When Clients Testify Against Their Tax Preparer

When Clients Testify Against Their Tax Preparer

The IRS has been focusing on examinations of tax return preparers. These examinations often result in the imposition of civil penalties under Section 6694 and 6695. But they can also result in criminal liability for the tax return preparer. The criminal sentencing guidelines can be problematic for tax return preparers. The Keleta v. United States,…

Reliance on an Attorney as a Defense to a Tax Crime

Reliance On An Attorney As A Defense To A Tax Crime

Reliance on advice of a tax attorney or CPA is a defense to some tax crimes. But what if a taxpayer merely consults with a tax attorney or CPA and does not actually rely on their advice? The recent United States v. Wright, No. 18-4087 (6th Cir. 2019) case addresses whether this defense is available…

Cashing a Tax Refund Check for a False Return is a Crime

Reporting Debt Discharged In A Court Settlement To The Irs

Cashing a tax refund check that was triggered by filing a false tax return is a crime. It is theft of government money. Theft of government money is different than tax evasion. The recent United States v. Box, No. 18-13935 (11th Cir. 2019) court case provides an opportunity to consider the crime of theft of…

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Categorized as Tax Crimes

Return Preparer Liable for Returns She Didn’t Prepare

Tax Litigation When The Administrative Process Failed

The IRS has been increasing its focus on tax return preparers who file false or fraudulent tax returns. Congress recently beefed up the due diligence requirements preparers have to comply with and the penalty amounts have also been increased. But these laws only apply to tax returns the preparer actually prepared. In Tolentino v. United…

Use of Accounting Board Order in Criminal Tax Case

Use Of Accounting Board Order In Criminal Tax Case

If an accountant is disciplined by the accounting board, can the discipline be used to increase his criminal sentence for tax fraud when the accounting board’s discipline did not prohibit or address fraud? The court addressed this in United States v. Iley, No. 17-1269 (10th Cir. 2019). Facts & Procedural History The defendant was a…

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Categorized as Tax Crimes

Statements Made to IRS Special Agents

Can Defective Deed Defeat Irs Estate Tax Lien?

If you are contacted by an IRS special agent for an informal meeting, can statements made during the meeting be used against you in court? The answer is “maybe.” The court addresses this in United States v. Henry, No. 2017-0001 (D. VI 2018). Facts & Procedural History The IRS criminal investigation unit received a tip…

Do Criminal Convictions Deter Employment Tax Crimes?

Subchapter S Corporation Losses Limited By Tax Basis

Failing to pay taxes to the government is a crime. This includes failing to pay employment taxes withheld by employers from employee wages. The Treasury Inspector General for Tax Administration (“TIGTA”) just released a report suggesting that the government has failed to enforce employment tax crimes. The report argues that the IRS’s lax enforcement results…

Tax Refund Fraud Committed by Prisoners

Courts Says No Criminal Fraud, Irs Imposes Civil Fraud Penalty

The government has limited resources available to detect and prosecute tax fraud. Fraudulent tax refund schemes by prisoners continue to present a compliance burden for the IRS. The United States v. Turturro, 06-12033 (11th Cir. 2007) case provides a good example of this type of fraudulent scheme. Facts & Procedural History Turturro was in prison…

Tax Evasion Twist

Payroll Taxes: The Single Member Llc Owner (again)

One way to avoid a tax evasion conviction is to show that the underlying tax is not owed. The recent United States v. Kayser case provides a slightly different twist on this defense. The Court Sets Out The Following Facts From November 1998 to May 2000, A2Z USA, Inc. employed Kayser first as a salesperson…

Tax Attorney Gets Taxpayer Favorable Sentence, Court Says Not So Fast

What Is A “foreign Country” For Income Tax Purposes?

Tax fraud often results in harsh criminal tax penalties; however, you really never know what a particular tax crime sentence will be until you have your day in court, then the appeals for that sentence, and then possibly the appeals for those appeals. Take for example the case of United States v. Trupin. According to…