Feds Shut Down Nationwide Tax Scheme Involving Fake Charities; “Ultimate Tax Plan” Operated by Michael L. Meyer (Miami)


A federal court in Miami, Florida, permanently barred Michael L. Meyer from organizing, selling, and making statements about the tax benefits of an allegedly abusive charitable giving tax scheme, the Justice Department announced today. The court’s injunction specifically prohibited Meyer from selling the Ultimate Tax Plan, sometimes referred to as a Charitable LLC or Charitable Limited Partnership. In addition, the court barred Meyer from preparing federal tax returns, performing appraisals for federal tax purposes, representing anyone other than himself before the IRS, furnishing tax advice about charitable contributions, and making statements about transactions having a significant purpose of tax avoidance.

According to the government’s amended complaint, Meyer organized, promoted, and operated an elaborate — and bogus — charitable giving tax scheme throughout the United States. Meyer allegedly told scheme participants they could claim significant tax benefits while retaining complete control over assets purportedly donated to charity.

According to the allegations in the government’s amended complaint, Meyer organized and sold a plan in which participants purportedly transferred property to a limited liability company (LLC) or partnership and purportedly donated their interest in the LLC or partnership to a charity. The United States further alleged that Meyer appraised the “donations,” prepared tax forms for participants to claim unwarranted deductions, and controlled the charities he used to perpetuate the scheme, including Indiana Endowment Fund Inc., Grace Heritage Corporation, and National Endowment Association Inc.

The government argued in its court filings that Meyer falsely advised participants that they could claim an immediate up-front tax deduction, grow assets tax-free, access assets through tax-free loans, and preserve wealth for themselves and their heirs. Because taxpayers retained control over their “donations,” however, all of the alleged tax benefits were unlawful, according to the United States’ court filings. In its amended complaint, the government alleged that Meyer’s scheme deprived the government of at least $35 million in tax revenue.

In addition to barring Meyer from activities described above, the Court also prohibited Meyer from advising, performing work for, receiving compensation from, or referring individuals to six other charities not referenced in the amended complaint: (1) Compassion Beyond Borders Inc.; (2) National Outreach Foundation Inc.; (3) Legacee Charities Inc.; (4) Triton Charitable Foundation; (5) Global Outreach Fund Inc., or (6) Family Office Foundation Inc.  The Court further ordered Meyer to dissolve National Endowment Association Inc.; Grace Heritage Corporation; Indiana Endowment Fund Inc.; as well as two other entities, Indiana Endowment Foundation Inc.; and Indiana Outreach Fund Inc. Meyer consented to entry of the injunction.

Principal Deputy Assistant Attorney General Richard E. Zuckerman, head of the Justice Department’s Tax Division, thanked Trial Attorneys Casey S. Smith, James F. Bresnahan II, and Harris J. Phillips of the Tax Division. He also thanked the many IRS attorneys and agents who participated in the investigation.