What happens to this IRS debt when a person dies?

By Karin Price Mueller

Q. What happens if a person dies owing the IRS and was having payments taken out of his Social Security check? He has no estate and no will. Social Security was notified by the funeral home. He had a live-in girlfriend and was estranged from his children. Who has to pay?

— Not me, I hope

A. In this case, no one.

When someone dies without a will, it’s called dying “intestate.”

Normally, an heir of the deceased would ask a probate judge to put them in charge of the deceased’s estate, said Bernie Kiely, a certified financial planner and certified public accountant with Kiely Capital Management in Morristown.

But you said in your question that the deceased had no estate and the children were estranged.

“There may be no one to stand up and accept responsibility,” Kiely said. “If there are no assets, no one would want to get involved.”

You said the deceased lived with his girlfriend. If they lived in an apartment, then there is no property there, Kiely said. If the deceased owned his home, then there may be some net worth in the home, he said.

“If the deceased died with no assets, then the IRS is out of luck,” Kiely said. “In this country, children do not inherit their parents’ liabilities.”

Full Article & Source:

What happens to this IRS debt when a person dies?

Michigan Owner of Sixteen Adult Foster Care Homes Indicted on Additional Charges Including Obstructing the IRS and Failing to File Tax Returns

PRESS RELEASE:  A federal grand jury sitting in the Eastern District of Michigan returned a superseding indictment today, charging a Grand Blanc, Michigan owner of adult foster care homes with additional tax crimes including obstructing the internal revenue laws and failing to file tax returns, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division.

Jeremiah Cheff was indicted in October 2016 on 60 counts of failing to collect, account for and pay over employment taxes. According to the superseding indictment, Jeremiah Cheff controlled the financial and business operations of 16 foster care homes that cared for individuals with mental illnesses and developmental and physical disabilities, including Hunter’s Home, Nico’s Place, Harmony Manor, Hilltop Estates and Deerwood Manor. It is alleged that from September 2010 through September 2014, Cheff withheld payroll taxes from employees’ paychecks, failed to timely file employment tax returns and failed to pay over the funds withheld to the Internal Revenue Service (IRS).

The new charges allege that Cheff corruptly endeavored to obstruct the internal revenue laws and failed to timely file his 2013 through 2015 individual returns. According to the indictment, after the IRS informed Cheff it intended to file a lien to collect unpaid employment taxes, Cheff sent an $80,000 fake financial instrument to the IRS and falsely claimed to a revenue officer that he had paid the taxes due. Cheff also allegedly spent money from his businesses for personal benefit instead of paying it to the IRS, falsely classified his employees as independent contractors, provided false information to his return preparer and filed false 2013 through 2015 partnership returns for Hunter’s Home.

An indictment merely alleges that crimes have been committed and all defendants are presumed innocent until proven guilty beyond a reasonable doubt.

If convicted, Cheff faces a statutory maximum sentence of five years in prison for each of the 60 employment tax counts, three years in prison for obstructing the IRS and one year in prison for each of the failure to file counts. He also faces a period of supervised release, restitution and monetary penalties.

Acting Deputy Assistant Attorney General Goldberg thanked special agents of IRS-Criminal Investigation, who conducted the investigation, and Trial Attorneys Jeffrey McLellan and Carl F. Brooker IV of the Tax Division, who are prosecuting the case. Acting Deputy Assistant Attorney General Goldberg also thanked the U.S. Attorney’s Office for the Eastern District of Michigan for its substantial assistance.

Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.

Source:
Michigan Owner of Sixteen Adult Foster Care Homes Indicted on Additional Charges Including Obstructing the IRS and Failing to File Tax Returns

Are You a Victim of These Frauds Targeting Seniors?

An IRS impersonation fraud that has victimized thousands of Americans leads a 2017 U.S. Senate ranking of the Top 10 scams targeting senior citizens.

Dubbed by the Treasury Inspector General for Tax Administration as the most pervasive impersonation fraud in IRS history, the swindle involves suspected scammers based in the U.S. and India who telephone Americans and threaten arrests unless purported tax debts aren't paid immediately. At least 1.97 million people have been targeted, with as many as 200 victimized per week during the scam's peak last year, according to the inspector general.

Separately, 1,680 people contacted a toll-free hotline established by the Senate Special Committee on Aging (1-855-303-9470) and reported they were contacted or fleeced by the scam in 2016. The total — more than twice as many as any other complaint — ranked the fraud first in the panel's annual report, ahead of sweepstakes scams, robocalls, elder financial abuse and grandparent scams, the committee reported at a Wednesday hearing.

IRS scam suspects conned victims in at least 21 states
Testifying by video at a committee hearing Wednesday, 81-year-old Phillip Hatch of Portland, Me. said he lost $8,000 to IRS impersonation scammers who threatened "the marshals will be in your house within an hour" unless he paid what they claimed were overdue taxes.

"I was mad — upset that I was taken in," said Hatch. "Just give me five minutes in a room alone with those people and I'd be happy."

Full Article and Source:
Are You a Victim of These Scams Targeting Seniors?

Senator Collins Warns Seniors to Beware New Tactic in the IRS Scam: Ruthless Scammers Are Now Demanding Payment in the Form of Gift Cards

Washington, D.C.—U.S. Senator Susan Collins, the Chairman of the Senate Special Committee on Aging, is warning of a new variation of the pernicious IRS impersonation scam.  According to the U.S. Treasury Inspection General for Tax Administration, iTunes and other gift cards are now the primary form of payment demanded by con artists pretending to be IRS agents.

Scammers telephone victims, impersonate an IRS agent, and demand payment for allegedly unpaid taxes. The callers frequently threaten victims with arrest, foreclosure, or other adverse legal action.

Scammers often instruct their victims to pay using a money wire or prepaid debit card.  In the past several weeks, however, the Inspector General, has learned that IRS impersonation scammers increasingly are demanding payment in the form of iTunes or other gift cards.  Once these con artists have the numbers on the back of the activated gift cards, they can either use the cards for purchases or resell the cards to third parties online.  A recent Portland Press Herald article detailed how a resident of Kennebec County lost $1,000 in iTunes gift cards through a similar impersonation scam.

“This most recent variation of the IRS impersonation scam demonstrates that these fraudsters are relentless in their desire to rob our nation’s seniors of their hard-earned savings,” said Senator Collins.  “Putting a stop to such aggressive and ruthless scams is among my highest priorities as Chairman of the Aging Committee.  Hundreds of seniors in Maine and across the country have contacted the Committee’s Fraud Hotline to report that they have received these calls.”

With such scams reaching epidemic proportions across the country, the IRS has released several tips to help taxpayers identify suspicious calls that may be part of a scam:

    The IRS will never call a taxpayer to demand immediate payment, nor will the agency call about taxes owed without first having mailed a letter to the taxpayer.
    The IRS will never demand that a taxpayer pay taxes without giving him or her the opportunity to question or appeal the amount claimed to be owed.

    The IRS will never ask for a credit, debit, or gift card number over the phone.

    The IRS will never threaten to send local police or other law enforcement to have a taxpayer arrested.

    The IRS will never require a taxpayer to use a specific payment method for taxes, such as a prepaid debit card or gift card.

Last year, Senator Collins chaired a hearing at which the Inspector General testified that this scam was “the largest, most pervasive impersonation scam in the history of the IRS.”  Senator Collins advises seniors to simply hang up the phone if they receive an unexpected call from someone claiming to be from the IRS.  In addition, complaints can be made to TIGTA (1-800-366-4484), the FTC (1-877-382-4357), or to the Senate Aging Committee’s Fraud Hotline (1-855-303-9470).

According to the Government Accountability Office, seniors lose an estimated $2.9 billion to financial exploitation and fraud every year.  Earlier this year, Senator Collins unveiled a comprehensive anti-fraud resource guide titled, “Fighting Fraud: U.S. Senate Aging Committee Identifies Top 10 Scams Targeting Our Nation’s Seniors.”  The IRS imposter phone scam was listed as the #1 most prevalent fraud. 

Full Article & Source:
Senator Collins Warns Seniors to Beware New Tactic in the IRS Scam: Ruthless Scammers Are Now Demanding Payment in the Form of Gift Cards

Tax Judge Finds Elder Abuse, Fraud

Using lies, deceit and abuse, a caretaker bilked an elderly Gilroy man out of nearly $1 million over two years and forced him to live in filth while she enjoyed a lavish lifestyle, then filed fraudulent income tax returns, a U.S. Ttax Ccourt judge ruled.

In an understated but scathing decision on April 21, Judge Mark Holmes opined that Angelina Alhadi, a nursing assistant at St. Louise Regional Hospital in Gilroy and a private caregiver, used undue influence and elder abuse to inveigle $451,891 in 2007 and $474,983 in 2008 from Arthur Marsh, who died in February 2009 at the age of 93.

The retired optometrist and award-winning oil painter at the time suffered from dementia and a host of physical ailments and became so emotionally dependent on Alhadi that he paid her nearly twice the going rate for her services and wrote her numerous large checks, typically at her insistence, according to the 37-page decision.

Among other things, there was money paid for a $100,000 down payment on a Gilroy home, a $60,000 pool and a $25,000 cruise for her family. Marsh was forced to go on the foreign cruise but was often neglected while Alhadi and her family partied, according to the court filing.

The decision was rendered under Rule 155 of the tax code. That means Alhadi and the Internal Revenue Service, which brought the case to tax court, must now meet and reach a settlement of the unpaid tax debt.

They have until June 21 to submit computations and positions for Holmes’ consideration and final decision.

After Marsh’s death, the Santa Clara County District Attorney investigated Alhadi’s involvement in his life but no charges were filed.

County and state guardians and senior welfare agencies also investigated and gave testimony to the Internal Revenue Service.

The IRS acted on the tax aspects of the case, alleging the woman failed to report income and filed false tax returns.

It’s unclear if Judge Holmes’ findings of elder abuse will trigger another probe into Alhadi’s conduct and the circumstances of Marsh’s death.

Alhadi claimed in her defense that the money represented nontaxable loans or gifts, but the IRS argued it was taxable income, and she should pay a penalty for committing fraud, because the funds were taken while Marsh was under “undue influence” and was being subjected to elder abuse, according to the court findings.

In deciding the case, Holmes noted Marsh came from humble beginnings and grew up during the Depression. After a successful optometry practice that served three generations, Marsh, who had never married and was known as Art to his friends at St. Mary Church and Gilroy Rotary, retired to his 800-square-foot, second-story apartment on Carmel St.

Holmes observed that the poverty of his life “…marked him for life and made him frugal. He rented his little apartment for $175 a month and got by largely on Social Security. But Dr. Marsh had been a good businessman, saving over $1 million before he retired in the ’80s and investing it prudently well into retirement until it reached nearly $3 million.”

And when he became ill and infirm and his mental faculties began to fail, he became a prime target for the kinds of people who pry on the elderly, said James Simoni, the Gilroy attorney specializing in senior law who handled Marsh’s affairs and tried unsuccessfully to stop Alhadi.

In 2000, Marsh had a fall that broke his hip and required hospitalization. It was while in the hospital that doctors noticed his decline, which then worsened.

Judge Holmes wrote, “In 2007, when he was 91, things grew still worse. He couldn’t drive a car, he couldn’t go to the doctor, and he could no longer even prepare his own food. He suffered from incontinence, atrial fibrillation, congestive heart failure, hypertension, chronic back pain, arthritis, hearing loss in both ears, and deteriorating vision; then he suffered a stroke in the right frontal lobe of his brain.

“His physician, Dr. George Green, diagnosed him with dementia and cognitive decline. These neurological problems showed themselves in Dr. Marsh’s poor short-term memory, diminished long-term memory, inability to perform simple arithmetic, and persistent deficiencies in visuospatial analysis. These problems also made him vulnerable…”

By that time, Marsh had hired Alhadi and soon was paying her almost double the normal rates for her caregiver services even though, according to the court decision, she ignored his most basic care and pressured him to pay her more and give her large checks for personal things.

The court document describes his tiny apartment as messy and filthy, relates Alhadi’s deliberate and successful measures to isolate Marsh from his nearest relative, by cutting off all phone contact with the niece, and her attempt to wrest from him legal control of his assets.

The Holmes decision relates testimony from the niece, Sheila Person, about the scene during her uncle’s funeral at St. Mary Church in Gilroy.

“Alhadi, dressed in full hijab and carrying a single red rose, tried ‘to crawl in the coffin or get inside there and she was screaming.’

“This was the last contact Ms. Alhadi had with Dr. Marsh,” Holmes wrote.

Simoni said when he became aware of a possible problem when his client asked him to authorize several very large checks for Alhadi including, three months before his death, an huge advance payment to care for him for the rest of his life.

He brought his concerns to Marsh’s financial fund managers who refused to release the money, he said Monday.

Judge Holmes wrote: “Ms. Alhadi made a last lunge for Dr. Marsh’s money. She took him to see an estate attorney, James Simoni, in November 2008 to have Dr. Marsh grant her a power of attorney.
Mr. Simoni, whom we also find a credible witness, testified that he learned about the blocked Vanguard accounts and supposed promise by Dr. Marsh to Ms. Alhadi to pay her approximately $300,000 in exchange for taking care of him for the rest of his life. We find that this trip to his office was a ploy by Ms. Alhadi to get those accounts unblocked and to get her hands on the last few $100,000 checks that Dr. Marsh had written. Dr. Marsh later told Mr. Simoni that Ms. Alhadi was pressuring him to get named in his will, and that he needed to create a separate trust for her so that his family members wouldn’t be able to interfere. Mr. Simoni refused to be part of this, and even tried to convince Ms. Alhadi to return the money she had already received. She told him: “Why should I, he gave it to me.’” The tax court decision can be read online here: http://1.usa.gov/1SewClv.
-30-

Full Article & Source:
Tax Judge Finds Elder Abuse, Fraud

Guardianships: A Broken Trust: Judge's History of Debt, Foreclosures, IRS Liens

Judge Colin,  Elizabeth Savitt's husband

[Judge] Colin and [Elizabeth] Savitt are positioned as the power couple of the lucrative probate arena. Colin’s financial history, however, is littered with debt, including suits for foreclosure on three properties and $65,000 once owed to the IRS for back taxes.

Savitt also had a recent foreclosure on a property. The couple’s financial problems appear to have eased since she became a professional guardian.

Elizabeth Savitt, Judge Colin's wife

Financial records show Savitt’s finances are mainly separate from the judge’s, but it appears the couple has co-mingled finances at least somewhat, West Palm Beach accountant Richard Rampell said. He pointed to a co-signed $30,000 loan from Helen Rich, a Wrigley chewing gum heiress who was a former client of Colin’s when he practiced as a divorce lawyer.

And even with couples who keep their finances separate, there is bound to be overlap, Rampell said.

“It’s very common, especially if one makes more money than other. And even if they say they don’t, they often do,” Rampell.

Full Article and Source:
Guardianships:  A Broken Trust:  Judge's History of Debt, Foreclosures, IRS Liens

IRS rethinks rules for savings accounts to care for young people with disabilities

The tax-advantaged savings accounts that Congress approved late last year to cover costs of caring for young individuals with disabilities are a step closer to being available.

The Internal Revenue Service on Friday issued changes to the proposed rules for how states can offer and operate these 529 Achieving a Better Life Experience (ABLE) accounts.

Congress approved legislation last December that allowed states to offer these accounts for people who became disabled before the age of 26.

But it was up to the IRS to approve the details of how these accounts, similar to 529 college savings plans, will work.

NO SOCIAL SECURITY NUMBERS
The latest guidelines said states mostly would not have to collect taxpayer Social Security numbers from those who contribute to such an account. It also said those who apply for an account won't have to submit physician documentation showing a disability diagnosis, the IRS wrote in a notice Friday.

“These are important issues for an administrator,” said Andrea Feirstein, president of AKF Consulting.

Two states, Nebraska and Ohio, have begun soliciting possible service providers even though the IRS rules haven't been finalized. More than 40 states have initiated or approved legislation to facilitate the accounts, Ms. Feirstein said.

FIRST OR SECOND QUARTER
It will likely be the first or second quarter of 2016 before any state is making the accounts available, she said.

Under the law, individuals can contribute up to $14,000 — the current annual gift exclusion amount — in a given taxable year into an ABLE account.

Account holders could take distributions, provided they are for the beneficiary's disability expenses, and those amounts would not be include in gross income for tax purposes.

One of the biggest benefits of the ABLE account is that the money held there is exempt from the $2,000 limit on personal assets for individuals who wish to qualify for public benefits. Generally, a disabled person with more than that amount is ineligible for Medicaid and Supplemental Security Income benefits.

Full Article & Source:
IRS rethinks rules for savings accounts to care for young people with disabilities

Former Martin County (Indiana) Judge Pleads Guilty in Tax Case

A former judge in Martin County is facing a year in jail and a $100,000 fine for failing to pay $66,000 in tax debt.

Josh J. Minkler, Acting United States Attorney, announced Robert Joseph Howell, 51, pleaded guilty to failing to file his federal income tax returns for 2012.

He was found guilty today before U.S. District Chief Judge Richard L. Young.

Howell, operated Howell Law Firm PC in Loogootee, performing legal services. In 2012, the firm had gross receipts of approximately $450,000, including a $300,000 fee he received from a wrongful death insurance settlement.

Howell’s return preparer initially filed an extension for the 2012 tax year which expired in October 2013. When the accounting firm sent Howell an invoice, he chose not to pay the invoice or his owed taxes. He failed to file business or personal returns in 2012, resulting in a tax debt of over $66,000.

According to testimony in court, over $265,000 was withdrawn from his personal and business accounts at casinos in Evansville and French Lick.

R. Joseph Howell

Howell formerly served as a circuit court judge and prosecutor in Martin County.

Minkler stated, “taxes are a fundamental responsibility we all owe to help maintain infrastructure, schools and public safety services. When someone willfully neglects that responsibility, they will be held accountable.”

This case was investigated by the Internal Revenue Service, Criminal Investigation.

According to Assistant United States Attorney James M. Warden, who prosecuted the case for the government, Howell faces up to one year in prison, a fine up to $100,000, and must pay full restitution to the IRS.

Sentencing is scheduled for May 11, 2015, in Evansville.

Source:
Former Martin County Judge Pleads Guilty in Tax Case

NJ: County GOP Chairman Allegedly Defrauds Elderly Patient in Rehabilitation Center.

The chairman of the Cumberland County Regular Republican Organization has been arrested on charges he took $149,000 from an elderly patient at his Cape May County rehabilitation center to pay for business and personal expenses, according to a report in The Daily Journal.

Robert V. Greco Jr., 51, of Vineland was charged with theft by failure to make required disposition, according to the Cape May County Prosecutor’s Office.

Greco convinced an elderly patient at his East Creek Manor Rehabilitation Center, in Eldora, to sign a power of attorney document giving Greco control of the victim’s finances, authorities alleged.

Prosecutor Robert L. Taylor said Greco then took out more than $149,000 from the patient’s financial accounts.

The arrest followed a four-month investigation, the prosecutor’s office said.

Greco was set at $35,000 bail. He is not listed as an inmate at the Cape May County Jail.

The charges against Greco carry a possible sentence for five to 10 years.

Greco has served as the Cumberland County GOP chairman since February 2009.

Greco has a prior arrest record, which Democrats tried to make a campaign issue during the 2010 election season. He was arrested in 2003 in Cape May County on charges related to an alleged domestic violence incident. Greco was indicted on eight charges, including unlawful possession of a rifle, aggravated assault and abuse of a child. In 2004, he entered a plea of guilty to a charge of threat to kill and was sentenced to three years’ probation, a psychological evaluation and an anger management course; the other charges were dismissed.

"I was shocked to learn about the alleged actions of Bob Greco as reported in the press today," said U.S. Rep. Frank Lobiondo in a statement. "Due to the seriousness of the charges, it is only appropriate that Bob resign his chairmanship of the Cumberland County Regular Republican Organization."

Full Article and Source:
UPDATE: Cumberland County GOP Chairman Allegedly Defrauds Elderly Patient in Rehabilitation Center

Family Court Lawyer Sentenced To Prison

WILKES-BARRE — A former family court lawyer in Lackawanna County was sentenced Wednesday morning in federal court in Wilkes-Barre.

Danielle Ross was sentenced to 12 months in prison and must pay restitution of about $63,000.

In December 2013, she pleaded guilty to attempted tax evasion.

The former family court lawyer from Lackawanna County who pleaded guilty to federal tax charges will now spend a year behind bars.

She was greeted at federal court in Wilkes-Barre by protesters.

Danielle Ross of Jermyn was a guardian ad litem – an attorney for family court – in Lackawanna County until last year. That’s when federal prosecutors filed tax charges against her.

She’s now going to prison and owes tens of thousands of dollars in unpaid taxes.

Full Article & Source:
Family Court Lawyer Sentenced To Prison
See Also:
Former PA Guardian ad Litem, Danielle Ross, Pleads Guilty to Tax Charge

Judicial Candidate Faces Possible Discipline For Professional Misconduct

Threat to use IRS

 A San Diego lawyer running for Superior Court judge faces disciplinary action after a judge found that he threatened to report someone to the Internal Revenue Service to get settlement talks going in a civil case.

 The State Bar Court of California has found that Douglas J. Crawford threatened to report the opposing side in a civil dispute to the IRS to trigger an audit.

In September 2010, attorney Douglas J. Crawford sent an email to lawyers for Kearny Mesa Towing and Crusader Insurance. Crawford had filed lawsuits on behalf of a client against the companies and several individuals.

Crawford told the lawyers it was apparent one of their clients had under-reported income to the IRS for several years. He gave the attorneys a deadline to start "mature, reasonable settlement negotiations" or Crawford’s client would report the matter to the IRS.

“The legal system is undermined by making threats,” wrote Judge Richard Honn of the State Bar Court of California. He found Crawford culpable of one count of misconduct.

“Incivility and scorched-earth tactics jam the judicial system, are costly to parties in both time and treasure and tarnish the image of all lawyers, not just those who engage in them,” Honn wrote.

Full Article & Source:
Judicial Candidate Faces Possible Discipline For Professional Misconduct

State Investigating Ohio Probate Judge Mark Belinky

A Mahoning County judge is the subject of an investigation.

The Ohio Bureau of Criminal Investigation tells 21 News that two search warrants were issued in the city Friday for electronic and paper files.
 

One search warrant was executed at Mahoning County Probate Judge Mark Belinky's office at the Mahoning County Court House on Friday.   The other warrant was served at Belinky's home in Boardman Township.

 

Agents from the Ohio Attorney General's Bureau of Criminal Investigation and Identification, the FBI and the Mahoning County Sheriff's Office assisted in the searches.
 

Judge Belinky did return a call to 21 News and issued a statement saying, "On the advice of counsel I will only say that since my election, I have faithfully discharged my duties as Judge of the Mahoning County Probate Court."
 

Judge Belinky has had financial problems in the past.  Three years ago the Internal Revenue Service filed a lien against Belinky's home, stating he owed more than $32,000 in federal income taxes.  Last year, Judge Belinky was taken to court by a Florida man over a $20,000 debt.

 

The Judge has not been charged with any crime.

 

Full Article and Source:
State Investigating Mahong County Judge

Former estate-planning lawyer faces federal charges in claimed $3M client theft case

A former Pennsylvania estate-planning lawyer is facing a federal wire fraud and money-laundering case, accused of bilking eight clients of over $3 million between 2007 and 2013.

Prosecutors say Wendy Weikal-Beauchat, 46, used fake certificates of deposit and IRS 1099 interest-reporting forms to cover up the claimed thefts, the Gettysburg Evening Sun reports.

Weikal-Beauchat was disbarred by consent earlier this year.

Full Article and Source:
Former estate-planning lawyer faces federal charges in claimed $3M client theft case

CPA Disbarred for Stealing from Daughter’s Trust Fund

The Internal Revenue Service said Tuesday that its Office of Professional Responsibility has prevailed in seeking the disbarment of David O. Christensen after he was convicted of theft for misappropriating funds as the conservator of his daughter’s trust account.

Christensen’s CPA licenses in Washington and Oregon had been revoked previously as a result of his conviction.

In a final agency decision, the IRS administrative law judge declined to grant a request by Christensen to continue in a limited practice as a tax return preparer, and instead, disbarred him from all practice before the IRS. The judge found that Christensen’s conviction for theft, along with the revocation of his CPA licenses, constituted disreputable conduct under Circular 230.  Christensen had argued that he should be permitted to continue to prepare tax returns because his theft conviction resulted from a family matter that had nothing to do with his tax preparation practice before the IRS.

“OPR strives to protect the integrity of the tax system from unscrupulous and incompetent practitioners regardless of how those traits become known,” said OPR director Karen L. Hawkins in a statement.

Agreeing with OPR’s proposed sanction, the administrative law judge held that the seriousness of Christensen’s offense warranted disbarment from practicing before the IRS finding, that the “respondent has displayed a lack of integrity, including in his testimony at trial, in attempting to distinguish his professional actions from his ‘father-daughter’ relationship.”

Christensen is therefore prohibited from any practice, including tax preparation, before the IRS for a five-year period.

Full Article and Source:
CPA Disbarred for Stealing from Daughter’s Trust Fund

Worse Than Paying Taxes? Paying Someone Else's---And IRS Can Make You Do It

Can the IRS collect someone else’s taxes from you? In some cases, yes, where you end up with assets or money from that person. You may have a right to the assets or money, but the IRS trumps you. The IRS calls it transferee liability and says ‘show me the money.’

Take Joseph L. Mangiardi, who died in 2000. Lots of money was spent on lawyers in this mess. I noted earlier court cases in this same tax kerfuffle here: Paying Taxes Pennies On The Dollar. Mangiardi’s daughter Maureen was co-executor of her dad’s estate. When she filed the estate tax return in 2001, the tax due totaled about $2.5M.

The estate was mostly stock and a retirement account, but there was plenty of value so there should have been no problem. Stock prices were low, so it made sense to let them rebound before selling. The estate asked for time and the IRS said sure. The IRS and heirs would both do fine.

You can guess what happened. Instead of waiting for stock prices to rebound, the executors must have thought they were Gordon Gekko. They engaged in active trading of securities, buying and selling. Unfortunately, they weren’t Gordon Gekko and lost money. That was bad enough.

But like Gordon Gekko, the executors were paying themselves hundreds of thousands of dollars in fees. The IRS got pretty annoyed. The IRS first went after the estate but found it was insolvent. Meanwhile, the tax debt had ballooned to over $3 million. See U.S. v. Mangiardi.

Full Article and Source:
Worse Than Paying Taxes? Paying Someone Else's---And IRS Can Make You Do It

Colorado Lawyer Indicted on Charges of Defrauding the IRS

A Denver-area lawyer has been indicted for allegedly defrauding the Internal Revenue Service, the U.S. Attorney's Office in Denver said Monday.

According to the indictment, the lawyer, Eva Melissa Sugar, 59, worked with Financial Fortress Associates, an organization that the government said promoted and advised clients on schemes to avoid the payment of income and other federal taxes.

Sugar, of Aurora, is self-employed and specializes in tax and other legal matters in Denver.

The indictment accuses Sugar and others of conspiring to defraud the United States for "the purpose of impeding, impairing, obstructing, and defeating" the "lawful functions" of the IRS.

Full Article and Source:
Denver Area Lawyer Indicted on Charges She Defrauded the IRS

Registered Nurse and Disbarred Attorney Charged with Stealing More Than $2 Million from Elderly Woman’s Estate

ANCHORAGE February 28, 2013 — U.S. Attorney Karen L. Loeffler announced today that a registered nurse, formerly of Anchorage, and a recently disbarred California attorney were indicted by the federal grand jury in Anchorage, Alaska, of devising a scheme to obtain in excess of $2 million between May 2007 and August 2009 from the Trusts of Juanita Gielarwoski, now deceased.

Brian Ben-Israel, 53, of Duluth, Georgia, and Philip Eric Myers, 60, of Santa Barbara, California, were charged by the federal grand jury with one count of mail fraud and three counts of wire fraud. Ben-Israel was also charged with three counts of filing false tax returns.

According to the indictment, in 2006, Ben-Israel was a registered nurse residing in Anchorage and working at Meridian Psychiatric Consulting Group. Ben-Israel met and befriended Gielarowski and her daughter, who were both patients of Meridian Psychiatric Consulting Group; Ben-Israel became a health care provider and “financial advisor” to both. Myers, an attorney licensed at the time in the state of California, was versed in trust and estate matters. From at least 2004, Ben-Israel was a business partner and friend of Myers; Ben-Israel introduced Myers to Gielarowski and her daughter.

Full Article & Source:
Registered Nurse and Disbarred Attorney Charged with Stealing More Than $2 Million from Elderly Woman’s Estate

PA Attorney Accused of Federal Tax Fraud Pleads Not Guilty

A court-appointed attorney accused of federal tax fraud showed up in court and pleaded not guilty on Friday.

Danielle Ross is currently suspended from her job as the attorney who represents the interests of children in Lackawanna County family court.

Earlier this week, Ross was indicted on federal tax charges.

Ross and her attorney said they will fight the federal charges of tax evasion and filing false income tax returns.

She was suspended from her position of guardian ad litem in Lackawanna County court.

Guardian ad litem represents the interests of children in court in custody and visitation hearings.

Ross has worked on hundreds of those cases and some of the families were in court Friday. They claimed that Ross’s claims were biased and not based on facts and her billing was excessive.

Ross is facing charges that she did not pay taxes on the billings above her base salary.

Full Article and Source:
Attorney Accused of Federal Tax Fraud Pleads Not Guilty

See Also:
PA Lawyer Indicted for Tax Evasion

PA Lawyer Indicted for Tax Evasion

A federal grand jury indicted the legal advocate for children in Lackawanna County, Pennsylvania on charges of tax evasion and filing two false federal income tax returns stemming from her failure to report payments she received from parents.

Attorney Danielle Ross, who was appointed by the court to represent children in parent custody disputes since 2008, did not disclose to the IRS any of the income from the payments she received from parents in 2009 and 2010, according to the four-count indictment handed up in Scranton on Tuesday.

Full Article and Source:
Pennsylvania Lawyer Indicted for Tax Evasion

CA: Santa Monica Attorney Sentenced to Three Years in Prison

A Santa Monica attorney was sentenced Monday to three years in prison and ordered to pay more than $2 million in restitution for schemes to evade taxes and misappropriate client fees, according to the IRS, which investigated the case.

Robert M.L. Baker III, who owns a law firm on 20th Street and Wilshire Boulevard, also was sentenced to three years of supervised release following imprisonment.

Baker, 46, pleaded guilty in January to “willfully subscribing and filing false tax returns in a conspiracy to commit tax fraud,” said IRS Special Agent Felicia McCain.

According to the plea agreement, Baker admitted that he “along with others devised a scheme to misappropriate client fees and settlements in order to evade payment of his tax obligations,” McCain said.

Judge Otis D. Wright ordered Baker to pay $1,140,879 in restitution to the IRS and $916,000 in restitution to a victim.

Full Article and Source:
Santa Monica Attorney Sentenced to Three Years in Prison