Taxable Talk

When I last wrote about Todd Strand he had pleaded guilty to tax fraud and related charges. Mr. Strand had worked for Renaissance, the Tax People as National Marketing Director. Renaissance promoted a system that allowed you to deduct personal expenses as business expenses. Unfortunately, that’s illegal.

Mr. Strand was sentenced last week. He received 51 months at ClubFed and must make restitution of $10.6 million to the IRS.

Meanwhile, Renaissance founder Michael Cooper is awaiting sentencing (scheduled for November 18th). Mr. Cooper was convicted on 73 counts. It looks like Mr. Cooper will receive many, many years at ClubFed when he’s sentenced.

I’ve reported on the shenanigans committed by Renaissance, the Tax People, before. Today, former IRS District Director Jesse Cota pleaded guilty to defrauding the U.S. out of $1.3 million while he was with Renaissance. He also admitted to earning more than $300,000 from this scheme.

Renaissance was a multi-level marketing firm promoting tax savings products. There’s nothing illegal about multi-level marketing firms, nor tax savings products. The problems come when you promote, “…[A] program designed to sell illegal tax deductions through false and misleading representations.” Cota assured potential clients that the scheme was legal (and as a former IRS District Director, he knew (or should have known) it wasn’t).

Cota is the seventh individual to plead guilty to Renaissance-related charges.

Hat Tip: Roth Tax Updates

“Renaissance, the Tax People”, was, as I previously reported, a multi-level marketing firm specializing in tax. That was the legal part of the business. The illegal part, according to the Department of Justice (and the six individuals who have pleaded guilty to various charges to date) was how it lowered taxes for its clients.

If you used the Renaissance system, you could deduct personal expenses as business expenses! And you could have gotten this system for just $300 to $1200, plus another $100 per month! What a deal!

Just one major problem with that…you can never deduct personal expenses as business expenses. That’s fraud, and that’s what the Renaissance founders promoted.

The latest to plead guilty is Renaissance’s former National Marketing Director, Todd Eugene Strand of nearby Murrieta, California. Mr. Strand admitted that he falsely assured customers that the program was legal. He also agreed that Renaissance defrauded customers of $75 million, and caused a tax loss to the United States of $20 million.

Mr. Strand is looking at a few years at ClubFed, and a possible fine of $500,000. He’ll be sentenced in January 2008.