Federal Court Bars Missouri Lawyer from Promoting Individual Retirement Account Tax Arrangements

From the US Department of Justice:


Philip A. Kaiser of St. Louis Also Must Provide Client List to Justice Department

WASHINGTON - A federal judge in St. Louis has permanently barred a Missouri attorney and his law firm from promoting any Individual Retirement Account-based arrangement, the Justice Department announced Friday, September 17th.   The order, entered by Judge Rodney W. Sippel of the U.S. District Court for the Eastern District of Missouri, bars Philip A. Kaiser and the Kaiser Law Firm from engaging in conduct that allegedly helped clients improperly evade contribution limits for Roth IRA accounts and accumulate millions of dollars in tax-free gains in their Roth IRA accounts, according to the government complaint in the case.

The court order, to which Kaiser consented, permanently bars Kaiser and his law firm from promoting or advising with respect to a number of schemes described in the government complaint:

  • The Private IRA Corporation or "PIRAC"tax arrangement;
  • The Char-FLP tax arrangement;
  • The Real Estate Purchase Option tax arrangement;
  • The Derivium tax arrangement; and
  • The establishment of any other IRA-based arrangement.  

The complaint alleged that numerous self-directed Roth IRA accounts were established under Kaiser's direction to implement the above tax arrangements.   This allegedly allowed Kaiser's customers to improperly evade contribution limits for Roth IRA accounts and accumulate in their IRAs tens of millions of dollars in tax-free gains.

The court also ordered Kaiser to provide a copy of the injunction to his employees and customers, and give the government information about his customers who have implemented the tax arrangements described in the complaint.

The Internal Revenue Service's (IRS) list of the "Dirty Dozen" tax scams for 2010 includes abusive Roth IRA schemes.

John A. DiCicco, Acting Assistant Attorney General for the Justice Department's Tax Division, thanked Justice Department trial attorneys Gregory S. Seador and Jessica S. Reimelt for handling the case, and also thanked Jim Graczyk of the IRS' Small Business/Self-Employed Division, which investigated the case.

Since 2001, the Justice Department's Tax Division has obtained hundreds of injunctions to stop the promotion of tax fraud schemes and the preparation of fraudulent returns. Information about these cases is available on the Justice Department website.