Department of Justice Sues to Stop Fraudulent Charitable Trust (CRATs) Abuses
The White Law Group is investigating potential claims involving fraudulent Charitable Remainder Annuity Trusts (CRATs). If you or someone you know was advised that a CRAT structure can help avoid paying taxes on the sale of property, the securities attorneys at White Law Group may be able to help you.
On February 23, 2022, the Justice Department reportedly accused a group of people and entities of promoting an abusive tax scheme involving charitable remainder annuity trusts (CRATs) and asked a court to prevent them from continuing to do so, according to a press release. The defendants are reportedly John Hugo Eickhoff, Rohnda Kaye Eickhoff, Hoffman Associates, LLC, Aric Schreiner, Columbia CPA Group, John Gray, and Damon Eisma.
The Justice Department said the alleged scheme involved at least 70 CRATs, $40 million of underreported income, and at least $8 million in lost tax revenue.
According to the complaint filed in the U.S. District Court for the Western District of Missouri, the defendants falsely claim that customers following their CRAT scheme can sell property in a way that eliminates the federal tax on the income generated.
The DOJ alleges that each defendant participates in at least one or more of the following steps involved in the scheme:
(1) convincing customers to contribute property to a CRAT (usually real property that has gained value over time);
(2) unlawfully inflating (stepping-up) the cost basis in the property;
(3) selling the property to purchase an annuity; and
(4) falsely reporting the annuity payments received by the customers as tax-free distributions of income made by the CRAT.
Further, the defendants allegedly know or have reason to know that their statements to customers about the supposed tax benefits of the transaction they promote are false or fraudulent, according to the complaint.
Free Consultation with a Securities Attorney
The IRS has likely already notified taxpayer clients of the Defendants that the CRATs will be challenged. If you or someone you know was advised that a Charitable Remainder Annuity Trusts (CRATs) structure can help avoid paying taxes on the sale of property, please contact the attorneys at The White Law Group to determine whether you may have a claim at 888-637-5510.
The White Law Group is a national securities fraud, securities arbitration, and investor protection law firm with offices in Chicago, Illinois and Seattle, Washington. We represent investors in all 50 states. Our attorneys have recovered millions of dollars from many brokerage firms in the past.
For more information on The White Law Group, and its representation of investors, please visit www.WhiteSecuritiesLaw.com.
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