Colorado dentist accused of tax evasion for using illegal tax shelter

A dentist from Colorado has been charged with six counts of tax evasion for using an illegal tax shelter, according to a federal grand jury in Denver.

Ryan Ulibarri, owner of a dental clinic in Fort Collins, faces accusations of defrauding the United States government of more than $1 million. The case highlights the growing concern over sophisticated tax evasion schemes, even in the professional services sector.

Case details and their tax implications

According to the report from the Department of Justice, Ulibarri allegedly purchased a tax shelter for $50,000 in 2016. Between 2017 and 2022, he allegedly used this mechanism to hide from the Internal Revenue Service (IRS) more than $3.5 million in income generated by his dental practice.

The accusation alleges that Ulibarri created a complex structure of three trusts and a private foundation. He is accused of having transferred the ownership of his dental clinic to one of these trusts and of having channeled almost all the income from his practice to the bank accounts of these entities.

Allegedly, these funds were used to cover personal expenses, such as his mortgage and credit card bills. Additionally, he is accused of filing false tax returns both for himself and for the trusts, incorrectly allocating the income he earned and controlled.

Legal Consequences and Judicial Process

Each charge of tax evasion carries a maximum penalty of five years in prison. The final sentence will be determined by a federal judge, taking into account sentencing guidelines and other statutory factors.

The IRS Criminal Investigation is handling the case, with prosecutors Amanda R. Scott and Lauren K. Pope, along with Senior Legal Advisor Corey J. Smith from the Tax Division, in charge of the prosecution.

This case underscores the importance of tax transparency and compliance with regulations, both in traditional sectors and in emerging industries, including the realm of cryptocurrencies and digital finance. Tax authorities continue to strengthen their efforts to detect and pursue sophisticated tax evasion schemes across all economic sectors.