A Colorado dentist was sentenced to related to the use of an illegal tax shelter, according to a Wednesday announcement by the Internal Revenue Service Criminal Investigation’s Denver Field Office and the U.S. Justice Departmentap Tax Division.
Ryan Ulibarri, owner and operator of Ulibarri Family Dentistry in Fort Collins, purchased an “abusive-trust tax shelter” for $50,000 in 2016, according to court documents.
The IRS Criminal Investigation division investigated the case and found that the tax shelter involved concealing income and creating false tax deductions through the use of a so-called business trust, family trust, charitable trust and a private family foundation, all of which Ulibarri created and controlled.
From 2016 through 2023, Ulibarri used the tax shelter to conceal from the IRS over $5 million in income he earned from his dental practice and evade more than $1.6 million in federal and state income taxes owed on that income.
To set up the tax shelter, Ulibarri signed trust instruments that named him as trustee of the three trusts and foundation, and he opened bank accounts in the name of each entity.
He further recruited friends to falsely sign his trust instruments as the purported creators of the trusts to make it seem as if Ulibarri himself was not the real creator.
Ulibarri transferred majority ownership of his dental practice to his business trust, despite being warned by attorneys and certified public accountants that Colorado law prohibits trusts from owning dental practices.
The announcement revealed Ulibarri then transferred over $5 million in income he earned from his dental practice into the bank accounts of the various trusts and foundation, attempting to make it appear that the funds belonged to those entities instead of himself.
Ulibarri retained complete control over those funds and used the funds to pay for personal expenses, including his home mortgage, credit card bills, boats, luxury vacations and professional baseball season tickets.
The Fort Collins dentist also filed false tax returns for himself, his dental practice, the trusts and his foundation, falsely reporting the income he earned from his dental practice as income of the trusts, officials said.
On those tax returns, Ulibarri also claimed fraudulent deductions for his living expenses, which he disguised as trust expenses and charitable donations.
In addition to his prison sentence, Ulibarri will serve three years of supervised release, pay a $150,000 fine and pay nearly $1.5 million in restitution to the IRS, along with approximately $166,966 to the Colorado Department of Revenue.
Trial Attorneys Amanda R. Scott and Lauren K. Pope and Assistant Chief Andrew J. Kameros of the Tax Division prosecuted the case.
