Ex-IRS Agent Sentenced to 46 Months for Tax Fraud

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A retired IRS agent who worked for a company that claimed to cut customers’ taxes has been sentenced to nearly four years in prison for taking part in a tax fraud scheme.

Thomas W. Steelman, 72, of Blue Springs, Mo., was also ordered to pay more than $10.6 million in restitution to the IRS. Steelman worked for a now-defunct firm called Renaissance, the Tax People, in Topeka, Kan. He took part in promotional meetings, conferences, rallies and telephone conference calls to promote Renaissance’s services and recruit clients, according to prosecutors. Steelman was also a featured speaker on Renaissance’s promotional videotapes. He encouraged clients to claim excessively high Form W-4 exemptions, and when speaking to prospective clients, he falsely represented that numerous experts had reviewed the program and found no problems with it.

Prosecutors said that throughout 1998, 1999 and 2000, he prepared federal income tax returns fraudulently overstating clients’ losses and converting personal expenses into business deductions.

Steelman pleaded guilty in April 2002 to one count of conspiracy to defraud the IRS and to commit wire fraud and mail fraud, and nine counts of preparing fraudulent federal income tax returns. In his plea, Steelman admitted he used the fact that he was a retired IRS agent to overcome objections and questions about the tax program Renaissance offered its clients.

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Tax practice