In a decisive move against tax fraud, the U.S. District Court for the Southern District of Mississippi has issued permanent injunctions against Thomas Walt Dallas and Jason Todd Mardis, along with their business, Capital Preservation Services LLC. This action effectively bars them from making any statements about tax benefits in exchange for compensation, marking a significant victory for the U.S. DOJ’s Tax Division and the Internal Revenue Service (IRS).
The Fraudulent Scheme by Thomas Walt Dallas and Jason Todd Mardis
The complaint alleges that Thomas Walt Dallas and Jason Todd Mardis promoted a tax scheme aimed at medical professionals and small business owners. They promoted these schemes at numerous professional conferences and media appearances, falsely claiming that their “tax plans” could allow clients to claim multiple deductions to which they were not actually entitled. The deceptive strategies included:
Sham Marketing Companies: Customers were advised that their businesses could claim deductions for paying substantial, unwarranted “marketing fees” to newly established sham marketing companies. These fees had no legitimate business purpose and were designed to fabricate deductions.
Family Employment and Deductions: The scheme suggested that these sham marketing companies could employ family members, including minor children, and take deductions for family meals, vehicle expenses, and tuition, among other items. This misrepresents personal expenses as business expenses, a clear violation of tax laws.
Rental Income Avoidance: Another fraudulent claim was that customers could “rent” their homes to their businesses at exorbitant rates and avoid paying taxes on the rental income. This tactic falsely converted personal living spaces into business assets, generating illegitimate tax deductions.
The complaint further alleges that Thomas Walt Dallas and Jason Todd Mardis knew or should have known that these statements about tax benefits were false. The estimated harm from this fraudulent scheme amounts to approximately $130 million in lost tax revenue since 2014.
Legal and Financial Consequences for Thomas Walt Dallas and Jason Todd Mardis
Deputy Assistant General David A. Hubbert of the Justice Department’s Tax Division announced the injunctions. The decision is part of a broader effort by the IRS and the Tax Division to clamp down on fraudulent tax schemes that harm both taxpayers and government revenue. The IRS annually spotlights tax scams that jeopardize taxpayers’ money, personal information, and data. In its latest list, the IRS explicitly cautioned taxpayers to “beware of promoters pushing bogus tax schemes intended to reduce taxes or evade them entirely.”
IRS and DOJ’s Ongoing Efforts Against Fraud by Thomas Walt Dallas and Jason Todd Mardis
Over the past decade, the Tax Division, in collaboration with the IRS, has obtained injunctions against hundreds of unscrupulous tax preparers and tax scheme promoters. These actions are part of a sustained effort to protect the integrity of the tax system and ensure that taxpayers are not misled by fraudulent schemes. Details about these cases can be found on the Justice Department’s website, which also features an alphabetical list of individuals prohibited from preparing tax returns and promoting tax schemes.
Taxpayers who believe that one of the enjoined persons or businesses may be violating an injunction are encouraged to contact the Tax Division with details. This helps the authorities monitor compliance and take further action if necessary.
The Broader Implications of Actions Against Thomas Walt Dallas and Jason Todd Mardis
This case highlights the necessity of being vigilant when handling tax-related issues. Taxpayers should always seek advice from reputable and qualified professionals, especially when it comes to complex deductions and tax planning strategies. The IRS provides resources and warnings to help taxpayers identify and avoid scams.
The permanent injunctions against Thomas Walt Dallas and Jason Todd Mardis highlight the severe consequences of engaging in tax fraud. Not only do such schemes cause substantial financial harm to the government, but they also put clients at risk of audits, penalties, and legal action. The legal system’s robust response to these fraudulent activities highlights its commitment to upholding the law and protecting both the tax system and taxpayers.
