In December 2004, Judge Larry A. Burns from the United States District Court declined a preliminary injunction that would have continued to freeze $500 million in assets linked to Xelan. During his ruling, Judge Burns told the court that the Department of Justice failed to prove that it would be successful in a civil tax fraud case. The IRS has yet to determine if tax shelters sold by Xelan actually violate tax law. Full the full press release, please click here.
In November 2004, the Internal Revenue Service launched a massive investigation into a financial planning company accused of running abusive tax shelters for thousands of medical doctors and dentists. Judge Thomas J. Whelan issued an order freezing over $500 million in assets from Xelan, the Economic Association of Health Professionals, a privately owned group of about a dozen companies that sells investment advice and financial planning services to over 4,000 doctors and dentists across the country.
The I.R.S. is focusing its investigation on two plans, a charity known as the Xelan Foundation which doctors used to make "contributions" to their children's college tuition and a disability insurance program, which allowed doctors to defer taxes for seven years. Xelan executives allegedly used a percentage of the funds for personal reasons and to buyout doctors and dentists no longer interested in the program.
Xelan, based in San Diego, was founded by Dr. L. Donald Guess, who has been told to turn in his passport and not destroy company documents.
If you are a doctor or dentist and are the victim of Xelan's abusive tax shelters, it may be important to contact an attorney who can help you protect your legal rights. Please keep in mind that there may be time limits within which you must commence suit.
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- Consumer Fraud