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Tuesday, March 10th, 2009
Shirley G. Graybill, 72, of North Haven, Conn., was sentenced to two years of probation — the first four months of which she must spend in home confinement — after pleading guilty to one count of making and subscribing to a false 2002 tax return.
According to court records, the Triple Diamond Foundation was an entity created by Graybill and her husband, Dale L. Graybill, purportedly to fund cancer research — but which did not have tax-exempt status from the IRS. The Graybills controlled the Triple Diamond Foundation and its bank account. During the 2002 tax year, the Graybills transferred about $350,000 from the Triple Diamond Foundation account, used those funds as income, and failed to pay about $93,293 in federal taxes.
On October 13, 2003, Graybill filed a tax return with the IRS in which she failed to claim her actual taxable income, which was approximately $316,519.79.
The Graybills also must pay $93,293 to the Internal Revenue Service. In addition, Dale Graybill was sentenced to 48 months in prison following his conviction on one count of mail fraud stemming from his operation of a multimillion-dollar Ponzi scheme in which he solicited investments for fictitious investment programs.
Tags: failing to pay federal taxes, failure to pay taxes, filing false tax return, Ponzi, ponzi scheme, tax cheat, tax evasion
Posted in IRS Tax Cases, IRS Times and Inquirer | 1 Comment »
Monday, March 9th, 2009
Last week, Sen. Carl Levin, chairman of the Senate Homeland Security and Governmental Affairs Permanent Subcommittee on Investigations, examined the recent deferred prosecution agreement between the Department of Justice and UBS AG Bank of Switzerland, as well as the DOJ’s ongoing attempts to force the bank to identify its U.S. customers with secret Swiss bank accounts.
Recently, a senior executive of a large Swiss bank was charged with conspiring with other executives, managers, private bankers and clients to defraud the United States by concealing $20 billion in assets from the IRS.
Levin reintroduced his “Stop Tax Haven Abuse Bill” to “fight back and end the abuses inflicted on us by those tax havens.” IRS Commissioner Douglas H. Shulman testified at the hearing and responded to Levin’s suggestions for putting pressure on taxpayers using Swiss banks’ secrecy to avoid paying U.S. tax.
Another sign of the times: IRS enforcement is of rise.
If you are in trouble with the IRS, our specialized staff of attorneys, CPAs, EAs and tax professionals can help. Visit the Tax Resolution Services web site for a free tax relief consultation or call us at 866-477-7762.
Tags: carl levin, IRS audits, IRS debt, IRS enforcement, IRS help, irs news, IRS problem solver, irs problems, IRS tax problems, Michael Rozbruch, offshore asset, shulman, tax cheat, tax evasion, tax expert, tax haven, tax help, tax news, tax resolution, tax resolution expert, tax resolution services, Tax Tips
Posted in Tax news and tips | 1 Comment »
Tuesday, February 24th, 2009
Mark Arthur Henriksen, 56, of Monmouth, Ore., pleaded guilty to one count of income tax evasion for the year 2001.
In 2001 and 2002, Henriksen was a principal of Applied Technical Systems, a business in Lake Oswego that installs commercial data networks. In response to a prior IRS levy against him, Henriksen used a friend to act on his behalf as a nominee shareholder of the company in order to circumvent that levy. Henriksen evaded the assessment of his income taxes by instructing employees to make his bonus checks payable not to him, but instead to shell companies he had created.
Henriksen faces up to five years in prison and a fine of up to $100,000.
Tags: avoiding taxes, tax cheat, tax evasion
Posted in IRS Tax Cases, IRS Times and Inquirer | No Comments »
Monday, February 23rd, 2009
Though slightly down from 2007, tax enforcement number in 2008 were among the highest in a decade.
By Michael Rozbruch
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The large number of tax evasion and audit cases you’re hearing about today isn’t a symptom of yellow journalism.
In fact, the fiscal-year 2008 tax enforcement numbers released by the Internal Revenue Service are among the highest in a decade.
In fiscal-year 2008, the IRS collected $56.4 billion through collection, examination and document-matching efforts. That figure is a slight decrease from 2007’s $59.2 billion but a dramatic increase from 1999, when the government had $32.9 billion in enforcement collections.
But the most dramatic figure in the recent numbers comes in the staffing column. Even as the IRS collected nearly twice as much last year as it did in 1999, the agency accomplished this with fewer enforcement staff members — 20,722 in 2008, compared to 22,543 in 2007 — suggesting the government is becoming more efficient even as it becomes more aggressive.
Last year, the IRS stepped up its investigations of offshore accounts used to hide income and evade taxes. The agency has begun to examine these accounts — and the taxpayers who use them — using the same tools criminal investigators use in looking at those headline-grabbing cases you see in the newspapers.
In fact, these days, IRS agents are doing more than just following the money. They’re building sources.
“Using informants is another part of our toolkit,” IRS Commissioner Douglas Shulman said during a December tax conference.
“Since the inception of the Whistleblower Office in 2007, the IRS has received hundreds of tips on financial institutions and individuals with foreign accounts and international compliance issues. Some of these have become big money cases.
“Dozens of these tips involve the names of individuals with offshore accounts; others involve the names and practices of financial institutions in those countries that typically have strict bank secrecy laws. And keep in mind the value here is far greater than just the names of specific individuals,” Schulman continued.
“With work, these tips provide the information the IRS needs to pursue John Doe summonses – our next important tool.
“The IRS generally uses the John Doe summons authority to identify individuals, groups or classes of US taxpayers whose member identities are unknown, who are involved in specific areas of tax noncompliance and who cannot be identified through other means.”
For taxpayers, the implications of these recently released numbers and Commissioner Schulman’s statements are obvious: The IRS is doing everything and anything it can in its considerable power to investigate and curb tax evasion, from simple audits to examinations of complex, multinational tax shelter programs.
This situation isn’t likely to change. With the economy down and tax revenues decreased, Uncle Sam’s tax-collecting agency is going to take every step it can to collect what’s due. Be warned.
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Michael Rozbruch is a Certified Tax Resolution Specialist, a member of the American Society of IRS Problem Solvers and a Maryland CPA. You can contact him at 866-477-7762 to obtain a free subscription to his newsletter titled The IRS Times & Inquirer.
Tags: Douglas Shulman, IRS audits, offshore accounts, tax audits, tax enforcement, tax evasion, tax noncompliance, tax shelters, Whistleblower Office
Posted in IRS Times and Inquirer | No Comments »
Friday, February 20th, 2009
Thoeun Chan, 52, of Germantown, Tenn., was sentenced to eight months in prison and ordered to pay $207,142.30 in restitution following his guilty plea for tax evasion. Chan, owner of Handiworks Jewelry and Winchester Pawn and Jewelry in Memphis, admitted he failed to report about $274,875 in income for 2001 and about $277,277 in income for 2002. These false returns resulted in a tax loss of approximately $207,142.30.
Tags: avoiding taxes, Failing to report income, filing false federal tax return, tax cheat, tax evasion
Posted in IRS Tax Cases, IRS Times and Inquirer | No Comments »
Monday, February 16th, 2009
Architect Jeffrey Alan Carrithers, of Portland, Ore., pleaded guilty to one count of income tax evasion for the year 2000.
According to the plea, Carrithers received substantial taxable income in 2000 and owed a substantial amount of tax. He willfully attempted to evade taxes, however, by concealing his true taxable income from the IRS and by failing to pay the tax due and owing.
Tags: failing to pay taxes, failure to file tax return, tax cheat, tax evasion
Posted in IRS Tax Cases, IRS Times and Inquirer | No Comments »
Tuesday, February 10th, 2009
An Ohio gambler will spend the next 18 months in prison after pleading guilty to tax evasion charges.
Paul E. Sabatino, of Streetboro, Ohio, who pleaded guilty to the charge, was also ordered to perform 150 hours of community service and continue treatment for gambling addiction.
From 2002 to 2005, Sabatino embezzled approximately $1.7 million from a client of the CPA firm where he worked as an accountant. During that period, Sabatino incurred gambling losses exceeding the amount of the embezzlement and he used most of the embezzled funds to pay his gambling debts. Sabatino attempted to evade taxes of approximately $510,079 owing for those years by concealing the embezzlement income and laundering the money.
During the years 2002 to 2004, Sabatino deposited approximately $1.2 million of the embezzled funds into a bank account he maintained in the name of a nonexistent landscaping business. He reported only $228,200 of those funds on his tax returns, by showing them as Schedule C business receipts of the purported landscaping business. Later, Sabatino began laundering the embezzled funds with the help of a friend.
Tags: embezzled income, filing false federal tax return, money laundering, tax cheat, tax evasion
Posted in Tax Problem FAQs | No Comments »
Saturday, January 24th, 2009
An Ohio physician has been charged with trying to conceal more than $950,000 in income. A federal grand jury indicted Dr. Dominic Joseph Maga, 60, of Dayton, charging him with tax evasion and willful failure to file income tax returns on his taxable income of more than $220,000 per year for the past four years.
Maga is an emergency room doctor employed at Grandview Medical Center and Southview Hospital, both located in Dayton. The nine-count indictment includes four counts of tax evasion for attempting to conceal his income of $260,078.85 in 2003, $255,369.89 in 2004, $240,287.91 in 2005 and $220,996.40 in 2006.
Each count of tax evasion is punishable by up to five years in prison and a fine of up to $250,000.
The indictment also alleges five counts of willful failure to file an income tax return for the years 2002 through 2007. Each count is punishable by up to one year in prison and a fine of up to $100,000. If convicted, Maga’s sentence would also include payment of all taxes due plus penalties and interest, as well as the costs of prosecution.
Tags: conceal income from IRS, failure to file income tax, tax cheat, tax evasion, tax fraud, willful failure to file tax
Posted in IRS Tax Cases, IRS Times and Inquirer | No Comments »
Thursday, January 15th, 2009
You read in newspapers about big-name celebrities caught violating U.S. tax law. But beware: You’re at risk too.
By Michael Rozbruch
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Celebrity lands in tax trouble.
That story always finds a way into your newspaper or your favorite news website.
After all, who hasn’t read about Brazilian race-car driver and “Dancing with the Stars” winner Helio Castroneves?
The 33-year-old faces trial in Miami on charges he failed to report $5.5 million in income from 1999 to 2004.
That’s news — a good topic for the water cooler.
But celebrities such as Castroneves are simply individuals among the thousands of people who land in trouble with the IRS every year.
You read about folks like Castroneves, but it’s important to remember there thousands of folks just like you who face life-changing charges because they decided to cheat a little on their taxes.
Average people are having tax troubles and facing prosecution, even prison time time, nationwide.
For example:
• Las Vegas attorney Mark A. Lobello will spend the next 15 months in a federal prison for trying to avoid paying $140,000 in income taxes.
• Thomas Rikki Farr, 66, of Scottsdale, Ariz., was a businessman whose clients were in Hong Kong. He has three months on Lobello, after having been sentenced to 18 months in prison after evading hundreds of thousands of dollars in taxes.
• Thomas B. Parker, 64, and his wife Margaret A. Parker, 65, of Vidor, Texas, could spend three of their next retirement years behind bars. A jury found them guilty of evading more than $100,000 in taxes.
You read all about Castroneves. But you didn’t read about these people, did you?
And don’t be fooled: It’s not just the people who evade six figures or more who get caught.
The small-timers are also facing prosecution. Every year, hundreds of middle class people across the country are indicted for filing a false tax return.
Now that we’re in 2009, the IRS’s aggressive enforcement policies are unlikely to change. In fact, they are likely to become more aggressive.
Take, for example, what IRS Commissioner Douglas Shulman said of enforcement during a recent speech.
“Think of a detective working a case who may employ everything from eyewitness accounts, physical evidence, paper trails and the cooperation of law enforcement officials in other states,” Shulman said. “That’s similar to what we’re doing with the following tools (of enforcement).”
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Michael Rozbruch is a Certified Tax Resolution Specialist, a member of the American Society of IRS Problem Solvers and a Maryland CPA. You can contact him at 866-477-7762 to obtain a free subscription to his newsletter titled The IRS Times & Inquirer. Vist the Tax Resolution website for a free tax consultation.
Tags: Douglas Shulman, filing false tax return, IRS enforcement policies, IRS enforcement policy, Michael Rozbruch, tax evasion, tax troubles
Posted in IRS Tax Cases, IRS Times and Inquirer | 5 Comments »
Wednesday, January 14th, 2009
Darrell Forest May, 58, of Phoenix, was sentenced to five years of probation and fined $20,000 after pleading guilty to tax evasion. From July 2000 to December 2005, May attempted to evade the payment of income taxes for tax years 1998, 1999 and 2000. To conceal his income and evade payment of taxes, among other ways, he filed false W-4 forms in which he claimed “exempt” status and did not use bank accounts levied by the IRS. In all, May evaded $98,770 in taxes.
Tags: claiming "exempt" status, evade income tax payment, filing false tax return, filing false W-4 form, tax evasion
Posted in IRS Tax Cases, IRS Times and Inquirer | 1 Comment »
Saturday, January 10th, 2009
A former Wayne, N.J., resident who operated a mortgage and real estate business pleaded guilty to tax evasion, admitting he failed to report to the IRS nearly $836,500 of income — a portion of which represented proceeds from fraudulent mortgage transactions.
Russell Mainardi, 51, of Hyland Mills, N.Y., admitted he permitted mortgage loans to be made to borrowers based on false information submitted to the banks. He then directed commissions and proceeds from the real estate transactions to a company bank account that he used to hide the income from the IRS.
Mainardi pleaded guilty to a one-count information charging tax evasion. He faces up to five years in prison and a $250,000 fine.
Tags: failure to report income, hiding income from IRS, tax evasion, tax fraud
Posted in IRS Tax Cases, IRS Times and Inquirer | No Comments »
Thursday, January 8th, 2009
A Las Vegas lawyer who previously pleaded guilty to tax evasion and willfully failed to file federal income tax returns or pay any taxes for a five-year period was sentenced to 15 months in federal prison.
Mark A. Lobello was indicted by the federal grand Jury in November 2006. According to court records, Lobello handled business disputes, personal injury lawsuits and divorce matters. From 1997 and 2001, Lobello earned more than $600,000 in income but failed to file federal income tax returns or pay any federal income taxes for the those years, even though he owed the IRS more than $140,000. Lobello also attempted to conceal his income from the IRS by dealing in cash and mixing business funds with personal funds.
“Everyone, including attorneys like Mr. Lobello, has a duty to comply with federal tax laws and has an obligation to file accurate tax returns and timely pay their taxes,” said Nathan J. Hochman, Assistant Attorney General of the Justice Department’s Tax Division, in a statement. “If they violate these laws, the consequences are severe — indictment and criminal prosecution, being branded a felon for the rest of their lives, significant prison time, and the requirement to pay back all the taxes plus steep penalties and interest.”
Tags: concealing income from IRS, failure to file federal tax return, failure to pay taxes, tax evasion
Posted in IRS Tax Cases, IRS Times and Inquirer | 1 Comment »
Sunday, December 28th, 2008
Stephen R. Savage, 51, of Milford, Mass., pleaded guilty to three counts of income tax evasion. Prosecutors told the court government evidence showed Savage was the owner of a construction business when he subscribed to several services to hide his income and expenses from the IRS. Savage filed a false federal tax return for calendar year 2002 and failed to file tax returns for 2004 and 2005. He faces up to 5 years in prison and a fine of up to $250,000 on each of the three counts.
Tags: filing false federal tax return, hide income from IRS, income tax evasion, tax evasion
Posted in IRS Tax Cases, IRS Times and Inquirer | No Comments »
Saturday, December 27th, 2008
Californians Zhong Lin, 39; Man Chau Cheng, 37; and Zhong’s sister, Yan Lin Fong, 36, were each sentenced to one year probation for conspiracy to defraud the United States with tax evasion. Zhong was also ordered to pay $140,367 in income taxes owed from tax years 1995 to 2002. The three operated the restaurant Chinatown Buffet in Louisville, Ky.
Tags: Back Taxes, conspiracy to defraud the US, tax evasion, unpaid back taxes
Posted in IRS Tax Cases, IRS Times and Inquirer | No Comments »
Thursday, December 18th, 2008
The former owner of Lucky Chances Casino in Colma, Calif., was sentenced to 15 months in prison and ordered to pay $973,841 in income taxes.
Rene Medina had previously pleaded guilty to tax evasion.
According to the plea agreement, Medina admitted that from July 1999 to June 2007, he was the sole shareholder of Lucky Chances, a casino/card club.
Lucky Chances filed U.S. Income Tax Returns for a Subchapter S Corporation (Form 1120S) with the IRS for the tax years 1999, 2000 and 2001. In filing as a Subchapter S Corporation, Lucky Chances’ income should have been reported on Medina’s personal income tax returns.
Medina also admitted that he evaded payment of his federal income taxes by causing Lucky Chances to make payments for personal expenses and fictitious business expenses in the amount of more than $1 million.
These payments were expensed by Lucky Chances on its books, records and tax returns as ordinary and necessary business expenses. The personal expenses included furniture and redecorating services for his personal residence in Atherton, Calif.
Tags: tax evasion
Posted in IRS Tax Cases, IRS Times and Inquirer | 3 Comments »
