The US District Court for the Northern District of Texas has entered permanent injunctions against Charles Dombek and The Optimal Financial Group, barring them from assisting in the future creation of captives.
The injunction stops them from promoting any tax plan that involves creating or using “sham” management companies and deducting personal non-deductible expenses as business expenses.
Dombek is also prohibited from preparingfederal tax returns for anyone other than himself and Optimal from preparing certain federal tax returns reflecting such tax plans.
Both Dombek and Optimal consented to entry of the injunctions.
As alleged by the government, Dombek promoted himself as the “premier dental CPA” in the United States.
The complaint alleges that Dombek and Optimal made false statements about the tax benefits of the scheme that they knew or had reason to know were false, then prepared and signed tax returns for their customers reflecting the sham transactions, expenses and deductions.
The government contended that the total harm to the Treasury from the scheme could have been $10m or more.
In April, the Internal revenue Service wrapped up its Dirty Dozen list for 2024 with captives taking the 831(b) tax election remaining a key focus area for the Service.
The IRS’ annual Dirty Dozen campaign lists 12 schemes that it believes put taxpayers, businesses and the tax professional community at risk of losing money, personal information and data.