Arizona Tax Preparer Pleads Guilty to Filing False Tax Returns in Abusive-Trust Scheme

Kent Ellsworth, an Arizona tax preparer, pleaded guilty to two counts of assisting in the preparation of false tax returns. This was part of a nationwide scheme that utilized abusive-trust tax shelters to defraud the IRS. Ellsworth’s fraudulent activities carried out through his business, Ellsworth Stauffer P.C., concealed more than $60 million in income from the IRS, resulting in approximately $17 million in lost tax revenue.

Ellsworth’s guilty plea highlights a significant victory in the fight against tax fraud. The case underscores the IRS and Justice Department’s commitment to identifying and prosecuting those who engage in tax evasion schemes. Businesses and individuals are reminded of the importance of complying with tax laws and the severe consequences of attempting to defraud the IRS.

Details of the Fraud

From 2017 to 2023, Ellsworth prepared and filed over 500 false tax returns for around 60 clients across the country. These clients, mostly successful business owners, used the tax shelter to underreport their income and evade tax liabilities. The scheme involved clients assigning nearly a