Witness: Returns false

Topeka Capital-Journal, The, Jan 23, 2008 by Steve Fry

By Steve Fry

THE CAPITAL-JOURNAL

KANSAS CITY, Kan. - Michael Craig Cooper told a tax specialist that Renaissance, The Tax People, wouldn't need to develop an auditing program for the Topeka-based tax-reduction program, the tax specialist testified Tuesday.

Cooper said he would make his money and be gone before the Internal Revenue Service investigated Renaissance, Thomas Steelman told a U.S. District Court jury. Steelman, an IRS revenue agent for 28 years before he retired in 1995, started his own small tax and accounting business before Renaissance hired him in November 1997 on a service contract. He and another contract worker answered questions from Renaissance customers during large-scale conference calls, and he prepared tax returns for customers.

Tuesday was the start of the second week in Cooper's jury trial at the Robert J. Dole U.S. Courthouse here.

Cooper, 53, who faces 148 federal counts, is charged with conspiring to cheat the IRS and Renaissance customers.

Early in the Renaissance business, Steelman said he wanted Renaissance, which sold a program to advise customers how to reduce their taxes, to develop an audit program to aid the customers. Steelman suggested the audit idea to Cooper, but he wasn't interested, Steelman said.

Cooper said " he could get his money in three or four years and be gone before the IRS hit," Steelman told jurors.

Steelman admitted that a series of tax returns computed by Renaissance for several "individual marketing associates" were false.

For example, one couple, who were IMAs, claimed they had a business loss of $9,709, including car and truck expenses of $3,638, child wages of $4,250 and a business use of the home totalling $1,647, Steelman said. According to the tax return prepared by Steelman's accounting and tax business for Renaissance, the couple owed $21 to the IRS, Steelman said. Steelman said he didn't know how someone could have a $9,709 business loss and owe $21 to the IRS.

Steelman testified as part of a plea agreement in which he pleaded guilty in 2002 to one count of conspiracy and nine counts of aiding or assisting the preparation or presentation of false income tax returns. He is to be sentenced April 28.

Steve Fry can be reached

at (785) 295-1206

or steve.fry@cjonline.com.