ASHEVILLE, N.C. (CN) – Federal prosecutors say Andrew DeDominicis and Impact Ministries International raked in more than $290,000 helping customers evade taxes. DeDominicis claims that “you call yourself a church if you believe in God,” and boasts on his website that his “corporation sole” scheme “provides for the Christian the means of creating, receiving and generating wealth all in a tax-free environment, enabling the presiding Christian officer or his successors to freely spend this wealth as he sees is beneficial to his office,” according to the complaint.
DeDominicis, who was formerly known as Andrew Brown, raked in money for 8 years from more than 160 people, according to the complaint. Prosecutors say that if he is not stopped, the IRS may run out of resources to catch him and his clients.
DeDominicis’ “corporation sole” scheme “advises or assists individuals to attempt to violate the internal revenue laws or unlawfully evade the assessment or collection of their federal tax liabilities,” the complaint states.
DeDominicis claimed that anyone could buy corporation sole packages, which “can be used by virtually anyone as a means of safeguarding assets; thus, tax evasion is exactly what DeDominicis advocates,” according to the complaint.
DeDominicis posted a disclaimer on his websites, stating that the corporation sole should not be used just to evade taxes, but he adds that the corporation sole “provides for the Christian the means of creating, receiving and generating wealth all in a tax free environment enabling the presiding Christian officer or his successors to freely spend this wealth as he sees is beneficial to his office.”
According to the complaint, corporations sole are “authorized under the laws of some states to enable religious leaders to hold property and conduct business for the benefit of the religious entity (as opposed to the benefit of the office holder, or entity creator, himself).”
DeDominicis sells the corporation sole package for about $2,500, although he claims to provide his services on a “donation” basis, the complaint states. One customer said that though the fee he was charged was classified as a “suggested donation,” in order to have DeDominicis form the corporation sole he had to pay Impact Ministries the money.
According to the complaint: “Despite DeDominicis’s disclaimers, in essence he is promoting the shopworn corporation sole scheme. Following his plan, you call yourself a church if you believe in God, you form a corporation sole (through him of course for a ‘donation’ he doesn’t pay taxes on), you tell yourself to continue working in your field of experience, and you convey your personal and/or business assets to the corporation sole. You then take a vow of poverty and pay your personal expenses with funds of the corporation sole. Through it all, you become tax-exempt.
In furthering this scheme, DeDominicis uses his influence as a so-called minister to exploit customers and convince others that the corporation sole is a legitimate way for a business or an individual to incorporate, and in doing so, avoid paying income taxes.” (Parentheses in complaint.)
DeDominicis fives his customers a copy of his “Operational Ministry Guide & Commonly Asked Questions” after he sells them his package, and tells them to keep the guide private, “suggesting he knows his advice and scheme are bogus,” prosecutors say.
He claims that Impact Ministries “does not condone or recommend that you use your corporation sole to be engaged in any type of business that operates outside of the scope of your ministerial, educational, and charitable purposes,” but gives examples on his websites of how a person could operate a business through a corporation sole.
Since DeDominicis falsely advises customers that forming a corporation sole is a good way to incorporate a business, customers believe they no longer have to file tax returns and “may now face substantial penalties from the IRS as a result of DeDominicis’s false statements regarding the benefits of the corporation sole,” prosecutors say.
They seek an injunction to stop DeDominicis from making further “false or fraudulent statements about the allowability of any deduction or credit, the excludability of any income, or the securing of any tax benefit by the reason of participating in any plans or arrangements.”
They add: “Unless DeDominicis is enjoined, the IRS will have to devote substantial time and resources to identifying and locating his scheme participants, and then will have to construct and examine those persons’ tax returns and liabilities. The IRS has begun conducting examinations of dozens of participants of this scheme. The continuous burden of pursuing individual participants may be an insurmountable obstacle if DeDominicis is not enjoined, given the IRS’s limited resources.
“If DeDominicis is not enjoined, he likely will continue to engage in conduct that obstructs and interferes with the enforcement of the internal revenue laws.”