Indian-origin accountant barred from promoting tax scheme
April, 23rd 2014
An Indian-origin public accountant here has been permanently barred by a US court from promoting an alleged tax scheme that unlawfully increased tax deductions and avoided income taxes.
Ramesh Sarva, a certified public accountant in New York state, has been barred from promoting and selling the alleged nationwide tax scheme, the Justice Department announced on Tuesday.
Sarva has agreed to the injunction order.
The court also ordered Sarva to provide the United States with a list of his customers and to send copies of the injunction order to his customers. The complaint alleged that Sarva’s promotion of these unlawful welfare benefit plans deprived the US Treasury of significant amounts of tax and subjected his customers to audits and IRS scrutiny. According to the complaint, welfare benefit plans permit companies to pool together and make monetary contributions toward the purchase of life insurance for the benefit of the company’s employees.
Participants in legitimate welfare benefit plans may be able to deduct the full amount of their plan contributions as a business expense.
The complaint alleged that Sarva falsely informed his customers that the welfare benefit plans he promoted were legal, when on the contrary Sarva had been promoting plans that illegally permitted his customers to both claim substantial tax deductions for their plan contributions and later access the full cash value of their plan contributions by taking out loans against the life insurance policies purchased.