DOJ Tax Division Rolls Out Plan Against Tax Cheats

The military has DEFCON to measure its readiness levels. The Justice Department's Tax Division has TAXDEF.

Assistant General Nathan Hochman today coined the term TAXDEF to describe the National Tax Defier Initiative — a plan to better coordinate the division's civil and criminal enforcement efforts against organized tax-evasion schemes.

"Although the Tax Division and the IRS have been effective at times in combatting tax defier activity, the problem demands constant vigilance," Hochman said at a news conference at Main Justice.

Jennifer Ihlo, a career prosecutor in the division, will serve as TAXDEF's national coordinator.

Hochman used the opportunity to announce civil injunction complaints against Pinnacle Quest International, a "multi-level marketing organization" and its affiliates in Florida, Oregon and Washington.

Pinnacle Quest International, Hochman said, earned about $54 million from 2002 to 2006 by peddling a fraudulent tax scheme through vendors at resort conferences around the world and even aboard a cruise ship. One of the cruise ship promoters turned out to be a former IRS revenue agent turned tax-scheme promoter, Hochman said.

Hochman said the online world has made it easier for such schemes to proliferate.

"The explosion of the Internet in the last decade has greatly facilitated tax defier activity and turned what was once a paper-based local or regional enterprise into a click-and-download national operation," he said. "The promoters of these bogus tax schemes are not wizards imparting the secrets of a 'tax-free universe'...[They] are nothing more than garden variety hucksters and modern-day snake oil salesmen."