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Justice Department Sues to Shut Down Abusive Timeshare-Related Tax Scheme
on: November 25, 2015 Print Email
Justice
Washington, DC (November 25, 2015) — The United States filed a civil injunction suit seeking to bar James Tarpey, a Montana-based attorney, Project Philanthropy, Inc. (a District of Columbia corporation which does business as Donate for a Cause) and Timeshare Closings, Inc. (a Colorado corporation which does business as Resort Closings, Inc.) from promoting an allegedly abusive timeshare donation scheme, the Justice Department announced yesterday. The United States also filed suit against three of Tarpey’s associates – Ron Broyles of California, Curt Thor of Washington and Suzanne Crowson of Montana – all of whom, according to the complaint, assisted Tarpey in facilitating the timeshare donation scheme.
According to the complaint, which was filed in the U.S. District Court for the District of Montana, the timeshare donation scheme encourages timeshare owners to donate their unwanted timeshares to Donate for a Cause, a tax-exempt entity organized and operated by Tarpey. The complaint states that customers are falsely promised “generous” tax savings and that the defendants purportedly determine the “fair market value” of the timeshare by selecting an independent, third-party appraiser. The United States further alleged that Tarpey’s customers (the timeshare owners) pay significant processing fees to Resort Closings, Inc. to transfer the timeshares to Donate for a Cause. According to the complaint, Tarpey, Broyles, Thor and Crowson appraise the customers’ timeshares in a manner which does not comply with the law and which significantly overvalues the timeshares. According to the complaint, the appraisals fail to comply with regulations governing appraisals submitted with federal tax returns, contain substantive errors and omissions, fail to comply with generally accepted appraisal standards and grossly overvalue the timeshares. In addition, Tarpey, Broyles, Thor and Crowson are legally prohibited from appraising the timeshares for which their customers claimed federal tax deductions because they are too closely affiliated with Donate for a Cause, the complaint alleges.