California IN BRIEF : SAN FRANCISCO : IRS Accuses est Head of Tax Dodging

Est founder Werner Erhard has for years transferred assets from his human potential empire to dodge taxes, an IRS investigator told a federal judge. “It is my opinion that Mr. Erhard has been involved in sham transactions for more than 20 years,” IRS agent Louis Kraushaar said. The IRS seized $7 million of Erhard’s property in April after concluding he had sold business interests or properties to his brother and associates, Kraushaar said. The agency believes Erhard shifted the assets to prevent the IRS from claiming them. The U.S. Tax Court in New York ruled this month that Erhard claimed phony income tax deductions and was liable for about $5.5 million in back taxes and penalties. The ruling said Erhard claimed deductions for interest payments on $15 million in “sham” loans and for “artificial” financial transactions.