Dentist Gets 18 Months for Impeding IRS Tax Avoidance Probe – Los Angeles Income Tax Planning & Income Tax Litigation Attorney Bruce Givner

by Bruce Givner on September 16, 2014

On September 9, Judge Raymond P. Moore of the US District Court for the District of Colorado sentenced Jerold R. Sorenson to 18 months in prison for obstructing an IRS investigation into a tax avoidance scheme involving $2.3 million in tax losses. According to US Attorney John Walsh of the District of Colorado, Sorenson obstructed the administration of internal revenue laws from September 2000 – May 2008.

This obstruction occurred in connection with an entity known as Financial Fortress Associates (FFA), a firm which promoted and advised its clients on how to avoid paying income and other federal taxes. According to court testimony, Sorenson established a number of pure trust organizations (PTOs) through FFA, which he used as vehicles to disguise his and his son’s receipt of business and personal income and asset ownership.

Sorenson, a 75 year-old dentist from Fresno, California, used these PTOs to act as though they owned assets that he, in fact, controlled, including his personal residence, automobiles, the building in which he conducted his dental practice, and the practice’s dental equipment. To reduce his taxable income, Sorenson funneled the income generated from his practice into the PTOs.

Also, Sorenson substantially under-reported his income to the IRS for calendar years 2002 – 2007 by filing individual federal income tax returns that failed to report as income any of the millions of dollars deposited into the bank accounts he controlled and used for personal expenses. These personal expenses included purchases of cars, payment of property taxes, upkeep for his California residence, and the payment of more than $2 million for the construction of two additional homes and a commercial building in Utah.

According to Sorenson’s attorney, Michael Minns, Sorenson was merely an unfortunate victim of FFA’s scams, adding “it is an injustice if the victim of a scam is ever incarcerated.” Minns said that although the count on which Sorenson was convicted carried a potential 3 year term, the court dismissed with prejudice a count that carried a potential 10 year term. Nevertheless, Minns indicated that he plans to file an appeal on Sorenson’s behalf in the US District Court of Appeals for the 10th Circuit.

Sorenson was indicted by a federal grand jury in Denver on November 20, 2013 and then found guilty by a jury on June 16, 2014. Sorenson will also have to pay a fine of $100,000 and serve one year of supervised release after the completion of his prison term.

Givner & Kaye focuses on sophisticated income tax planning and compliance, tax litigation and procedure, estate planning, and asset protection plans for individuals and businesses in Beverly Hills, Calabasas, West Los Angeles, Hollywood, and other areas of Los Angeles, Orange, Ventura, San Bernardino, Riverside and Santa Barbara Counties. Call Los Angeles Estate Planning and Asset Protection Plan Attorneys Givner & Kaye at (310) 207-8008 today.

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