TAX NEWS - June 2010

Florida Tax: Pinellas man gets 5 years in prison in tax scheme

TAMPA - A Pinellas County man was sentenced today to five years in federal prison for promoting an illegal tax avoidance scheme.

Jack Lee Malone, 60, was convicted in March of conspiring to impede the Internal Revenue Service.

Starting in 1999, authorities say, Malone and co-conspirator Joseph Sweet sold and promoted the plan in which they said customers could avoid paying federal income taxes, in part, by putting their assets in sham trusts.

They sold the trusts through two of their own trusts, The JoY Foundation and EDM Enterprises.

Malone and Sweet told clients that income generally is not taxable and that filing a federal income tax return is voluntary, authorities say. They also directed clients to submit obstructive paperwork or otherwise conceal their assets and income.

Sweet is scheduled to be sentenced in August.

Records of The JoY Foundation, which was headquartered in Tampa until 2002, showed that Malone and Sweet recruited more than 1,300 clients nationwide, authorities said.

U.S. District Judge Susan Bucklew determined Malone was responsible for a tax loss of more than $2.8 million.

Bucklew also sentenced a JoY Foundation client, Terry Moore, 64, of Riverview, to five years of probation, including eight months of home detention.