Creative accounting leads to federal court ruling against Columbia CPA firm, its manager

A Columbia accountant who aided others to avoid paying income tax through a specific kind of trust is now barred from promoting the scheme.

The ruling came May 3 in the U.S. District Court for Western Missouri and was announced Monday by the U.S. Justice Department Deputy Assistant Attorney General David A. Hubbert with the department's tax division against Aric Elliot Schreiner and Columbia CPA Group LLC.

Schreiner's bio on the Columbia CPA Group website notes he has devoted "his attention to saving people from IRS tax debt, so that he could use his decades of standing up to the IRS for the benefit of his clients," and that he has previously written "Tame your Taxes" columns for the Tribune. The last time a column was published was October 2022.

The Justice Department in its complaint noted Schreiner promoted the use of charitable remainder annuity trusts, know as CRATs, as a means of avoiding income tax reporting on property sales. The department accused the accounting firm of transferring property sales into the trusts and of "unlawfully inflating (stepping-up) the cost basis in the property on tax documents; selling the property and using the sale proceeds to purchase an annuity; and receiving payments from the annuity, but failing to report the annuity payments as income on tax forms," a news release noted.

Schreiner must pay back $400,000 in "ill-gotten gains" from the scheme. Along with barring Columbia CPA Group from promoting charitable remainder annuity trusts, it also is barred from other tax schemes that use conservation easements and monetized installment sales.

CRATs are irrevocable trusts that lets a person donate assets to charity and draw annual income for life or a specific period, the Justice Department noted. While charitable remainder trusts have many benefits, they cannot be used to evade taxes or illegally benefit its beneficiaries, the department added.

"The Justice Department is committed to supporting the IRS as appropriate in its efforts examine charitable remainder trusts to ensure they correctly report trust income and distributions to beneficiaries, file all required tax documents and follow all applicable tax laws and rules," the Justice Department said in the release.

For those concerned about other tax preparers or firms promoting certain tax schemes, the Justice Department has an alphabetical list of those with permanent injunctions and those who suspect a person or business is violating an injunction can contact the department's tax division by emailing tax.mail@usdoj.gov.

Fiver other defendants, which includes Rhonda Eickhoff, John Eickhoff Jr. and Hoffman Associates LLC, John William Gray II and Damon Thomas Eisma were barred from organizing, promoting, selling or marketing the CRAT tax scheme last May. John Eickhoff Jr. was required to pay back $400,000 and Hoffman Associates had to pay back $1.1 million from the scheme.

Charles Dunlap covers local government, community stories and other general subjects for the Tribune. You can reach him at cdunlap@columbiatribune.com or @CD_CDT on Twitter. Subscribe to support vital local journalism.

This article originally appeared on Columbia Daily Tribune: Columbia CPA Group hit with injunction over tax avoidance scheme