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Even if he vows to eliminate “any dollar of waste, fraud and abuse across federal budgets and operations,” Stephen Ehikian, the new representative manager of the General Services Bureau, has said that the company will specialize in taxes. We have appointed a senior advisor. A deal branded by a bipartisan Senate committee exc, the IRS as “abusive” and “worst, worst tax fraud.” The advisor is fighting more than $4 billion in tax agencies on unauthorized deductions for thousands of his clients.
GSA, a federal agency responsible for managing government land and property, is from Frank Schuler IV, a 57-year-old co-founder and longtime president of Atlanta-based real estate investment company Ornstein-Schuler. I’ll take advice. . Schuler’s company has been for years among the most prolific promoters of tax shelters’ transactions known as “syndicated conservation easements.”
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Schuler and his colleagues have used tax credits created to reward landowners who waive their area development rights by donating those rights to non-profit land trusts. . If used as intended, conservation easements can preserve untouched land as a park that is available to the public, and reward land donors with charitable tax deductions.
But intermediaries like Schuler’s company have turned tax clauses into highly profitable businesses, turning packaging easements into something essentially an oversized tax credit for purchasing. After taking away cheap vacant land, Schuler and others usually declare that the property is suitable for anything from gravel mines to luxurious resorts, and has many value, and much value. We hired a private appraiser who was willing to do it. That purchase price. He then sold his easement donation shares to the rich. The rich claimed a much-increasing tax credit based on the valuation, cutting taxes twice as much as their investment. Propublica was the first to begin researching the syndicated agency operations in 2017, which cost tens of millions of tax revenues.
The IRS, the Department of Justice, and Congress have struggled for many years through closing schemes, through public warnings, hundreds of audits, tax court cases and criminal prosecutions. These efforts were countered by lobbying spending from promoters and the creation of a Washington-based trade group that Schuler established, called the Partnership for Conservation. Syndication supporters have pressed Congress to reimburse the IRS crackdown.
In 2020, the Senate Finance Committee released a bipartisan investigation report on the transaction. (Schuler was one of six people summoned by the committee to provide information by the committee.) A report detailing Ornstein-Schuler’s practices has made syndicate easements rich. It described it as a “dollar machine” for taxpayers and explained that it saves two dollars on all the dollars they place. “Promoters pocket millions of dollars of fees to organize transactions.” The practice was ultimately suppressed through a law passed in late 2022, but it said “false tax avoidance.” It remains on the IRS’ “Dirty Dozen” list for Strategy.
“This is someone who made money by tearing down American taxpayers and should not come close to the position of tax-paying authority,” said Ron, an Oregon Democrat who helped oversee the Senate investigation. – Senator Wyden commented in writing. After being informed of Schuler’s appointment. “He’s perfect for the Trump administration.”
The exact role of Schuler in the government is unknown. GSA staff said he attended the latest 15-minute video “Check-in” and 28-year-old video “Check-in” conducted by 28-year-old Nate Cavanaugh. Kavanaugh introduced Schuler.
Schuler’s photos and contact information were listed in the agency’s internal staff directory last week shortly after his profile disappeared from the Ornstein-Schuler website. However, it is unclear whether he is a paid civil servant or a volunteer related to Elon Musk’s doge’s efforts. Schuler and Matt Ornstein did not respond to calls, messages or emails seeking comment. GSA and Ehikian did not respond to emails sent to the agency’s press.
Frankschler Credit: Ornstein-Schuler Website
In the past, Schuler has described his tax transactions as justified and well intended. In an interview with Propublica in 2017, he said that his entry into the easement syndicate business was a result of a personal inspiration that was stimulated when his toddler son compared the pavement of a residential development with contamination. He said that. As Schuler explained, “The importance of saving land for him and future generations really pushed me to this point. …So today I am very passionate about conservation. .”
Ornstein-Schuler dropped out of the syndicated business in 2019, citing “uncertainty related to recent developments and property conservation and gifts.” The company has turned its eye on other real estate and tax areas, including launching a new division to buy and sell Georgia film tax credits. Schuler also reportedly earned credits as executive producer for the film in which Mira Sorvino played the AI home security system. (Ornstein, CEO of Ornstein-Schuler, also co-founded a private equity company.
However, the legal war over Ornstein-Schuler’s tax avoidance business continues today. According to a recent IRS filing, the company has filed more than 100 tax court cases, including transactions, challenging more than $4 billion in granted charitable deductions from around 2,000 investors. Many cases are still pending. Ornstein-Schuler has made long-term efforts to reach a global settlement with the IRS. Another submission would result in such a contract clearing the path to tax collection of $1.5 billion, and personally, Schuler and his partners would cost about $150 million in additional taxes, interest and penalties. It includes an August 2022 letter from one of the law firms claiming.
A tax court ruling passed on last year caused Schuler’s first case to actually go to trial, including multiple conservation easements from 2014 on 4,607 acres in rural Alabama. The promoter argued that the sand and gravel mining potential justified a charity deduction totaling $187 million. Investor promotional materials have shown to project tax savings of $200,000 for every $100,000 investment. The decision resolved 13 linked cases, including real estate, but supported the IRS, banning $180 million of about $180 million in amortization, 40% of the unauthorized amount A penalty was imposed for “total rating misrepresentation.” The judge found that the partnership promoted by Schuler claims a $50,000 deduction per acre on land purchased within an acre, at $2,200 per acre.
In his opinion, Albert Lauber, a senior judge at the U.S. Tax Court, for every dollar he invests, at the standard pitch of a promising investor. , assuming he will obtain high quality property valuations of the sky and produce something beneficial. Depreciation by investors. “When asked how he paid upfront investment-to-deduction rates of $4.389 to $1 before the assessment took place, Schuler said the ratings were basically the taxes they are offering. It said it has nothing to do with amortization,” the judge wrote. He called the land values that Schuler’s company claimed were “completely incredible.”
A billion dollar loophole
“We were making a lot of money,” Schuler testified in the incident. “The investors were doing well, and we felt it was great that the land was preserved.”
Ornstein-Schuler is also one of the defendants in a federal group lawsuit filed by three investors in Georgia. The lawsuit will work with lawyers, accountants, appraisers and others to promote easement deductions based on “subtle inflation and omissions” by developing “a mountain of fraudulent inflation and omissions.” They claim they worked together to collect millions of fees through “fraud schemes.” Ornstein-Schuler and other defendants filed joint claims to dismiss the case, claiming that the risks of easement investments were fully revealed and that no one misunderstood.
Ornstein-Schuler is also attacking. In December 2023, it sued the IRS, claiming that the agency was unable to meet its Freedom of Information Act request for the agency’s arrangement of documents. The company has accused “IRS abuse in relation to targeting conservation easement transactions.” He said this is part of a “well-known campaign.” Among the requested documents, “all records of communication between IRS employees and news media members,” Propublica reporter Peter Elkind, Wall Street Journal Reporter Richard Rubin, and Forbes Reporter Peter Reilly. About the role. Rod Rosenstein, the US Deputy Attorney General during the first Trump administration, represents Ornstein Schuler in the incident.
Doris Burke contributed to his research. Avi Asher-Schapiro contributed the report.
