Stein Agee of Canton, Ga., And Corey Agee of Atlanta, Ga., Appeared before U.S. Judge W. Carleton Metcalf and pleaded guilty to their roles in a massive abusive tax scheme to defraud the IRS, announced today hui the Ministry of Justice.
According to court documents, from at least 2013 to 2019, S. Agee and C. Agee, then partners in an Atlanta accounting firm, marketed, promoted and sold with co-conspirators, investments in syndicated conservation easements. fraudulent (SCE) shelters. The SCE tax shelters were designed to produce tax deductions for high income taxpayers through partnerships that are supposed to make “real estate investmentsâ€. In truth, the partnerships were a sham, devoid of economic substance, and serving no legitimate business purpose. The placement of conservation easements on real estate was run in advance, which fraudulently allowed investors to shield their income from the IRS without economic risk and claim substantial tax deductions they did not have. right. S. Agee, C. Agee and their co-conspirators marketed SCE tax shelters by promising investors that for every $ 1 invested in the partnership, the investor would receive more than $ 4 in charitable tax deductions.
“The criminal behavior of the defendants and their co-conspirators has allowed their clients to claim over $ 1.2 billion in fraudulent tax deductions and generated hundreds of millions of dollars in tax losses for the United States,” said Senior Assistant Deputy Attorney General Richard E. Zuckerman of the Justice Department’s tax division. “Their convictions only signal the beginning of the department’s prosecution efforts. Taxpayers engaging in such schemes, as well as the lawyers, accountants, appraisers and other professionals who authorize them, must understand that they will be held fully accountable for their fraudulent conduct.
“Each year, millions of law-abiding Americans painstakingly file, accurate tax returns and pay their tax obligations on time, supporting important government services our communities rely on,” said U.S. Attorney R. Andrew Murray for the Western District of North Carolina. “As the defendants admitted in court today, their tax shelter system has helped high net worth clients avoid their tax responsibilities and avoid paying their fair share. Such actions not only increase the tax burden on honest taxpayers; they constitute a violation of our federal tax laws. Today’s guilty pleas send a strong message that tax professionals who promote and profit from illegal tax shelters will be investigated and prosecuted accordingly.
“Two defendants pleaded guilty today in the IRS-CI’s first-ever criminal case involving conservation easements,†IRS Commissioner Charles Rettig said. “This should be seen as the next step in the IRS’s battle against abusive SCEs. The defendants and their accomplices used the donation of conservation easements to enrich themselves personally and allow wealthy tax clients to avoid their tax obligations. The charges and guilty pleas demonstrate that participation in abusive SCEs will not be tolerated. Once again, the IRS recommends that anyone who has participated in an abusive SCE consult an independent lawyer to come into compliance.
Conservation easements were created by Congress to be a key tool used to protect environmentally and historically significant lands. The given conservation easement generally restricts the use or development of land to protect its conservation value. When legitimately created and used in accordance with the Internal Revenue Code, the conservation easement can both protect the environment and provide tax incentives. In contrast, abusive SCEs are designed to play with the system and generate inflated and unwarranted tax deductions, often using inflated valuations of undeveloped land and partnerships without a legitimate business purpose.
According to court documents, S. Agee and C. Agee further solicited investors after the end of the tax year and advised them to backdate payments and documents to show that the “investments” were. carried out on time before the end of the tax year. S. Agee and C. Agee have also prepared and assisted in the preparation of false tax returns for clients who have agreed to invest in SCE shelters. In return for their promotion of SCE’s abusive tax shelters, between 2013 and 2019, S. Agee and C. Agee each received over $ 1.7 million in commissions.
S. Agee and C. Agee both pleaded guilty to one count of conspiracy to defraud the United States, carrying a maximum penalty of five years in prison. They also face a period of supervised release, restitution and financial penalties.
U.S. Attorney Murray, Deputy Senior Assistant Attorney General Zuckerman, and IRS Commissioner Rettig thanked IRS-Criminal Investigation and U.S. Postal Inspection Service special agents, who are leading the investigation, as well as U.S. prosecutors Deputy Daniel Bradley and Caryn Finley, and Taxation Division trial attorneys Brittney Campbell and Grace Albinson, who are prosecuting the case.
