Tag Archive for Tax Crimes

Facing The Music

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When I was a young, fresh-faced criminal defense attorney, there was an aged judge on one of the local benches. Courthouse rumor persisted that this gentleman, whose name I cannot recall, was a finalist to serve as Alf Landon’s running mate in 1936. The judge would occasionally say that his particular fiefdom should be called “County Dumb Court” instead of “County Criminal Court.” While his rhetoric was a bit overblown, at least in my humble opinion, his underlying point was valid. Almost all the defendants who approached the bench were there not because they had done something malicious, but because they had made a poor decision under pressure, misunderstood the law or been trapped on a technicality.

In a way, tax court is much the same. The petitioners are certainly not “dumb” in any way, Read more

DOJ Continues To Prosecute Offshore Bankers Who Have Aided Taxpayers To Avoid US Taxes!

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Bloomberg News reports that federal prosecutors in Manhattan filed an expanded indictment Wednesday against former Wegelin & Co. bankers Roger Keller, Urs Frei and Michael Berlinka.

On Wednesday, August 28, 2013 we posted U.S. Turns Up The Pressure On Swiss Banks! where we discussed that thousands of Swiss bank workers have seen their data handed over to justice authorities in the United States and are now living with a considerable amount of uncertainty.

Now three Swiss bankers accused in 2012 of helping Americans hide more than $1.2 billion from the U.S. Internal Revenue Service face new charges of obstructing the Read more

Man Convicted of Threatening To Assault And Kill IRS Agent And Torture The Agent’s Family Over Audit Proceedings

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While death and taxes are always certain, take lesson from Andrew A. Calcione that you should never mix them together.

In May 2014, a federal judge found 49-year-old Andrew A. Calcione of Cranston, Rhode Island, guilty of threatening to assault an IRS Revenue Agent, rape and kill the agent’s wife and injure the agent’s daughter while the agent watched before murdering the agent. The reason? Mr. Calcione didn’t want to pay his tax bill of $330,000.

According to government testimony as reported in United States of America v. Andrew A. Calcione, U.S. District Court for the District of Rhode Island (Providence County), Case No. 1:13-mj-00291-LDA, Mr. Calcione was selected for audit for the years 2008, 2009 Read more

Walking The Sawdust Trail

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Those who responded to the altar call after one of Billy Sunday’s sermons (see video below) were said to walk the sawdust trail, because the temporary venues he preached in back in the 1910s and 1920s often had sawdust on the floor as a deodorizer.

Before he became a travelling evangelist, and possibly even before he became a Christian, depending on what source you believe, Mr. Sunday played eight seasons of Major League Baseball between 1883 and 1890. During that time, he roamed the outfield for the Chicago White Stockings, Pittsburgh Alleghenys and Philadelphia Phillies. Mr. Sunday left the game with a lifetime .248 batting average, which was pretty good for the pre-modern era. He was also a speedy player who finished in the top ten in stolen bases three times and led the league in outfield putouts in 1888. Read more

Is the Justification for the United States’ System of Worldwide Taxation A Hoax? – Part II

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In Part I, I argued that the benefits rationale – in terms of the public benefits received by citizens – was an unpersuasive justification for the U.S.’s system of worldwide taxation.

I continue my rant in Part II, examining the practical effects of worldwide taxation on non-resident U.S. citizens. Through a labyrinth of “credits, deductions, exclusions, and non-deductibility,” the Internal Revenue Code treats similarly situated U.S. citizens who live abroad differently. How so? Such persons pay different U.S. taxes depending upon the types and amounts of the taxes imposed by the countries in which they live.

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How To Avoid Becoming The Next “Cooked Goose” Gracing The IRS’s Offshore Tax Evasion Table This Thanksgiving – Part III

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III. Shorthand Formula for a Criminal Offshore Bank Account Tax Case

At the end of the day, an offshore account tax fraud case comes down to proving two key elements:

(1) A substantial tax deficiency, and

(2) Badges of fraud (i.e., acts of concealment concerning the non-reporting of the offshore bank account).

The larger the tax deficiency and the more badges of fraud it can prove, the stronger the government’s case becomes. Read more

How To Avoid Becoming The Next “Cooked Goose” Gracing The IRS’s Offshore Tax Evasion Table This Thanksgiving – Part II

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II. Essential Elements of Tax Crimes

a. Willfulness

One small word is all that distinguishes a civil tax matter from a criminal tax matter. That pestilent word is called “willfulness.” It is the cornerstone to any criminal tax matter.

In the criminal setting, the government carries the heavy burden of proving – beyond a reasonable doubt – that the taxpayer acted willfully. Willfulness is defined as an “intentional violation of a known legal duty.”

i. Proving Willfulness For Purposes of the Crime of Failure to File a FBAR Read more

How To Avoid Becoming The Next “Cooked Goose” Gracing The IRS’s Offshore Tax Evasion Table This Thanksgiving – Part I

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If your name was mentioned in the same sentence as Raoul Weil, Carl Zwerner, or Ty Warner, you can rest assured that you haven’t been nominated for an academy award or a Pulitzer Prize. Nor did you win the Publisher’s Clearinghouse Award. Instead, you’d have joined a disgraced group of taxpayers who have had the misfortune of being targeted by the U.S. government in their crusade to stamp out offshore tax evasion.

In stark comparison is John Doe, a conflicted taxpayer who recently entered the Offshore Voluntary Disclosure Program (OVDP). Neighbors and friends who run into John are a captive audience for him as he wallows in his self-pity. John regrets the decision to enter OVDP and tells his tale of woe to anyone who will listen: “I don’t know what I’m doing in this program. I know 500 people with foreign accounts like mine, and they’re not coming Read more

Tax Court Affirms Net-Worth Method Used to Support Fraud Determination Against Surf Shop Owners

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If you think that by keeping sloppy records, the IRS cannot determine how much income you earned – think again.

The Worth family, Donald, Marie, and their son, Frank, operated a chain of seven surf and skateboard shops across California, called White Sands. Their business was selected for audit by the IRS. In the course of the audit the IRS learned that Frank was responsible for about half of the stores and Donald and Marie operated the other half. Marie also managed the books and prepared tax returns. As manager of the heavily cash-based business, Frank had the authority to write checks on certain White Sands bank accounts, wrote checks or used cash to pay vendors for merchandise as it came in, and wrote checks to reimburse himself for business expenses he paid. Frank also supervised Read more

What You Need To Know About Tax Evasion

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The most common federal tax crime is tax evasion, which is specifically defined in 26 U.S.C. § 7201 as a failure to report taxes, reporting taxes inaccurately, or failing to pay taxes. To establish a case for tax evasion under section 7201 of the Internal Revenue Code (IRC), the government must prove each of the following beyond a reasonable doubt: that the taxpayer attempted to evade or defeat a tax or payment of a tax; an additional tax was due and owing; and the taxpayer acted willfully. If the IRS proves its case for tax evasion against a taxpayer, the penalty can be significant including monetary fines and jail time.

Who Can Be Prosecuted for Tax Evasion?

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What Does The Raoul Weil Case Mean To You?

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Iconic mobster Al Capone died in prison after he was convicted of tax evasion. More recently, after the notorious Lufthansa robbery that was immortalized in 1990’s Goodfellas, Jimmy the Gent went to prison not for his alleged role in the robbery but for a point-shaving scandal involving the Boston College basketball team. It could be that crime syndicate figures portrayed by actor Robert De Niro have a certain susceptibility to financial crimes prosecutions, or there could be something else at work.

Tax evasion and other financial crimes in New Jersey are often substitute prosecutions. Traditionally, tax evasion has been easy to prove: there are accurate and timely returns on file, or there are not. “You want to put a murderer in jail for not paying his taxes?” asked a befuddled Elliot Ness in the De Palma version of The Untouchables. Read more

Chicago Lawyer with Portfolio of Celebrity Clients Indicted On Charges of Tax Fraud

Examining Tax Law

Gary Stern is the latest professional to become ensnared in the coils of the criminal justice system. The once prominent lawyer who represented NFL players, doctors, lawyers, and other professionals has been charged with tax fraud. Federal prosecutors allege that Stern organized, operated, and promoted elaborate and bogus tax schemes, primarily to help his wealthy clients evade federal income taxes. For as complicated a strategy as these tax schemes might have been, they can be reduced to something so simple that even a caveman could do it: claiming millions of dollars in tax credits.

Specifically, the charges relate to preparing fraudulent tax returns and impeding the operation of the IRS. A federal indictment filed Tuesday in U.S. District Court in Chicago alleges that from 2006 to 2010, Gary J. Stern, “corruptly obstructed and impeded” the IRS Read more