A New Jersey accountant pleaded guilty to participating in a scheme to sell $1.3 billion in fraudulent tax deductions supposedly aimed at preserving green space.
(Bloomberg) — A New Jersey accountant pleaded guilty to participating in a scheme to sell $1.3 billion in fraudulent tax deductions supposedly aimed at preserving green space.
The accountant, Ralph Anderson, sold partnerships in deals known as syndicated conservation easements, which the Internal Revenue Service says are often fraudulent tax shelters. The IRS has audited at least 28,000 taxpayers who claimed $21 billion in deductions through those kinds of deals.
Anderson, who appeared by video in federal court in Trenton, New Jersey, became the fourth accountant to plead guilty and agree to cooperate against Jack Fisher, the chief promoter of the alleged scheme. Fisher and six others were indicted last year and face trial in Atlanta in July.
Fisher, an accountant-turned-developer, has pleaded not guilty and denies wrongdoing. An attorney for Fisher didn’t immediately respond to a request for comment.
The government says syndicated conservation easements are often pitched as a means of purchasing a large charitable tax deduction tied to fraudulent, highly inflated appraisals determined in advance.
Anderson, 64, pleaded guilty to conspiracy to defraud the US, saying he marketed the deals to wealthy clients by guaranteeing tax deductions worth at least four times their investments, which he knew was “too good to be true.”
He also admitted that some partnership agreements were backdated to falsely show they closed in the previous tax year, which is a key allegation in the case against Fisher and other defendants.
While conservation easements are permitted by Congress, the future of syndicated deals was subject to intense lobbying in Washington for years. In late December, President Joe Biden ended the fight by signing legislation that limited the charitable deductions to 2.5 times the amount people invested in a deal.
–With assistance from Aysha Bagchi.
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