OMG! Catholic Priest Sentenced to Prison for Tax Evasion and Bank Fraud

A priest for the Roman Catholic Diocese of San Jose was sentenced to 36 months in prison, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and U.S. Attorney Brian J. Stretch for the Northern District of California.

According to documents and information provided to the court, from 2008 through 2011, Hien Minh Nguyen stole money that his parishioners donated to the Diocese of San Jose through cash and checks made as offerings during religious services.  He deposited such checks into his personal bank account and used the funds for his benefit.  He also wrote checks drawn on church business accounts to pay for personal expenses.  Nguyen evaded paying income taxes on the money he stole, concealing his embezzlement from his return preparer. 

The court found that he embezzled $ 1,449,365 from the Catholic Church, and evaded $ 582,453 in individual income taxes that were due and owing to the Internal Revenue Service (IRS).  

In addition to the term of prison imposed, U.S. District Court Judge Beth Labson Freeman ordered Nguyen to serve three years of supervised release and to pay a total of $1,883,883 in restitution, including $434,518 to the IRS.  Nguyen previously pleaded guilty to tax evasion and was convicted of bank fraud following a bench trial. 

 

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Automated Substitute for Return (ASFR) Program Suspended!

The IRS has paused selection of new cases for its automated substitute for return (ASFR) program because of resource constraints, the agency confirmed to Tax Analysts September 27, 2017

“Like many operations across the IRS, work on the ASFR program has been affected by resource limitations,” the IRS statement said. “These resource constraints have forced us to make difficult decisions, even on programs that provide clear benefits to tax administration.”

The IRS said it is continuing to work on active ASFR cases and ASFR reconsiderations. “In addition, we are committed to taking many actions in 2018 to improve methods of allocating nonfiler cases across our potential compliance treatment streams, and this includes the ASFR program,” it stated.

The IRS statement partially confirms a September 26 post on the Procedurally Taxing blog reporting that a Treasury Inspector General for Tax Administration official had announced suspension of the ASFR program. The post was authored by Carlton M. Smith, a retired professor from the Benjamin N. Cardozo School of Law.

The ASFR program produces automatic tax return filings for individuals whose income reported to the IRS indicates a responsibility to file. The system calculates payments and liabilities, and it produces a letter to the taxpayer with the result.

The IRS produced 184,776 ASFRs in fiscal 2015,

according to National Taxpayer Advocate

Nina Olson’s 2016 annual report to Congress.

The IRS said in its statement that the goal of its nonfiler strategy “will be identifying productive nonfiler work that maximizes cases worked while minimizing staff resources and promoting continued filing compliance through programs built to encourage voluntary taxpayer filing and payment.”

Olson told Tax Analysts that she hopes the IRS will use the ASFR case selection pause as an opportunity to address some of the program’s deficiencies.

The Taxpayer Advocate Service declared the ASFR program one of its “Most Serious Problems” in its 2015 annual report to Congress, complaining that the program’s case selection criteria imposed undue burdens on taxpayers and created extra work for the IRS.

Smith said the ASFR program holds taxpayers whose income exceeds a specific threshold to their obligation to file a tax return, but he wondered whether ending the program would save more money than it produces. “I can’t say how many dollars of IRS employee time generates how much revenue out of this program,” he said.

Now once again taxpayers can file the delinquent return(s), then wait 2 years to have them discharged in bankruptcy; as the prohibition against discharging ASFRs in bankruptcy is no longer relevant!

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Former Fla. Rep. Gets Prison Time For Skipping Tax Returns

According to Law360, a Florida federal judge sentenced former state Rep. Erik Fresen to 60 days in prison on Friday for failing to file seven years' worth of tax returns while serving as a legislator.

In a hearing in Miami, U.S. District Judge Robert N. Scola ordered Fresen to serve 60 days in prison in four 15-day segments, plus one year of probation, according to Fresen's attorney, Jeffrey Neiman of Marcus Neiman & Rashbaum LLP.

Fresen pled guilty in April to not filing his tax return in 2011, when he and his wife made a combined $270,000. Taxes were withheld from his $150,000 income from a private company and his nearly $29,000 legislator's income, but he failed to report other money he earned as a consultant.

But in his plea agreement, prosecutors revealed Fresen had failed to file returns from 2007 through 2013 and owed $214,766 in back taxes. He agreed to fully cooperate with the IRS in its investigation of his income tax liability from 2007 through 2016, according to the agreement.

Fresen had faced up to a year in prison. Prosecutors requested a sentence of at least six months' imprisonment.

The seven-year period when Fresen failed to file tax returns overlaps with his service in the Florida House of Representatives, in which he was a member from 2008 until 2016.

The case is U.S. v. Fresen, case number 1:17-cr-20267, in the U.S. District Court for the Southern District of Florida.



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Marini & Associates, PA's Blog "The Tax Times" Has Been Nominated for The Expert Institute's Best Legal Blog!

Marini & Associates, PA's "The Tax Times" blog has been selected to compete in The Expert Institute’s Best Legal Blog Competition.            
          
From a field of hundreds of potential nominees, "The Tax Times" has received enough nominations to join the one of the largest competitions for legal blog writing online today.
                       
Now that the blogs have been nominated and placed into their respective categories, it is up to their readers to select the very best.

If you like our blog, please let The Expert Institute know by voting for "The Tax Times." 

You can find  "The Tax Times" blog's voting page at the following address: - https://www.theexpertinstitute.com/legal-blog/the-tax-times/

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TIGTA Says That Improvements Are Needed in the IRS' Estate and Gift Tax Return Examination Process

The Internal Revenue Service (IRS) needs to make improvements in the classification, prioritization, and inventory assignment processes for the Estate and Gift Tax Return Examination Program, according to an audit report that the Treasury Inspector General for Tax Administration (TIGTA) issued today.

TIGTA found that IRS estate and gift tax examiners do not always follow estate and gift tax return examination case documentation and timeframe guidelines and that the impact of the Estate and Gift Tax Program’s compliance efforts is uncertain.

Federal estate tax is a tax on the right to transfer property at death.  The Federal gift tax is a tax on transfers of property from a living person to other persons or trusts.  After taxpayers file tax returns with estate or gift transfers and the IRS processes them, the IRS might select some and assign them for further examination if filing requirements have not been met or there are pending issues.  Taxpayers could be treated inconsistently if estate and gift tax returns are not properly assigned to IRS personnel or not properly examined by them.

The IRS reported in its Fiscal Year 2016 data records that it estimated that over $1 billion of tax should be assessed for estate and gift tax returns that were examined and closed for that fiscal year.  TIGTA initiated this audit to determine whether the IRS in its Estate and Gift Tax Program is effectively processing and selecting estate and gift tax returns for examination and to determine the overall compliance impact of the program.

TIGTA’s review found that there is minimal IRS operational guidance for estate and gift tax return examination case classification, prioritization, and examination case inventory assignment processes.  In addition, TIGTA auditors found that some classification documentation sheets, when filled out by classifiers, are difficult to read or are incomplete; that only one employee is responsible for prioritizing cases selected for examination during classification sessions and assigning these cases to the field for examination; and that risks are present due to a lack of documented managerial reviews over the processes.  TIGTA also found that examination case documentation guidelines were not followed in 18 (47 percent) of 38 randomly sampled estate tax examinations, and in 17 (46 percent) of 37 randomly sampled gift tax examinations.

“Taxpayers must be treated fairly and consistently,” said J. Russell George, Treasury Inspector General for Tax Administration.  “The IRS must effectively process, select, and assign estate and gift tax return cases for examination and identify the overall compliance impact of the program,” he added.

TIGTA made several recommendations to improve the examination of estate and gift tax returns, including the creation of a readable document for classifying cases; revisions to the IRM; strengthening of internal controls; and development of guidance on the circumstances in which it is advisable to propose and issue inconsistent notices of tax return case deficiency in estate and gift tax examinations.  IRS management agreed with all of TIGTA’s recommendations and plans to take corrective actions.

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Estate Tax Problems Require an

Experienced Estate Tax Attorney

 

 

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Robert S. Blumenfeld  - 

 Estate Tax Counsel

Mr. Blumenfeld concentrates his practice in the areas of International Tax and Estate Planning, Probate Law, and Representation of Resident and Non-Resident Aliens before the IRS.

Prior to joining Marini & Associates, P.A., he spent 32 years as the Senior Attorney with the Internal Revenue Service (IRS), Office of Deputy Commissioner, International.

While with the IRS, he examined approximately 2,000 Estate Tax Returns and litigated various international and tax issues associated with these returns.As a result of his experience, he has extensive knowledge of the issues associated with and the preparation of U.S. Estate Tax Returns for Resident and Non-Resident Aliens, Gift Tax Returns, Form 706QDT and Qualified Domestic Trusts.

 

 

 

IRS Budget Cuts Results In Fewer Criminal Tax Investigations

According to Law360, Criminal investigations by the IRS reached their lowest levels over the past five years last year because of a reduction in IRS resources, according to a report by the Treasury Inspector General for Tax Administration.

The office said there were "unfavorable trends" in criminal investigations of businesses due to declining resources, like budget challenges, which resulted in attrition of field special agents, in a report on trends over the past five years that the office made public on September 18, 2017.

The Criminal Investigation division initiated 3,395 cases in fiscal year 2016, down 34 percent from 2012, the report said, and tax-related investigations in 2016 made up 57.8 percent of those, the lowest proportion of the past five years.

“TIGTA identified a trend of special agent inventory taking longer to turnover because of the increased time it takes for special agents to determine a case did not contain prosecution potential,” the report said. Investigations discontinued in 2016 had taken an average of 540 days to determine there was no prosecution potential, up from 422 days in 2012.

The report found the number of agents decreased because attrition, with 148 agents lost in 2016 compared with 125 lost in 2012. When combined with agent hiring during those same years, there were 2,217 agents in fiscal 2016, down more than 400 from 2,664 agents working in fiscal 2012. But the report found the agents “consistently maintained inventory levels over an average of 5.30 cases per field special agent.”

Although the Decrease in Agents resulted in fewer investigations, "International Cases" that resulted in

Sentencing Increased 33 percent in 2016

compared to 2012, the report said.

 

Initiated international investigations rose to 221 in 2016 from 211 in 2012, as did the completion of international investigations, growing to 311 in 2016 from 290 four years earlier.

In FY 2016, International Cases resulting in sentencing Increased 33 Percent from FY 2012,” the report said.

The office said it did not make any recommendations along with this report but it did gave the IRS an opportunity to review a draft of the findings.

 

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Utah Chiropractor Sentenced to Prison for Tax Evasion and Obstructing the IRS

An Orem, Utah former chiropractor, who also owned a health care products business, was sentenced to 33 months in prison for tax evasion and corruptly endeavoring to obstruct the internal revenue laws

Louis Hansen, 65, was convicted following a jury trial in July.  According to documents submitted to the court and evidence presented at trial, Hansen attempted to evade the payment of his federal income taxes for the years 2005, 2006, 2007 and 2010. 

For the years 2005, 2006 and 2010, Hansen filed a tax return reporting that he owed taxes, but did not fully pay the amounts due. For 2007, Hansen’s return was audited and additional taxes assessed.  In March 2012, Hansen sent a check to the Internal Revenue Service (IRS) in the amount of $342,699 that was drawn on a closed bank account held in the name of another individual, and claimed that the check paid off his tax debt. 

Hansen then sent a signed letter to the revenue officer assigned to collect his unpaid taxes, claiming that he had paid the taxes owed.  A few months later, Hansen sent 10 additional checks all in the amount of $425,000, to at least six IRS locations, all drawn on another closed account in the name of a different individual, claiming to pay the back taxes due.    

In addition to the term of prison imposed, U.S. District Court Judge Clark Waddoups sentenced Hansen to serve three years of supervised release and to pay restitution to the IRS in the amount of $342,699.  

Nothing Surprising About This Result!

 

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Source

DoJ