Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-1_06-cv-01368/USCOURTS-caed-1_06-cv-01368-5/pdf.json

Parties Involved:
Lowell Baisden
Defendant
United States of America
Plaintiff

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UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

UNITED STATES OF AMERICA,

Plaintiff,

v.

LOWELL BAISDEN,

Defendant.

 

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1:06-cv-1368 OWW TAG

ORDER CLARIFYING AND

MODIFYING FINDINGS OF FACT

AND CONCLUSIONS OF LAW

ISSUED APRIL 10, 2007, AND

CORRECTING PRESS RELEASE

The motion of Defendant Lowell Baisden to clarify and modify

the Findings of Fact and Conclusions of Law and to correct a

press release issued in this case by the Department of Justice

regularly came on for hearing June 18, 2007, at 10:00 a.m. 

Plaintiff United States was represented by Jacqueline Brown,

Esq., Trial Attorney, U.S. Department of Justice. Defendant

Lowell Baisden was represented by McCormick, Barstow, Sheppard,

Wayte & Carruth by Marshall C. Whitney, Esq., and Jerry D.

Casheros, Esq. 

The Court heard the arguments of the parties, fully

considered the papers submitted in support of and in opposition

to the motion, and considered post-hearing written submissions

concerning proposed modifications and corrections to press

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release. Based on all of the above, the following order is

entered:

1. The United States Department of Justice shall issue a

press release correcting a portion of its April 12, 2007, press

release. Said correction shall be in the form of the draft press

release attached marked Exhibit A and incorporated by this

reference.

2. The United States Department of Justice will cause a

copy of the corrected press release to be disseminated to the

North Platt Bulletin, The North Platt Telegraph, the Bakersfield

Californian and to any other newspaper, publication, periodical,

news service, and any website to which the press release was

disseminated, including the Department of Justice and Internal

Revenue Service websites. 

3. Conclusions of Law Numbers 6 and 7 submitted after the

hearing and filed as Findings of Fact and Conclusions of Law in

support of the Court’s preliminary injunction, shall be modified

as follows:

6. The Court has not determined a violation of I.R.C.

§§ 6700, 6701 or 6694, however, evidence shows that

Baisden has engaged in conduct some of which is likely

to violate I.R.C. § 6700, by developing, organizing and

promoting a plan or arrangement that encourages and

assists professional customers to create corporations

to which they assign their professional incomes, the

primary or only purpose for which is to decrease their

tax liability. In so doing, it is likely Baisden has

made the following statements:

a. Inaccurately advised customers that by using

corporations they can deduct personal expenses that are

not ordinarily deductible to individuals;

b. Inaccurately advised customers who he knows

are statutory employees of corporations that they can

assign all of their incomes to other corporations;

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c. Inaccurately advised customers that they

could assign their professional employment income to

corporations having reason to know that some of such

corporations do not have any legitimate business

activity other than the activities of his clients,

medical professionals themselves;

d. Inaccurately advised clients or potential

clients that they can save specific amounts of taxes by

creating or using corporations to which they can assign

their income.

7. Baisden has likely prepared federal tax returns

for customers for submission to the IRS containing

items he knew would result in understatements of

customers’ tax liability. Baisden has likely prepared

federal tax returns for customers containing

understatements of liability based on positions for

which there was no reasonable basis for avoiding tax

liability. Baisden has also likely prepared federal

tax returns containing understatements of tax due to a

willful attempt to understate such liabilities, and in

reckless or intentional disregard of the Internal

Revenue laws and regulations, by:

a. Preparing some federal tax returns claiming

deductions for business expenses that are in fact nondeductible personal expenses, and/or for which he and

his customers have not produced supporting

documentation;

b. Preparing some federal tax returns and forms

containing misstatements of fact as to customers’

occupations, the business activities of corporations,

dates of incorporation, and customers’ sources of

income;

c. Preparing some tax returns of corporations

engaged only in the activities related to the field of

medical services and failing to properly identify such

corporations as personal services corporations;

d. Preparing some federal tax returns for clients

on which he assigns the entire incomes of statutory

employees to their corporations and on which he does

not report a reasonable compensation to the

owners/employees of corporations;

e. Preparing some federal tax returns for

clients on which he mischaracterizes wage or dividend

income as rent or royalties to individual owners;

f. Preparing some federal tax returns for

clients on which he reports ordinary business

deductions for items that are capital expenses that

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cannot be deducted in one year, or for the costs of

items intended to be sold, and properly categorized as

inventory;

g. Preparing some federal tax returns for

clients containing deductions for purported business

expenses when the clients have not provided supporting

evidence to show they are engaged in legitimate

business activities with the intent to make a profit.

The United States separately requested a modification of the

Findings of Fact and Conclusions of Law to be consistent with

findings stated in open court. No opposition was filed and

paragraph 28 of the Findings of Fact and Conclusions of Law is

modified as follows:

Baisden’s customers Katherine Snoozy and Evan

Geilenkirchen, worked as nurse anesthetists for ACN

from 2001 to 2004. Baisden’s customers Deborah and

Michael Weaber, Michael Trierweiler, Chris Johng, and

Burt McKeag, are physicians who also work at the Great

Plains Regional Medical Center in North Platt,

Nebraska. Williams Testimony, Ex. 1, at ¶ 12, 2 at ¶

17, Ex. 5 at ¶¶ 3, 43. 

SO ORDERED.

DATED: June 20, 2007.

__/s/ Oliver W. Wanger_____

Oliver W. Wanger

UNITED STATES DISTRICT JUDGE

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EXHIBIT A: CORRECTION TO PRESS RELEASE

DEPARTMENT OF JUSTICE, WASHINGTON, D.C.

The United States District Court for the Eastern District of

California has issued an order to the Department of Justice to

correct portions of its press release dated April 12, 2007. That

release stated that the District Court has issued an injunction

against Lowell Baisden, a Bakersfield, California, certified

public accountant, “that prevented him from promoting his tax

scheme.” The Court did not find that Mr. Baisden had engaged in

or promoted a tax scheme, nor did it find Mr. Baisden was engaged

in a fraudulent tax promotion. The matter is set for trial on

June 17, 2008. 

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