A dentist from northern Colorado, Ryan Ulibarri, was sentenced to more than three years in prison this week for his role in concealing millions of dollars through an illegal tax shelter.
Ulibarri, who owned and operated Ulibarri Family Dentistry in Fort Collins, was found guilty of using a tax shelter to hide over $5 million in income and evade paying more than $1.6 million in federal and state taxes.
The Abusive Tax Shelter Scheme
In 2016, Ulibarri purchased an abusive trust tax shelter, which he used to falsely create tax deductions and conceal income from his dental practice. He set up a foundation and three trusts that he controlled and served as the trustee of.
According to authorities, Ulibarri went so far as to recruit friends to falsely sign as the creators of these trusts to hide his involvement.
Despite warnings from attorneys and CPAs that such trusts could not legally own a dental practice in Colorado, Ulibarri transferred the majority ownership of his dental practice to the trust. This move helped him funnel income into the trust accounts, making it appear as though the money didn’t belong to him.
He then used these funds to pay for personal expenses such as his mortgage, credit card bills, luxury vacations, boats, and even professional baseball season tickets.
Filing False Tax Returns
In addition to concealing income through the trust, Ulibarri also filed fraudulent tax returns. He disguised personal living expenses as trust expenses and claimed false charitable donations in an attempt to reduce his tax liability. His actions allowed him to avoid paying a significant amount of taxes over several years.
Legal Consequences
On Wednesday, Ulibarri was sentenced to 41 months in prison for tax evasion. The judge also ordered him to serve three years of supervised release after his sentence.
In addition to his prison sentence, Ulibarri was fined $150,000 and ordered to pay restitution. He must repay $1,449,121 to the IRS and $166,966 to the Colorado Department of Revenue for the taxes he evaded.
A Warning on Tax Evasion
This case serves as a reminder of the serious legal consequences of tax evasion. Ulibarri’s attempts to hide income and manipulate the tax system ultimately led to criminal charges and a lengthy prison sentence.
It highlights the importance of following tax laws and the risks associated with engaging in illegal tax shelters.