Own Nothing, Control Everything

A federal jury convicted Marcia Predmore, Roderick Prescott, Suzanne Thompson, and Weldon Wulstein for their roles in an abusive layered trust tax shelter that DOJ says helped business owners evade federal income tax on up to 98 percent of business profits. 

The shelter used a business trust, family trust, charitable trust, and private family foundation, and was marketed with the phrase “own nothing, control everything.” 

Jason explains how abusive trust structures cross the line, why warnings from attorneys, CPAs, financial professionals, and IRS guidance matter in criminal tax cases, and what legitimate business owners should do instead when they need tax planning, asset protection, estate planning, or charitable giving advice. 

Key Takeaways 

• A trust is not a device for making taxable income disappear. 
• Asset protection and estate planning are legitimate goals, but they need real legal substance and clean tax reporting. 
• Personal expenses do not become deductible because they move through a trust. 
• Charitable deductions require real charitable transfers, substantiation, and loss of personal control. 
• Tax professionals should be cautious when a promoter asks them to prepare returns based on a packaged tax shelter. 
• If the plan depends on a slogan like “own nothing, control everything,” get independent tax counsel before signing or paying. 

Resources Mentioned 

• DOJ case source: https://www.justice.gov/opa/pr/four-abusive-tax-shelter-promoters-found-guilty-40m-nationwide-tax-evasion-scheme 
• The Law Office of Jason Carr, PLLC: https://carrtaxlaw.com 

Disclaimer 

This video is for informational and educational purposes only and does not constitute legal or tax advice. Viewing this video does not create an attorney-client relationship between you and The Law Office of Jason Carr, PLLC. The discussion is based on publicly available information and is not a complete analysis of any person’s legal rights, defenses, tax obligations, or case facts. Any commentary about what a taxpayer, business owner, or advisor “should have done” is general educational discussion only and may not apply to your situation. If you have a specific legal or tax question, consult a qualified attorney or tax professional licensed in your jurisdiction.

Comment Policy

Please do not post confidential, sensitive, or personally identifiable tax information in the comments. We do not provide individualized legal or tax advice in the comments or social media replies.

Transcript

SPEAKER_01 0:06

You're listening to Final Notice. Real Tax Cases Exposed with Jason Carr. Each week we break down real Department of Justice tax fraud prosecutions and reveal what should have been done to avoid them. And now here's your host, Jason Carr.

SPEAKER_00 0:28

$40 million in tax loss, four layers of trust, and one sales pitch. Own nothing, control everything. Today's case comes out of Colorado, but the pitch was national. The Justice Department says Marsha Predmore, Roderick Prescott, Suzanne Thompson, and Weldon Wolstein promoted an illegal layered trust tax shelter to hundreds of high net worth business owners across the country. The structure had four pieces a business trust, a family trust, a charitable trust, and a private family foundation. Now that sounds sophisticated, and that's the point. Bad tax schemes rarely come wrapped in a folder labeled tax fraud. They come with binders, seminars, flow charts, impressive sounding entities, confident speakers, and language that makes ordinary income sound like a problem only to unsophisticated people still pay tax on. This one allegedly came with a very attractive promise. Business owners could use a structure to evade federal income tax on upwards of 98% of business profits. Now if your tax plan makes almost all your business income disappear, the next question is very simple. Where did it go? According to the DOJ, the answer was not into legitimate deductions. Prosecutors said that promoters taught clients to use the structure in part by claiming deductions for non-deductible personal living expenses and fraudulent charitable contributions. And that is the heart of the case. A trust can be legitimate. A private foundation can be legitimate. Charitable planning can be legitimate, and asset protection can be legitimate. But a trust is not a black hole where taxable income goes to disappear. A private foundation is not a personal checking account with better branding. And a deduction is not valid because someone put it into a PowerPoint. Let's talk about the players. Predmore was a registered life insurance agent who promoted the tax shelter to clients through a business she operated with her spouse. Prescott had previously been convicted of tax evasion and permanently enjoined from promoting abusive tax shelters. The DOJ says he promoted the so-called private family foundation layer, the final layer of the shelter. Thompson operated a bookkeeping firm and prepared financial statements for the clients' trusts. And Wolstein was a CPA who prepared hundreds of false tax returns for clients who purchased the shelter. Now that mix matters. You had promotion, you had bookkeeping, you had return preparation, you had trust documents, and you had seminars. To a business owner, that can feel like a complete professional ecosystem. That is what makes these cases dangerous. The taxpayer hears the same theory from several different people and starts to think repetition equals legitimacy. It does not. If the structure turns personal expenses into deductions, the number of people repeating the explanation does not make it work. If the structure lets you donate money while keeping control of the money for personal use, the terminology does not save you. And if the structure reduces tax on nearly all business profit, you need an independent person to ask the questions the promoter does not want asked. The slogan in this case was memorable. Own nothing, control everything. Now that's a great marketing phrase. It's also a phrase that should make every tax professional in the room sit up straight. Because tax law cares deeply about control. Who earned the money, who controls the money, who benefits from the property, who can direct how funds are used, who bears the economic burden, who has really given something away. You can move title, you can create entities, and you can sign trust documents. But if the taxpayer still controls everything, spends the money personally, and enjoys the economic benefits, the structure may not change the tax result in the way the promoter claims. Tax planning needs substance. A business owner can structure operations through entities. A family can use trust for estate planning. A taxpayer can make real charitable contributions. And a founder can use retirement plans, buy sale planning, insurance planning, succession planning, and legitimate asset protection. Those are real tools. But real tools have rules, and the rules matter. So how did this case unravel? The GOJ says the defendants were repeatedly warned by attorneys, CPAs, financial professionals, and IRS guidance that the trust-based scheme was illegal, but chose to ignore those warnings. That is a serious fact in a criminal tax case. Criminal tax cases often turn on intent. The government wants to show the defendant did not simply make a mistake, misunderstand a complex rule, or rely on a reasonable interpretation. Warnings help prove state of mind. If an attorney warns you, if a CPA warns you, if financial professionals warn you, if IRS guidance warns you, and you keep selling the structure anyway, those warnings can become powerful evidence. Court records also described evidence tied to search warrants, bank accounts held in the name of trusts, IP address records, emails, businesses operated from a residence, and tax preparers who prepared allegedly false returns. The court record also described an undercover agent being quoted $25,000 to set up a trust package and another $25,000 to set up a family foundation. That is how these cases get built. Not with one magic document, but with emails, bank records, client files, return preparation records, promotional materials, financial statements, witnesses, warnings, undercover conversations, and then of course the returns. Once IRSCI can connect the pitch to the structure and the structure to the returns, and the returns to tax loss, the story becomes much easier for prosecutors to tell. On June 8, 2026, a federal jury convicted all four defendants of conspiracy to defraud the United States for operating the abusive trust tax evasion scheme. The DOJ says the scheme caused approximately $40 million in losses to the United States. Thompson and Wolstein were also convicted of six counts each of assisting in the preparation of false tax returns. Predmore was convicted of six counts of tax evasion for her personal use of the same shelter she promoted to others. All four face a maximum penalty of five years in prison for the conspiracy charge. Thompson and Wolstein also face up to three years for each false return count. Predmore faces up to five years for each tax evasion count. So what should they have done instead? Let's separate the goal from the method. If a business owner walks into my office and says, Jason, I want to reduce taxes, protect assets, plan my estate, and support charity, my answer is not no. Those are normal goals. The question is how? For tax planning, start with the business itself. Is the entity structure right? Should the business be taxes and S corporation? Is reasonable compensation documented? Are owner distributions clean? Are expenses properly separated between business and personal? Are estimated taxes being paid? What about retirement plans? Are they being used correctly? Are accountable plans in place for reimbursements? Those are practical, defensible tools. They may not erase 98% of the income, but that's because real tax planning usually does not sound like a magic trick. For asset protection, use entities correctly. Do not run personal expenses through the operating company. Don't treat every account like one family wallet. You have to respect separateness. You maintain your books, you document transfers, keep insurance in place, avoid fraudulent transfer issues. Asset protection works best before there is a creditor problem. Once there's a claim, moving assets around starts to look very different. Now for estate planning, you use trust for what trusts are actually designed to do. Revocable trust can help with administration and probate avoidance. Irrevocable trust can shift ownership when structured and operated correctly. Family planning structures can also make sense. But if the client keeps all practical control and uses the assets as personal property, the tax law may treat the arrangement accordingly. For charitable planning, the charity must be real. The contribution must be real. The taxpayer must give up control. The deduction must be substantiated. A private foundation is not a substitute for a personal bank account. If the money is still being used for the donor's personal benefit, calling it charitable does not make it charitable. For tax professionals, this case has a second lesson. Be careful when a promoter brings you a structure and asks you to prepare the returns. You may think your role is limited. You may think, well, I didn't sell the plan, I just prepared the return. That is not always how the government will see it. If the return is the mechanism that claims the false deductions, then the return preparer is part of the paper trail. Ask for the legal opinion. Read the legal opinion. Do not accept a summary slide. Ask what changed economically. Ask who controls the money. Ask whether personal expenses are being deducted. Ask whether charitable contributions are real. Ask whether the taxpayer has received warnings from other professionals. Ask whether the structure has been listed, challenged, enjoined, or criticized by the IRS. If the promoter gets irritated by basic questions, that is useful information. If the client says, Well, the promoter told me not to talk to anyone else, that is even more useful information. Tax planning should always survive scrutiny. If a structure only works when no independent professional reviews it, it does not work. For business owners, the practical rule is simple. If someone promises that you can own nothing, control everything, deduct personal expenses, donate money while using it, and pay tax on almost none of your business income, definitely take a pause. Do not sign, do not wire the setup fee, do not let the promoter pick the CPA, do not let the sales team define the law. Get independent tax counsel. Bring the documents, bring the slide deck, bring the fee agreement, bring the trust instruments, bring the proposed tax reporting. And ask one question. If the IRS audits this, what exactly are we going to say? That single question tends to clarify things quickly. The takeaway in this case is this. Complexity is not compliance. A four-layer structure can still be a sham. A private foundation can still be a personal control with NICE or stationary. A trust can still fail if the economics never changed. Good tax planning can answer basic questions. Who owns the income? Who controls the money? Who benefits from the property? What changed economically? What is the authority? What documents support the deduction? What happens if an IRS agent reads this file three years from now? If the answers are solid, that's great. But if the answers depend on the seminar slogan, stop. I'm Jason Carr, tax attorney. If you want to make sure you never end up on this podcast, you know where to find me. Cartaxlaw.com. Link is in the show notes. This has been Final Notice, Real Tax Cases Exposed.

SPEAKER_01 11:50

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