRAT scheme.

The DOJ’s Tax Division, led by Deputy Assistant Attorney General David A. Hubbert, has been actively cracking down on abusive tax arrangements like CRATs and has obtained injunctions against numerous tax return preparers and fraud promoters. The IRS has also expressed concerns about abusive arrangements involving CRATs, monetized installment sales, and syndicated conservation easements.

This court order serves as a reminder that charitable remainder trusts can offer legitimate benefits when used correctly and within the confines of the law. The IRS and the DOJ remain vigilant in ensuring that taxpayers properly report income and follow all applicable tax laws.

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