Former CPA Michael J. Moore sold a “Special Tax Shelter Strategy” through a Las Vegas firm specializing in adult-entertainment clients. After pleading guilty, he concealed his identity and resumed filing false returns.
Show Notes:
Michael J. Moore operated X Tax Pros, a Las Vegas tax and accounting firm specializing in adult-entertainment clients. From 2015 through 2025, he promised clients that his “Special Tax Shelter Strategy” could eliminate their taxes and create large refunds.
Court records indicate Moore fabricated business losses, cost-of-goods-sold entries, and royalty expenses. Many claimed losses came from entities that conducted no business and had no relationship with the clients.
Moore collected fees reaching tens of thousands of dollars from the resulting refunds. His conduct caused more than $3.5 million in tax loss.
After pleading guilty in September 2025, Moore launched another scheme while awaiting sentencing. He used losses from dormant or defunct entities and concealed his involvement using a former employee’s identity.
Moore pleaded guilty to tax evasion, assisting a false return, wire fraud, and aggravated identity theft. He received 60 months in federal prison on September 2, 2026.
Jason explains Section 7206(2), why phantom entity losses are easy to test, and how identity theft transformed concealment into a separate federal offense.
Key Takeaways
- A business loss requires real economic activity and a valid relationship between the taxpayer and the entity.
- Section 7206(2) applies even when the taxpayer knows about or approves the false return.
- Refund-funded fees create a dangerous incentive for preparers to inflate deductions.
- A prior guilty plea provides strong evidence of knowledge when the conduct continues.
- Taxpayers should compare filed returns against their actual entities, ownership interests, and business records.
- Privilege matters before correcting returns when the taxpayer may have knowingly participated.
Resources Mentioned
26 U.S.C. § 162: Trade or business expenses.
26 U.S.C. § 7201: Attempt to evade or defeat tax.
26 U.S.C. § 7206(2): Assisting or advising the preparation of a materially false tax document.
18 U.S.C. § 1028A: Aggravated identity theft and its additional two-year sentence.
Ninth Circuit Model Criminal Jury Instruction 22.4: Elements of a Section 7206(2) offense.
United States v. Smith, 424 F.3d 992, 1009 (9th Cir. 2005): Section 7206(2) requires assistance, material falsity, and willfulness.
United States v. Marc Howard Berger: CPA convicted after helping a client omit more than $18 million in income.
Berger sentencing: Eight months’ imprisonment, supervised release, and a $20,000 fine
The Law Office of Jason Carr, PLLC: https://carrtaxlaw.com