Scams • Scheme involved using mortgage as withheld income and claiming large refund.
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A federal jury has convicted a Utah woman of filing false tax claims after she received a $228,967 refund using a popular tax scam.
April J. Rampton, 41, formerly of Heber City but now a resident of Motoqua, was convicted earlier this week in U.S. District Court in Salt Lake City on nine counts of filing false claims. The jury was unable to reach a verdict on six other counts.
U.S. District Judge Dee Benson set sentencing for Feb. 27. Rampton faces a possible maximum sentence of five years in prison and a fine of up to $250,000.
According to court records, Rampton fell behind on her mortgage and in 2008 turned to Winston Shrout, described as her father or father-in-law, but who prosecutors said was "a nationwide promoter of fraudulent tax schemes."
Shrout allegedly promotes a tax scam using Form 1099-OID. The IRS placed the OID scheme on its "dirty dozen" list of worst tax scams for 2012.
Forms 1099-OID are used to report income from certain investments, but under the scam, they typically are used to list debt, a line of credit or a group of expenses as if they were income, 100 percent of which is then claimed as having been withheld to pay taxes. The amount supposedly withheld is then used on a tax return, generating a large refund.
Rampton used the OID method to claim her mortgage as income that was withheld. She subsequently received a $228,967 refund and then helped others to file similar returns, according to court documents.
Several months later, the IRS started an investigation that resulted in Rampton's indictment in September of 2011.