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United States v. Boisseau

United States District Court, D. Kansas

July 7, 2015

UNITED STATES OF AMERICA, Plaintiff,
v.
ELDON L. BOISSEAU, Defendant

Page 1243

For Eldon L. Boisseau, Defendant: Mitch E. Biebighauser, Robin D. Fowler, Thomas J. Bath, Jr., LEAD ATTORNEYS, Bath & Edmonds PA, Overland Park, KS.

For USA, Plaintiff: Alan G. Metzger, LEAD ATTORNEY, Office of United States Attorney - Wichita, Wichita, KS; Sean M. Green, LEAD ATTORNEY, U.S. Department of Justice - Tax Division PO 7238, Washington, DC.

Page 1244

MEMORANDUM AND ORDER

ERIC F. MELGREN, UNITED STATES DISTRICT JUDGE.

Defendant Eldon Boisseau was indicted on one count of tax evasion for unpaid taxes and interest of more than $1 million assessed between 1998 and 2008. Boisseau proceeded to a bench trial May 5-6, 2015. Having reviewed and considered the evidence, which was largely undisputed at trial, the Court finds Boisseau guilty of tax evasion in violation of 26 U.S.C. § 7201. The Court now issues its Findings of Fact and Conclusions of Law.

FINDINGS OF FACT

I. Background

1. Eldon Boisseau is an attorney in Wichita.

2. From 1998 through 2010, Boisseau earned his income by practicing law with three law firms: Turner & Boisseau, Chartered; Klenda, Mitchell, Austerman & Zuercher; and the Law Offices of Eldon L. Boisseau, LLC.

3. On October 15, 2014, the United States indicted Boisseau for willfully attempting to evade or defeat payment of his federal income tax liabilities for 1998 through 2000, 2002 through 2005, 2007 through 2008, and a trust fund recovery penalty related to two periods in 1999.

II. Substantial Tax Due and Owing

4. On December 17, 2000, Boisseau filed an amended income tax return, Form 1040X, for the tax year 1998. He reported owing $141,515 as of the date he filed the amended return. Despite reporting that he owed this amount, Boisseau did not pay the liability at the time of filing. As of April 6, 2015, as a result of accumulated interest, Boisseau owed $228,719.04.

5. On June 11, 2004, Boisseau filed an amended income tax return, Form 1040X, for the tax year 1999. He reported owing $78,662 as of the date he filed the amended return. Despite reporting that he owed this amount, Boisseau did not pay the liability at the time of filing. As of April 6, 2015, as a result of accumulated interest, Boisseau owed $254,947.11.

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6. On December 12, 2001, Boisseau filed an income tax return, Form 1040, for the tax year 2000. He reported owing $22,782 as of the date he filed the return. Despite reporting that he owed this amount, Boisseau only paid $500 at the time of filing. As of April 6, 2015, as a result of accumulated interest, Boisseau owed $55,284.85.

7. On or about January 28, 2004, Boisseau filed an amended income tax return, Form 1040X, for the tax year 2002. Boisseau reported owing tax of $54,629. Despite reporting that he owed this amount, Boisseau did not pay the liability at the time of filing. As of April 6, 2015, as a result of accumulated interest, Boisseau owed $111,302.01.

8. On October 17, 2004, Boisseau filed an income tax return, Form 1040, for the tax year 2003. Boisseau reported owing tax due of $62,124. Despite reporting that he owed this amount, Boisseau did not pay the liability at the time of filing. He did not have any tax withheld from his pay that year. As of April 6, 2015, as a result of accumulated interest, Boisseau owed $118,948.28.

9. On October 17, 2005, Boisseau filed an income tax return, Form 1040, for the tax year 2004. He reported owing $53,901 as of the date he filed the return. Despite reporting that he owed this amount, Boisseau did not pay the amount he reported owing. As of April 6, 2015, as a result of accumulated interest, Boisseau owed $101,505.69.

10. On October 18, 2006, Boisseau filed an income tax return, Form 1040, for the tax year 2005. Boisseau reported owing $73,879 as of the date he filed the return. Despite reporting that he owed this amount, Boisseau did not pay the liability at the time of filing. As of April 6, 2015, as a result of accumulated interest, Boisseau owed $134,434.53.

11. On October 9, 2008, Boisseau filed an amended income tax return, Form 1040X, for the tax year 2007. Boisseau reported owing $10,909. Despite reporting that he owed this amount, Boisseau did not pay the liability at the time of filing. As of April 6, 2015, as a result of accumulated interest, Boisseau owed $20,391.37.

12. On October 9, 2009, Boisseau filed an income tax return, Form 1040, for the tax year 2008. Boisseau reported owing $22,626 as of the date he filed the return. Despite reporting that he owed this amount, Boisseau did not pay the liability at the time of filing. As of April 6, 2015, as a result of accumulated interest, Boisseau owed $32,606.06.

13. On July 9, 2001, the IRS assessed Boisseau with a trust fund recovery penalty in the amount of $250,929.02. The assessment was made based on the IRS' determination that Boisseau was a responsible officer at the law firm of Turner & Boisseau who willfully failed to pay over the employment taxes withheld from the firm's employees' pay in the second quarter of 1999. Boisseau was a 60 percent owner of the firm at the time.

14. The IRS also assessed a trust fund recovery penalty against Brian Mauden. In 1999, Mauden was the comptroller for Turner & Boisseau.

15. As comptroller, Mauden informed Boisseau that the firm was unable to pay its payroll taxes. Mauden informed Boisseau that the firm had fallen behind on paying the IRS the trust fund portion of the firm's employment taxes. Mauden advised Boisseau that he should reduce his pay to increase cash flow and allow the firm to pay the liability. Boisseau rejected the idea.

16. Boisseau has made $1,000 in payments toward the trust fund recovery penalty.

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17. Other than the $1,000 paid by Boisseau, Mauden made all the other payments toward the liability from the date of assessment to February 21, 2014. Mauden made these payments from his military retirement and social security.

18. By virtue of Mauden's payments, the trust fund recovery penalty assessment was paid off as of February 21, 2014, but the accrued interest remains.

III. Affirmative Acts of Evasion and Willfulness

A. Boisseau uses a nominee owner for his law firm.

19. Jack McInteer, an attorney from Wichita, testified that in 2005, Boisseau asked him to create a law firm " that Eldon Boisseau would be the manager and primary lawyer in." McInteer assisted Boisseau in creating the Law Offices of Eldon L. Boisseau, LLC. McInteer testified that Boisseau made the ultimate decision to create the Law Offices of Eldon L. Boisseau.

20. In creating the Law Offices of Eldon L. Boisseau, McInteer discussed Boisseau's tax liabilities with him. Boisseau expressed his concern to McInteer about his tax liabilities.

21. On September 19, 2005, McInteer emailed Boisseau that he could " set up the LLC and structure it anyway you want."

22. Boisseau wanted to design the firm in a manner that would protect the firm's assets from IRS collection. McInteer testified that " if [the law firm] was Eldon Boisseau's business, then the IRS could attach all of the assets," including the firm's accounts receivable. But if " the law firm itself and its assets were not his, then they wouldn't be attachable."

23. In an email from McInteer to Boisseau and his accountant, Tom Dechant, on November 9, 2005, McInteer stated that " Eldon could own the LLC, but that is just asking for IRS problems. They could get any equity. They also could force a foreclosure by the bank. The smart thing if it is an option is to have someone else own it."

24. Tom Dechant is a certified public accountant from LaCrosse, Kansas. His accounting firm prepared Boisseau's income tax returns for the years at issue. Dechant also was involved in the email discussions between McInteer and Boisseau regarding the creation of the Law Offices of Eldon L. Boisseau.

25. On December 16, 2005, Dechant emailed Kimberly Clement, an employee of the Law Offices of Eldon L. Boisseau, stating, " If we were to put Eldon's name as owner that would mess us up with the IRS."

26. At Boisseau's request, Richard Johnson became, and remains, the sole owner of the Law Offices of Eldon L. Boisseau.

27. Johnson is a lawyer who practices law in Valley Falls, Kansas.

28. Johnson's daughter is married to Boisseau's son.

29. Although Johnson is the sole owner of the Law Offices of Eldon L. Boisseau, he has no day-to-day involvement with the firm. He does not represent any clients or perform any managerial work for the firm. He has never been to its offices.

30. Johnson testified regarding the firm's operations that he " never really thought it was any of my business."

31. Johnson did not receive a salary from the law firm. He occasionally received nominal compensation--between $1,000 and $3,000 a year--but he " didn't request anything, didn't expect anything."

32. Boisseau managed the day-to-day operation of the firm and made all business decisions regarding the firm. Nevertheless,

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he never had signature authority on any of the firm's checking accounts. Before being assessed the taxes at issue in this case, Boisseau was a partner at the law firm Turner & Boisseau, Chartered. While there, he had signature authority on that firm's accounts.

33. Boisseau told Clement, the office manager of the Law Offices of Eldon L. Boisseau, that he did not own the law firm because he did not want his personal IRS problems to affect the firm or its accounts.

34. At the time he created the firm, Boisseau already had been assessed, but failed to pay, tax for 1998-2000 and 2002, and the trust fund recovery penalty. The United States had a federal tax lien on all property belonging to Boisseau.[1] Moreover, the IRS had filed notices of its federal tax liens.

B. Boisseau alters his pay arrangement.

35. McInteer considered it important that Boisseau had an express employment agreement with the Law Offices of Eldon L. Boisseau. In an email dated October 21, 2005, McInteer told Boisseau and his accountant that " it is real important to tie down Eldon's salary and or bonus arrangements. Since he doesn't own the business, that is what he gets. Also, it is what the IRS can attach. With Eldon being so important in the business, if we don't have it written down, the IRS will take the position that he owns and is entitled to everything if we aren't clear."

36. On January 12, 2006, McInteer wrote to Boisseau that he had drafted an employment agreement covering his salary and bonus, adding that " it is important to have an employment agreement in place to obviate any ...


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