Tag Archive for tax evasion

The Unknown Tax Comic – Part 22

The Unknown Tax Comic 11-20-15

A little humor with some tax jokes on TaxConnections Tax Blogs.

♦ A tax attorney defended a case of tax evasion for an affluent client. He devoted over a year to the case, familiarizing himself with every loophole and angle of current legislation, and made a brilliant argument before the court. His client was called out of town when the jury returned with its verdict, a sweeping victory for his client on every count. Flushed with victory, the lawyer exuberantly sent an email to his client, “Justice has triumphed!” The client immediately emailed back, “Appeal at once!”

♦ “Ignore them and they’ll go away” is great advice for some of life’s annoyances. Unfortunately, it doesn’t apply to taxes. – Martha C. White

♦ I’ll tell you some tax jokes because I think you’d depreciate them! Read more

10 Tax Sins That Could Land You In Jail

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Carelessness on your tax return might get you whacked with a 20% penalty. But that’s nothing compared to the 75% civil penalty for willful tax fraud and possibly facing criminal charges of tax evasion that if convicted could land you in jail.

It’s one thing to make an innocent mistake on your taxes, or to overlook a tax break that could lower what you owe the IRS. While such innocent mistakes will still cost you, they usually won’t invoke the ire of the IRS to pursue criminal prosecution or assess a Civil Fraud Penalty.

When you intentionally disregard tax law, however, such willful neglect will get you in real trouble. The IRS defines “willfulness” as a voluntary, intentional violation of a known Read more

Pistachio Importer Says “Ah Nuts” and Makes Plea Deal for FATCA Violations

handcuffs and gavel

The U.S. government charges an owner of an Iranian pistachio processing and distribution company with operating an unlicensed money transmitting business, failing to disclose foreign bank accounts and filing a false tax return.

In United States of America vs. Ali Amin the government alleged that Ali Amin, who wholly owned and operated Primex International Trading Company Inc. (Pitco), had approved the illegal transfer of approximately $600,000 from Iran to the U.S., and concealed unreported income of about $1.93 million for 2009 through commercial transactions involving the purchase and sale of Pistachios with related parties who transferred funds between each other using an informal network (often known as a Hawala). The Indictment illustrates how the system worked: Read more

Tax Court Finds That IRS Did Not Prove Fraud, Therefore Statute of Limitations Was Closed!

Examining Tax Law

On April 6, 2015, following a trial in Tampa, Florida, the Tax Court ruled that back taxes and penalties imposed upon Mr. Jacoby were unfounded because they had not acted fraudulently in the filing of tax return.

The Court’s ruling overturned the IRS’s assessment of approximately $2 million in back taxes and penalties for positions taken by the taxpayers on their 1999 and 2000 tax returns relating to tax shelters promoted by KPMG and others.

Judge Juan F. Vasquez rules that Steven F. Jacoby, who worked as a licensed securities broker and account executive before starting his own financial strategies company, hadn’t intended to evade tax through concealing, misleading or otherwise preventing the Read more

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

Sovereign’s US Customers Need To Make a Voluntary Disclosure NOW!


We originally posted Court Authorizes IRS to Issue Summonses For Records of U.S. Taxpayers Who Used Sovereign Management & Legal Ltd. to Conceal Offshore Accounts, Assets or Entities  which discussed that on December 19, 2014 the DoJ announced that U.S. District Judge Vernon S. Broderick entered an order on December 18, 2014 authorizing the IRS to issue summonses requiring:

1. Federal Express Corporation, doing business as FedEx Express,
2. FedEx Ground Package System Inc., aka FedEx Ground,
3. DHL Express (DHL),
4. United Parcel Service Inc. (UPS),
5. Western Union Financial Services Inc., Read more

Beware of The Consequences of Avoiding U.S. And Foreign Taxes

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The catch phrase in the movie Jerry McGuire was “Show Me the Money!”

It now looks like prosecutors are adopting the same mantra and are enjoying success in courts indicting those that attempt to hide money and avoid paying taxes either in the U.S. or abroad.

In the past, it was a given that an individual or organization that stayed within the parameters of its country’s tax laws wouldn’t be prosecuted by another country. For example, an expat whose business was abiding by all the laws in France wouldn’t get any flak from the IRS or the U.S. Department of Justice for violations of U.S. laws.

Think of this as “What Happens in Vegas, Stays in Vegas.” Read more

Ex-TigerDirect Executives Charged In $9M Kickback Plot, Get Years In Prison For Fraud

TaxConnections Picture - Cartoon Man In Jail 3-10-15

Gilbert Fiorentino, 54, and Carl Fiorentino, 57, both of Coral Gables, Florida, were sentenced in Federal Court in the Southern District of Florida, in connection with their participation in an illegal scheme to obtain more than $11 million dollars in kickbacks and other benefits, and to conceal this illicit income from the IRS, while employed as senior executives at Systemax, Inc. (“Systemax”) and its subsidiary, TigerDirect, Inc. (“TigerDirect”).

Carl Fiorentino was sentenced to 80 months’ imprisonment. Gilbert Fiorentino was sentenced to 60 months’ imprisonment. A hearing to determine the remaining amount of restitution owed to Systemax by the defendants, who are brothers, has been scheduled for April 3, 2015. Read more

An Unusual But Effective IRS Collection Tool: The Writ Of Ne Exeat Republica


Congress has given the IRS potent tools to collect taxes. The IRS can impose liens on a taxpayer’s property and can seize it through levy, all without prior judicial authorization. But for taxpayers who attempt to move or keep their assets offshore to circumvent IRS collections – beware of the writ of ne exeat republica.

The writ of ne exeat republica effectively prevents a person from leaving the Court’s jurisdiction and the IRS has demonstrated that where its efforts to seize a taxpayer’s property to collect his past due taxes, the IRS essentially seized the taxpayer instead.

Predictably, it takes some fairly serious misbehavior to lead a court to bar someone from traveling – and that is what happened to Charles and Kathleen Barrett of Colorado. Read more

Tools And Tactics That IRS Criminal Investigation Division Uses To Gather Information About You

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A simple mistake, oversight, or your accountant’s malpractice may trigger an IRS criminal investigation. Specifically, unreported income, a false statement, the use of an impermissible accounting or banking service, or declaring too many deductions are things that could initiate an audit, which could then rise to the level of an IRS criminal investigation.

As you can imagine, the IRS Criminal Investigation Division (“CID”) uses a vast array of tools to investigate a suspected tax evasion case or while conducting a criminal investigation. If you think about it, every employee of the IRS has a single task of ensuring that the IRS tax collections are maximized. IRS Special Agents, who work on the criminal tax cases, are no different. If you file your taxes, their goal is to prove that you may have Read more

What’s In Your Wallet? Uncle Sam Wants To Know

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Folks with Panamanian bank accounts may soon be getting some official-looking envelopes in the mail, as the Justice Department recently served John Doe subpoenas on FedEx, DHL, Western Union and a number of other shipping and wire transfer companies. These summonses require the targets to turn over any documents or material relating to their business with Panama-based Sovereign Management and Legal, Ltd.

With typical government bravado, Deputy AG David Hubbert warned that “the world is getting smaller for tax cheats, and we will work with our partners at the IRS to vigorously enforce the nation’s tax laws against those who seek to avoid paying their fair share.” Read more

What Should A Swiss Banker Charged With Offshore Tax Evasion Do In The Wake of Raoul Weil’s Astonishing Acquittal?

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The acquittal of Raoul Weil, the only Swiss banker to have prevailed over the U.S. government in an offshore tax evasion case, has become a source of inspiration for dozens of others who find themselves in a similar situation – indicted and living in Switzerland. As a result, many have become emboldened to come out of the shadows and start fighting.

Let’s set the stage. More than twenty so-called “enablers” are still “at large” overseas. As “fugitives from justice,” they have yet to answer charges leveled by the Department of Justice that they assisted U.S. clients in evading their taxes. Those that have had the misfortune of having their names added to this dreadful list have much to lose by way of reputation. Indeed, they are “professionals” in every sense of the word: bankers, lawyers, and advisers. Read more