Still Have Un-Reported Swiss Bank Accounts? Do you Like Your Freedom?

According to DoJ, A federal criminal complaint was unsealed on March 11, 2024 in the Southern District of Florida charging a Florida man with conspiring to defraud the United States by hiding income and assets offshore and with making a false statement to the IRS.

According to the allegations contained in the complaint, between 1985 and 2020, Dan Rotta hid more than $20 million in assets in at least two dozen secret bank accounts at five different Swiss banks, including UBS and Credit Suisse. Over the years, Rotta allegedly earned substantial income from these assets that he did not report on his tax returns.

Starting in 2008, after it was reported publicly that UBS and its bankers were under criminal investigation for helping U.S. taxpayers evade their taxes, Rotta allegedly took steps to continue concealing his offshore assets, including by closing his UBS account and moving the funds to Credit Suisse and another Swiss bank, and then later transferring the funds into Swiss bank accounts in the name of nominees.

In 2011, the IRS allegedly began auditing Rotta after it obtained evidence that he had unreported foreign financial accounts. (From UBS?) Allegedly, Rotta falsely denied that he had any such accounts. During the audit, the IRS allegedly obtained evidence showing Rotta received transfers of hundreds of thousands of dollars from these foreign accounts that he did not report on his tax returns. Rotta allegedly claimed that these transfers were non-taxable loans from third parties and caused his representative to present the IRS with sham loan documents to corroborate his claims. As part of the scheme, Rotta allegedly enlisted his friend and cousin, Co-Conspirator 1, a native and resident of Brazil, to claim to the IRS that he either made or facilitated the fake loans.

The IRS allegedly did not believe Rotta and assessed additional taxes as well as penalties and interest against him. Rotta allegedly then caused a petition in U.S. Tax Court to be filed that sought a redetermination of the IRS’s assessments. In that petition, Rotta, through his attorney, allegedly falsely denied having any foreign accounts and attached the fictitious loan documents. Furthermore, Rotta allegedly caused Co-Conspirator 1 to travel to the United States and retell the false loan story to IRS attorneys. In 2017, after Rotta allegedly presented evidence showing that the purported loans had been repaid, the IRS reversed the deficiencies and agreed that Rotta owed no additional tax. Unbeknownst to the IRS, however, the funds that Rotta purportedly repaid to the third parties allegedly went into accounts that he controlled.

In 2019, after he allegedly became aware that the IRS would receive copies of his Swiss bank records, Rotta attempted to participate in the IRS’s voluntary disclosure practice. Under that practice, taxpayers who willfully do not comply with their tax and reporting obligations can make timely, accurate and complete disclosures of their conduct, which may be a way to resolve their non-compliance and limit their criminal exposure. 

In His Submission, Which Was Signed Under Penalties Of Perjury, Rotta Allegedly Made Several False Statements.

_________

Really???

Rotta was arrested on March 9 and made his initial court appearance on March 11, 2024 before U.S. Magistrate Judge Jared M Strauss of the U.S. District Court for the Southern District of Florida. 

If convicted, Rotta faces a maximum penalty of five (5) years in prison for the conspiracy charge and five (5) years in prison for the false statement charge. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

A complaint is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

Do You Have Undeclared Income from
an Offshore Bank or Financial Advisors?

Is Your Name Being Handed Over to the IRS?

Want to Know if Voluntary Disclosure is Right for You?

Contact the Tax Lawyers at 

Marini & Associates, P.A.   

for a FREE Tax Consultation contact us at:

www.TaxAid.com or www.OVDPLaw.com 

or Toll Free at 888-8TaxAid (888) 882-9243  

Treasury States That BOI Filing is Still Required for ALL But Plaintiffs in National Small Business United

On March 6, 2024 we posted Federal Court Rules Corporate Transparency Act Unconstitutional - No Need to File BOI Just Yet where we discussed that in National Small Business United v. Janet Yellen, a Northern District of Alabama Federal Judge ruled on March 1, 2024, that the CTA was unconstitutional. 

At first glance, the summary judgment could be read as banning the Treasury and any other agency of the federal government from enforcing the CTA. However, The court's ruling prohibits CTA enforcement only against the NSBA itself and all of its members.

The Treasury Department's Financial Crimes Enforcement Network made its interpretation of the ruling clear in a statement issued by FinCEN stated that the ruling applies (ONLY) to the plaintiffs.

"Those Individuals And Entities Are Not Required To Report Beneficial Ownership Information To FinCEN
At This Time."

Given the extremely limited reach of the ruling, it's doubtful that the Treasury and its FinCEN arm will issue guidance universally suspending CTA enforcement while the appeals process plays out, beyond the FinCEN statement issued on March 4, 2024.

Therefore all reporting companies facing CTA deadlines should seriously consider filing, even if the Federal District Court's ruling covers them. Businesses that fail to file in time to meet their CTA deadlines are betting on the NSBA prevailing in the courts. 

Meanwhile, If The US Prevails, These Businesses Will
Potentially Face Significant Civil Fines, Interest, And Penalties, As Well As Possible Criminal Penalties, Including Jail Time.

Choosing to file means potentially losing their filing fees and any cost incurred if they decide to use an advisor. However, filing provides peace of mind, staying in CTA compliance means there's no chance of facing more stringent financial and criminal penalties for failure to file.

Need Help Filing Your BOI Report?

     Contact the Tax Lawyers at

Marini & Associates, P.A. 

for a FREE Tax HELP Contact us at:
www.TaxAid.com or www.OVDPLaw.com
or Toll Free at 888 8TAXAID (888-882-9243)

 

Federal Court Rules Corporate Transparency Act Unconstitutional - Do You Still Need to File BOI?

The CorporateTransparency Act (CTA), created and implemented by the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN), became effective January 1, 2024. The CTA aims to enhance corporate transparency in an effort to prevent and combat illicit financial activities, such as money laundering and tax evasion, discouraging the use of shell corporations as a tool to disguise and move illicit funds. The CTA implements reporting requirements for limited liability companies (LLCs), corporations, and other business entities that have never had to report such information previously, with harsh penalties for non-compliance.

From inception, the CTA sparked debate and controversy across the country, as evidenced by the hundreds of conflicting comments submitted during the preliminary drafting and review phase among business owners, lawyers, CPAs, and other professional groups, many claiming the CTA was too invasive, unmanageable, difficult to enforce, and, ultimately, ineffectual.

Now, in National Small Business United v. Janet Yellen, a Northern District of Alabama Federal Judge ruled on March 1, 2024, that the CTA was unconstitutional. Citing privacy concerns, and a myriad of legal reasoning and precedent around the scope of Congress’s power, the Court concluded:

“The CTA exceeds the Constitution’s limits on the legislative branch and lacks a sufficient nexus to any enumerated power to be a necessary or proper means of achieving Congress’ policy goals…the Corporate Transparency Act is unconstitutional because it cannot be justified as an exercise of Congress’ enumerated powers.”

U.S. District Judge Liles C. Burke Permanently Blocked The U.S. Department Of The Treasury From Enforcing The Law Against The Suit's Plaintiffs, The National Small Business Association And One Of Its Members, Business Owner Isaac Winkles, And Granted Their Summary Judgment Motion.

"Even in the pursuit of sensible and praiseworthy ends, Congress sometimes enacts smart laws that violate the Constitution," Judge Burks said. "This case, which concerns the constitutionality of the Corporate Transparency Act, illustrates that principle."

Judge Burke said in his opinion that Congress' foreign affairs powers do not justify the CTA's regulation of corporate entities that otherwise fall under the purview of states.

And while the government alleged that the CTA brings the U.S. into compliance with international standards for anti-money laundering and fighting terrorism financing, the judge said that interpretation of the Constitution's Necessary and Proper Clause "would sanction almost any exercise of congressional power given the existence of a relevant international standard."

"Read that way, the Necessary and Proper Clause would give Congress carte blanche to do as it pleases, allowing it to 'reach beyond the natural limit of its authority and draw within its regulatory scope those who otherwise would be outside of it,'" the judge said, quoting the 2012 U.S. Supreme Court decision in National Federation of Independent Business v. Sebelius.

The judge also rejected the government's argument that the Commerce Clause justifies the CTA, saying that Congress cannot regulate an entire class "just because some members of the class use the channels and instrumentalities of commerce."

Among other things, he also said the CTA lacks a jurisdictional hook and is not an essential part of a comprehensive regulatory scheme, leaving it outside the scope of Congress' power to regulate "non-commercial, intrastate activity."

The Treasury Department's Financial Crimes Enforcement Network made its interpretation of the ruling clear in a statement issued by FinCEN stated that the ruling applies (ONLY) to the plaintiffs.

"Those Individuals And Entities Are Not Required To Report Beneficial Ownership Information To FinCEN
At This Time."

Do You Still Need To File Your BOI Report? 

     Contact the Tax Lawyers at

Marini & Associates, P.A. 

for a FREE Tax HELP Contact us at:
www.TaxAid.com or www.OVDPLaw.com
or Toll Free at 888 8TAXAID (888-882-9243)

 

Sources:

Law360

'Empire' Star Terrence Howard Owes Income Tax After Threatening DOJ Atty

According to Law360, Empire" actor Terrence Howard owes more than $900,000 in federal income taxes under a default judgment by a Pennsylvania federal judge that follows a months long search by the government to notify the actor of the suit, during which he threatened a government attorney.

U.S. District Judge John F. Murphy granted the government's request for the ruling against Howard of $903,000 following a hearing during which an attorney for the U.S. Department of Justice said authorities investigated voicemail messages Howard left her. Those messages, detailed in court documents, included Howard railing against the injustices of taxation and threatening to "bring [her] down."

"The legal and factual basis for the default judgment is provided in more than sufficient detail in the government's briefing and exhibits," Judge Murphy said in the order, which said interest would continue to accrue on the judgment.

The government expended considerable time and effort in putting that evidence together. The judgment caps a drama-filled, months long attempt by the government to ensure the TV star knew he was being sued for unpaid taxes for 2010, 2011, 2016, 2017 and 2019, and to prove it in court.

The government filed the complaint against Howard in December 2022. In March, the government asked the court for another three months to locate the actor, saying they had sent process servers to Plymouth Meeting, Pennsylvania, the address on file for Howard with the Internal Revenue Service. But the gated property appeared to be unoccupied, and its intercom lacked connectivity, according to a March 15 filing.

An entertainment attorney for Howard told the government that she would contact his tax attorney, who told the government he would discuss the suit with Howard, according to the filing. But by June, the government had come up empty again, telling the court that the tax attorney told them he would not be representing Howard after all, according to a June 20 filing.

"Despite the United States' diligent efforts, the defendant still has not been served with the complaint and summons," the government told the court in the filing, again asking for more time.

A Pennsylvania federal court "expressed concerns about the sufficiency of the purported service," according to an Oct. 5 filing, and asked the government to continue trying to notify Howard about the suit against him.

On Oct. 31, Howard was personally served notice of the lawsuit at a St. Louis Park, Minnesota, address, according to filings.

The government presented additional evidence confirming Howard's knowledge of the suit in a January request to the court to reduce the debt to judgment. Howard had called Ruwe and left a voicemail message saying he was going to be representing himself and would "need assistance in that", according to a Jan. 8 filing, which included a transcript of the message.

Howard Said In The Message That He Believed It Was
"Immoral For The United States Government To Charge
Taxes To The Descendants Of Slaves Who Built This
Country For 400 Years," According To The Filing.

When the voicemail cut off, Howard called the attorney back and left another message, saying the U.S. "should, by default, become the property of the descendants of slaves."

In the second voicemail, Howard calls Ruwe by her full name and says he's going to post the call on the internet and let "the descendants of slaves" know that he's reached out to her.

"We're Gonna Bring You Down," Howard Said,
According To The Transcript, With A Laugh.
"Looking Forward To This."

________________

Have an IRS Tax Problem?

     Contact the Tax Lawyers at

Marini & Associates, P.A. 

for a FREE Tax HELP Contact us at:
www.TaxAid.com or www.OVDPLaw.com
or Toll Free at 888 8TAXAID (888-882-9243)

IRS Begins Audits Of Corporate Jet Usage To Ensure High-Income Groups Don’t Fly Under The Radar On Tax Responsibilities

Using Inflation Reduction Act funding and as part of ongoing efforts to improve tax compliance in high-income categories, the Internal Revenue Service announced on February 21, 2024 plans to begin dozens of audits on business aircraft involving personal use. (IR-2024-46) 

The audits will be focused on aircraft usage by large corporations, large partnerships and high-income taxpayers and whether for tax purposes the use of jets is being properly allocated between business and personal reasons.

The IRS will be using advanced analytics and resources from the Inflation Reduction Act to more closely examine this area, which has not been closely scrutinized during the past decade as agency resources fell sharply. The number of audits related to aircraft usage could increase in the future following initial results and as the IRS continues hiring additional examiners.

“Personal use of corporate jets and other aircraft by executives and others have tax implications, and it’s a complex area where IRS work has been stretched thin. With expanded resources, IRS work in this area will take off. These aircraft audits will help ensure high-income groups aren’t flying under the radar with their tax responsibilities” said IRS Commissioner Danny Werfel.

For someone such as an executive using the company jet for personal travel, the amount of personal usage impacts eligibility for certain business deductions. Use of the company jet for personal travel typically results in income inclusion by the individual using the jet for personal travel and could also impact the business’s eligibility to deduct costs related to the personal travel.

The examination of corporate jet usage is part of the IRS Large Business and International division’s “campaign” program. Campaigns apply different compliance streams to help address areas with a high risk of non-compliance. These efforts include issue-focused examinations, taxpayer outreach and education, tax form changes and focusing on particular issues that present a high risk of noncompliance.

The IRS will begin conducting examinations in the near future as part of the agency’s commitment to ensuring fairness in tax administration.

In addition to work on corporate jets, the IRS has a variety of efforts underway to improve tax compliance in complex, overlooked high-dollar areas where the agency did not have adequate resources prior to Inflation Reduction Act funding.

• For example, the IRS is continuing to pursue millionaires that have not paid hundreds of millions of dollars in tax debt. The IRS has already collected $482 million in ongoing efforts to recoup taxes owed by 1,600 millionaires with action continuing in this area. 
• Elsewhere, the IRS is pursuing multi-million-dollar partnership balance sheet discrepancies, ramping up audits of more than 75 of the largest partnerships using artificial intelligence (AI) as well as other areas.

"The IRS continues to increase scrutiny on high-income taxpayers as they work to reverse the historic low audit rates and limited focus that the wealthiest individuals and organizations faced in the years that predated the Inflation Reduction Act,” Werfel said. 

“We are adding staff and technology to ensure that the taxpayers with the highest income, including partnerships, large corporations and millionaires and billionaires, pay what is legally owed under federal law. 

Have an IRS Tax Problem?

     Contact the Tax Lawyers at

Marini & Associates, P.A. 

for a FREE Tax HELP Contact us at:
www.TaxAid.com or www.OVDPLaw.com
or Toll Free at 888 8TAXAID (888-882-9243)

Funding Boost For The IRS Could Raise $497B

The Inflation Reduction Act's investment in the Internal Revenue Service could raise $497 billion over a decade, marking a significant increase over the agency's previous estimates of how much revenue the law's funding boost would generate, the agency said Tuesday.

The IRS' previous estimates suggested that the 2022 law's funding boost would bring in $390 billion in revenue between fiscal years 2024 and 2034, but the agency's old process for estimating revenue was "extremely conservative," according to the white paper released by the IRS and the U.S. Department of Treasury.

According to the agency's new estimates, which take into account direct revenue and the effects of "soft notices" in addition to the effects audits have on taxpayer behavior, the funding boost could raise as much as $497 billion.

The new estimates include the effects of "specific deterrence," which finds that taxpayers who are audited are more likely to be compliant during future years, according to the white paper.

The IRS' previous estimates of the Inflation Reduction Act's revenue effects assumed that the agency would maintain its recent operation practices and that those practices would become less effective as they were scaled up, according to the paper.

The New Estimates Consider The Full Range Of Ways That
The Technology, Data And Service Improvements Funded
By The Inflation Reduction Act Will Increase Revenues.

The new estimates assume that the IRS is sufficiently funded from fiscal year 2024 through fiscal year 2034 in addition to the funding provided by the Inflation Reduction Act, the paper said.

Have An IRS Tax Problem?

     Contact the Tax Lawyers at

Marini & Associates, P.A. 

for a FREE Tax HELP Contact us at:
www.TaxAid.com or www.OVDPLaw.com
or Toll Free at 888 8TAXAID (888-882-9243)

 

How Not To Handle an IRS Investigation - Taxpayer Convicted of Tax Fraud

This is a perfect example of why the things that taxpayer do during an IRS audit, to cover up past IRS noncompliant, can get you criminally convicted. According to the DoJ, a federal jury in Atlanta convicted Saleem Hakim, 54, of tax evasion and failing to file tax returns on January 31, 2024.

According to court documents and evidence introduced at trial, from 2011 through 2013, Hakim brokered the sale of precious metals to his clients. Hakim earned more than $1 million in commissions from the sales, which enabled him to fund a lavish lifestyle that included purchases of high-end watches, jewelry, designer accessories and furs. Despite earning substantial income, he did not file income tax returns for tax years 2011 through 2013.

The evidence introduced at trial also showed that from 2020 through 2022, Hakim and his wife worked for businesses in Atlanta that bought and sold jewelry and luxury handbags. The Hakims earned a combined income of more than $260,000 for those years yet did not file tax returns. 

The evidence established that Hakim attempted to hide his and his wife’s income from the IRS by diverting his income into a trust that he established after being initially charged with tax crimes for tax years 2011 through 2013.

In addition, Hakim attempted to obstruct the investigation into his tax misconduct for 2020 through 2022. A witness testified that after he received a grand jury subpoena for records relating to income that the witness paid to Hakim and his wife, Hakim drafted a letter for the witness falsely stating he did not have any business records in his possession relating to the Hakims and asked the witness to send the letter. The witness sent the letter to federal prosecutors and IRS agents.

Don't Be Cute With The IRS During an IRS Audit!!!

If You Have A Tax Problem, Hire
An Experienced Tax Attorney
To Deal With The Civil Tax Issue

So That It Does Not Become
A Criminal Tax Issue!

Sentencing is scheduled for April 30, 2024. Hakim faces a maximum penalty of five years (5) in prison for each tax evasion charge and one year (1) in prison on each failure to file charge. He also faces a period of supervised release, restitution and monetary penalties. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Have an IRS Tax Problem?

     Contact the Tax Lawyers at

Marini & Associates, P.A. 

for a FREE Tax HELP Contact us at:
www.TaxAid.com or www.OVDPLaw.com
or Toll Free at 888 8TAXAID (888-882-9243)