FOR IMMEDIATE RELEASE TAX

TUESDAY, DECEMBER 12, 2006 (202) 514-2007

WWW.USDOJ.GOV TDD (202) 514-1888

Court Bars Michigan Man from

Promoting
Tax Fraud Schemes
Twin Lake Man Sold “Corporation Sole” and
“Strategic Withdrawal” Schemes
WASHINGTON – A federal court in Grand Rapids, Mich., has permanently barred
Daniel Doyle Benham of Twin Lake, Mich., from selling “corporation sole” and
“strategic withdrawal” tax schemes, the Justice Department announced today. Judge
Gordon J. Quist of the Western District of Michigan signed the civil injunction
order, to which Benham agreed without admitting wrongdoing.

According to the government’s complaint, Benham is alleged to have falsely

advised customers that they could withdraw from the federal tax system by
declaring bankruptcy, purportedly revoking their Social Security Numbers,
surrendering licenses and permits, and transferring their assets to a so-called
“corporation sole.” The complaint further alleged that Benham offered products and
services related to his schemes for amounts ranging from $200 to $5,000. His
customers underpaid their federal taxes by more than $2 million, according to an
Internal Revenue Service (IRS) estimate contained in the complaint.

Some states authorize religious leaders to hold property and conduct their activities
in what is known as a corporation sole, but tax benefits are available only for
organizations that qualify as religious or charitable organizations under the Internal
Revenue Code. The complaint alleged that Benham falsely told customers they
could treat their corporations sole as a “church” with no tax return filing
requirement, and yet control and use its assets and income for their personal
benefit.

The court’s order requires Benham to provide copies of the injunction to his
customers and to give the government a list of customers’ names, addresses, phone
numbers, and Social Security Numbers. Corporation sole tax scams are included in
IRS’s annual list of the “Dirty Dozen” tax scams
http://www.irs.gov/newsroom/article/0,,id=136337,00.html The Justice Department
has obtained permanent injunctions against a number of people who sell
corporation-sole scams. Examples are found at
http://www.usdoj.gov/tax/txdv06587.htm, http://www.usdoj.gov/tax/txdv05657 and
http://www.usdoj.gov/tax/txdv05030.htm.

Since 2001 the Justice Department’s Tax Division has obtained more than 210
injunctions to stop the promotion of tax fraud schemes and the preparation of
fraudulent returns. Information about these cases is available at
http://www.usdoj.gov/tax/taxpress2006.htm. Information about the Justice
Department’s Tax Division is available at http://www.usdoj.gov/tax/index.html.

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