No Way To Handle an IRS Collection Matter - Florida Man Sentenced to Three (3) Years in Prison for Obstruction

According to DoJ, a Florida man was sentenced to 36 months in prison today for corruptly obstructing the due administration of the internal revenue laws. 

According to evidence presented at trial, since 1999, Dennis J. Nagle, 67, refused to voluntarily pay federal income taxes. As a result, by 2014, he had an outstanding tax balance of more than $400,000. 

When the IRS attempted to collect Nagle’s unpaid taxes by filing liens and levying his paychecks and pension, Nagle obstructed the IRS’s collection efforts. Nagle submitted false forms to his employer claiming he was exempt from federal tax withholding, attempted to pay off his tax debts with checks written on a closed bank account, and threatened to file criminal complaints against IRS collection officers. 

In total, Nagle sent the IRS at least 15 worthless payments, purportedly totaling more than $1.9 million dollars. 

A jury convicted Nagle on Jan. 30, 2020. In addition to the Three (3) Years in Prison, U.S. District Judge Paul G. Byron ordered Nagle to serve one (1) year of supervised release and to pay approximately $221,502 in restitution to the United States. 

Have 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) 

You Do Have to Report Bribe Income on Your Form 1040

According to DoJ, Ronald Olson, a vice president and deputy operation manager for Turner Construction Company (“Turner”), pled guilty on July 29, 2020, to charges of evading taxes on more than $1.5 million in bribes he received from building sub-contractors and is scheduled to be sentenced on December 9, 2020.

In related proceedings, co-conspirator Michael Campana, a subordinate construction manager at Bloomberg, LLC (“Bloomberg”), was sentenced last Friday, July 24, 2020 to 24 months in prison, for evading taxes on more than $420,000 in the same scheme. 

In addition, two managers of a construction contractor – Anthony Guzzone and Vito NiGro – were respectively charged on July 14 and July 22, 2020, for evading taxes on more than $1.4 million and $1.8 million in bribes that they respectively received in the same scheme.

 

“When Bribery Is Coupled With Tax Evasion,
Both The Bribery Victims And The Taxpaying Public 
Are Forced To Bear The Hidden,
Unfair Costs Of Corruption."

Between 2011 and 2017, Guzzone was a construction project manager for Bloomberg, a global financial firm that was engaged in various building projects in New York City and elsewhere, while Olson and Nigro were executives at Turner, which performed construction projects for Bloomberg.  For most of that time, beginning in 2013, Campana was also a construction manager at Bloomberg.  Each of the defendants participated in a scheme to obtain bribes from construction sub-contractors, who paid kickbacks to the defendants in exchange for being awarded various construction contracts and sub-contracts performed for Bloomberg.

 

In all, the defendants are charged with failing to pay taxes, between 2010 and 2017, on bribes exceeding $5.1 million.  The defendants received such bribes in various forms, including millions of dollars in cash, as well as construction labor and materials for work on their individual homes and properties, and the direct payment of personal expenses.  Such personal expenses included charges related to Campana’s 2017 wedding, such as approximately $40,000 paid by sub-contractors to a catering hall in New Jersey, over $13,000 to a photography studio, and over $23,000 to a travel agent for airline tickets purchased in connection with Campana’s honeymoon, as well as Super Bowl tickets worth almost $8,000 provided to Guzzone.  Each of the defendants evaded federal income tax on this bribery income, by failing to declare it on income tax returns for various years between 2010 and 2017.

 

The taxpayers should have reported this income on their Form 1040, Schedule C. As ridiculous as it sounds, the federal government requires that money acquired through illegal means be reported and taxed just like legitimate income. It's right there on the official IRS tax instructions: 

"Income From Illegal Activities, Such As Money From Dealing Illegal Drugs, Must Be Included In Your Income on Form 1040,  Line 21, or on Schedule C or Schedule C-EZ (Form 1040) if From Your Self-Employment Activity."

Not surprisingly, very few criminals ever declare this type of income. However some do, when they have either been caught during that tax year or think they are about to be caught. Their goal is to avoid getting charged twice: once for their initial crime and again for evading the taxes on their ill-gotten gains. Don't forget that it was tax charges that ultimately put away Al Capone.

 

Where a taxpayer informs the IRS that they made millions from embezzling, stealing money or dealing drugs; legally the IRS can't inform law enforcement, unless a law-enforcement agency gets a court order granting it access to a specific taxpayer's return. 

The IRS is prohibited from proactively alerting other agencies about criminal activity, unless terrorism is involved. And even in that case, it still needs a court order to disclose anything, but the IRS can initiate the legal process on its own. The rules are all spelled out in an IRS guide to "section 6103," the law that covers tax-return confidentiality. Like many legal statutes, it's complex and filled with loopholes. 

Have a Criminal Tax Problem? 

 

 

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)

 

  

Last Call For Voluntary Disclosure For 2017 Unpaid Transition Tax!

June 17, 2020 we posted LB&I Add New TCJA Compliance Campaign Including  §965 Transition Tax & IRC §962 Election!  where we discussed that IRS LB&I has added a new compliance campaign that will examine TCJA issues. 

This new campaign will examine TCJA issues on a select pool of returns and then share what is learned by these examinations throughout the IRS. 

Issues could include computation of:

• IRC §965 Transition Tax,
• IRC §951A GILTI Tax,
• IRC §250 50% Deduction for Corporate Taxpayer's, 
• IRC §960 80% Deamed Paid Foreign Tax Credit and
• IRC §962  Election to be taxed as a Corporation.

Now Douglas O' Donald, Commissioner IRS Large Business and International division said on  during a webcast hosted by the American Bar Section of Taxation, that: 

The IRS Will Begin Distributing Letters and Placing People Into Its Audit Pipeline in "October" To Enforce The Transition Tax On Overseas Profits Included In The 2017 Tax Law!

The IRS expects to send thousands of letters to people who the agency expects may need to comply more fully with repatriation tax. Hundreds of others, who have flouted their related compliance responsibilities, will likely be placed into the agency's purview.

For Offshore Voluntary Disclosures, including Streamlined Offshore Voluntary Disclosures, if the IRS has initiated a civil examination of taxpayer's returns for any taxable year, regardless of whether the examination relates to undisclosed foreign financial assets, the taxpayer will not be eligible to use the Voluntary Disclosure Procedures. 

Have a 2017 TCJA International Tax Problem?

 Contact the Tax Lawyers 

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) 

 

Panama Papers Accountant Scheduled for Jail Time!

On December 5, 2018, we posted Panama Papers Lead To Indictment Of 4 (3 Professionals & 1 Client), where we discussed that New York federal prosecutors announced the indictment of a lawyer and three other men on December 4, 2018 on charges of wire fraud, tax evasion and money laundering, tying the case to the 2016 leak of documents from the law firm Mossack Fonseca called the Panama Papers.

Law enforcement officials described the charges against attorney Ramses Owens, who remains at large, and investment manager Dirk Brauer, accountant Richard Gaffey and businessman Harald Joachim von der Goltz, all of whom have been arrested, as a warning to would-be tax criminals and those who would help them. The defendants could face decades in prison.

“The Charges Announced Today Demonstrate Our Commitment to Prosecute Professionals Who Facilitate Financial Crimes across International Borders and the Tax Cheats
Who Utilize Their Services.”

“The unsealing of this indictment sends a clear message that IRS-CI is actively engaged in international tax enforcement, and more investigations are on the way,” said Don Fort, who leads the tax agency’s criminal investigations unit. “

Now according to Law360, prosecutors are seeking more than two (2) years in prison for a private equity magnate and his former accountant whose $3.4 million tax dodge was exposed in the Panama Papers, saying the two elderly men need to serve significant time to promote respect for U.S. tax law.

Private equity manager Harald Joachim von der Goltz, 83, and his former accountant Richard "Dick" Gaffey, 75, have both admitted to concealing von der Goltz's assets from the IRS with the help of Panamanian law firm Mossack Fonseca. Millions of the firm's documents were leaked to the press in 2016, providing a glimpse into how the world's powerful hide their wealth offshore.

The pair are scheduled to be sentenced in September, and have both argued that their age and health conditions warrant lower sentences. In recent filings, federal prosecutors said that while neither man should serve the eight years called for by the U.S. sentencing guidelines, both should spend multiple years behind bars.

• Von der Goltz, a dual citizen of Germany and Guatemala who prosecutors say abandoned his U.S. resident status in a bid to remain uncharged, has asked for time served, citing his character, age and illnesses. 
• Gaffey, a Massachusetts resident, has lobbied for a two-year sentence to be served in home confinement because of the risk to his health posed by COVID-19.

Prosecutors told U.S. District Judge Richard M. Berman that they would not oppose delaying the start of prison sentences for the two men, depending on the severity of the pandemic at the time. However, they asked the judge to impose unspecified sentences longer than two years on both men. 

Have a Criminal Tax Problem?

 

 

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)

 

  



Advice For Those Who Didn’t File An Extension on July 15, 2020

The IRS cautions taxpayers who missed the July 15 tax deadline and didn't request an extension, to file as soon as possible to reduce potential penalties. e-Filing returns can help expedite the process.

An extension to file is not an extension to pay; penalties and interest will apply to taxes owed after July 15.  

A taxpayer will usually qualify for relief if they qualify for First -Time Penalty Abatement or where they have reasonable cause for filing late.

1.     First-Time Penalty Abatement (FTA) - Generally, an FTA can provide penalty relief if the taxpayer has not previously been required to file a return or has no prior penalties (except the estimated tax penalty) for the preceding three years with respect to the same IRS File (IRM §20.1.1.3.6.1). or

2.     Reasonable Cause Defense - Under Section 6038 of the tax code, which lays out the information reporting requirements for individuals and businesses with an interest in foreign corporations and the penalties for delinquent filing, penalties may be abated if a reasonable cause exists for the failure to file. However, neither the statute nor the applicable regulations define a reasonable cause standard for the abatement. Treasury Regulations Section 301.6651-1(c) provide a definition of what constitutes reasonable cause for failure to file corporate income tax returns and says that "if the taxpayer exercised ordinary business care and prudence and was nevertheless unable to file the return within the prescribed time, then the delay is due to reasonable cause." 

Have IRS Penalty Problems?

 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) 

Tax Court Will Keep Remote Trial As An Option After the Pandemic is Over

According to Law360, The U.S. Tax Court will keep remote trials as a possible option because of the greater access it offers to petitioners, Chief Judge Maurice Foley said One July 22, 2020.

The Tax Court already has said it will conduct remote trials this fall due to the pandemic. Keeping them as a future option would reduce burdens for those who may not live near a trial location and might otherwise face travel costs, need time off of work or need child care to attend in-person trials, Foley said during a webcast by the American Bar Association Section of Taxation.

"Although Remote Trials Were Intended To Address The Pandemic, They'll Remain In The Court Toolbox," Foley Said.

"It will certainly reduce court expenses and it will also be a less intimidating setting for taxpayers."

The court announced in May it would conduct trials remotely during its fall calendar session because of the pandemic, and it issued an administrative order setting procedures for holding the remote sessions.

Nearly all remote trials will have an audio live stream for the public to listen in, Foley said during Wednesday's webcast. What's more, remote trials could increase pro-bono representation for taxpayers, he said. Without travel limitations, pro-bono programs could extend representation beyond their geographic area, he said.

"To accommodate our remote proceedings, limited entries of appearance may be filed earlier," he said. "And we anticipate an increase in taxpayers seeking assistance."

Foley said the court will post "mock trial videos" on its newly redesigned website Monday that will provide a general sense of how remote calendar calls and trials could proceed. The court has already posted information about remote proceedings, including sample standing pretrial orders and FAQs.

Need Tenacious Representation in Tax Court?

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

IRS Field Collection Continue -- But Mostly Remotely

In a memo to field collection employees, the Director of Field Collection for the IRS's Small Business/Self-Employed Division has said that, due to COVID-19, Field Collection will continue to maximize telework and remote contact between employees and taxpayers for the vast majority of its cases. Face-to-face public contact/field activities will only occur in exceptional cases.

The COVID-19 pandemic, beginning March 2020, significantly affected Field Collection (FC) employees’ ability to conduct face to face investigative and enforcement activities with the public. Throughout the COVID-19 pandemic, Field Collection and IRS have emphasized employee safety as our number-one priority, and that will continue to be the case when the People First Initiative expires on July 15, 2020.

Effective July 16, 2020 and until further notice, Field Collection will continue to maximize telework and remote contact between employees and taxpayers for the vast majority of our cases. 

Face-To-Face Public Contact/Field Activities Will Only Occur In Exceptional Cases, As Described Below. They Will Not Be Routine Or Regularly Occurring Activities.

Field Collection employees may be permitted to conduct essential face-to-face public contact/field activities, on a voluntary basis, only when necessary and appropriate, and only with Territory Manager concurrence.

These limited face-to-face public contact/field activities may include making field contacts to view assets, serve summons, take necessary and appropriate investigative and/or enforcement actions, and conduct interviews with taxpayers, their designated representatives, and/or third parties at their homes or business locations (if there are no alternate locations where these activities can be performed), and will only be authorized when:

• There are no effective alternatives to face-to-face contact, and the failure to act poses a risk of permanent loss to the government, such as the expiration of a statute, assets being placed permanently beyond government reach, or the continuing pyramiding of employment tax liabilities or 
• The taxpayer or representative has requested face-to-face contact and the RO and manager agree that field contact would advance the progress of the case.

In all instances, we will consider the personal facts and circumstances relative to each individual employee including factors such as risk status and personal safety concerns relative to the proposed face-to-face public contact/field activities. 

Employees must conduct all face-to-face public contact/field activities with caution and extreme sensitivity to the taxpayer’s personal circumstances, and how the taxpayer has been impacted by the COVID-19 pandemic. Employees must apply good judgment in determining when public contact and/or enforcement action is appropriate and should use Soft Contact procedures to determine the impact of the national emergency on the taxpayer. The IRM provides employees with the necessary authorities and discretion to appropriately handle unusual situations and hardship issues.

In all instances of public contact, employees are expected to wear masks or other face coverings, practice social distancing, and adhere to CDC guidelines (handwashing, etc.) to guard against possible exposure to or spread of COVID-19. 

Where possible, employees should consider conducting the meeting with the taxpayer in an IRS facility (such as, Taxpayer Assistant Centers) equipped with plexi-glass barriers. 

Field Collection employees and managers should use this document, along with the attached checklist, and other COVID-19 related federal, state, and local guidance on health and safety, travel, restrictions on state/local business resumption status, and most importantly, knowledge as to the appropriateness of face-to-face public contact/field activities given local circumstances, when considering and approving face-to-face public contact/field activities.

Received a Disparaging IRS Notice?

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) 

Background. As part of the IRS's Field Collection group, revenue officers (RO) are IRS civil enforcement employees who work cases that involve an amount owed by a taxpayer or a delinquent tax return. (IRM 5.1.20, Field Collecting Procedures, Collection Inventory (11/2/2016); IRS website "How To Know it's Really the IRS Calling or Knocking on Your Door: Collection")

In cases where a taxpayer may have been affected by a disaster, the IRS can use "soft contact" procedures to contact the taxpayer about a tax debt. A soft contact entails approaching the taxpayer with caution and extreme sensitivity to their personal circumstances. Stress and fatigue are factors to consider even in instances where the taxpayer did not experience any personal, monetary, or physical damage from the disaster. (IRM 5.1.12.2.7 (8/5/2014))

Due to COVID-19, the IRS has stopped field revenue officer enforcement actions, such as liens and levies. Revenue officers will continue to pursue high-income non-filers and perform "other similar activities" where necessary. See IRS provides updates on compliance, exam activities through July 15 (05/15/2020).

Limit on Field Collection activities to continue. The July 10, 2020 memo says that, until further notice, Field Collection will continue to maximize telework and remote contact between employees and taxpayers for the vast majority of its cases. Face-to-face public contact/field activities will only occur in exceptional cases, as described below. They will not be routine or regularly occurring activities.

Field Collection employees may be permitted to conduct essential face-to-face public contact/field activities on a voluntary basis, only when necessary and appropriate, and only with manager concurrence.

These limited face-to-face public contact/field activities may include making field contacts to view assets, serve summons, take necessary and appropriate investigative and/or enforcement actions, and conduct interviews with taxpayers, their designated representatives, and/or third parties at their homes or business locations (if there are no alternate locations where these activities can be performed), and will only be authorized when:

• There are no effective alternatives to face-to-face contact, and the failure to act poses a risk of permanent loss to the government, such as the expiration of a statute, assets being placed permanently beyond government reach, or the continuing pyramiding of employment tax liabilities; or

• The taxpayer or representative has requested face-to-face contact and the RO and manager agree that field contact would advance the progress of the case.

The memo stresses that ROs must conduct all face-to-face public contact/field activities with caution and extreme sensitivity to the taxpayer's personal circumstances and how the taxpayer has been impacted by the COVID-19 pandemic. ROs must apply good judgment in determining when public contact and/or enforcement action is appropriate and should use Soft Contact procedures to determine the impact of the national emergency on the taxpayer.

The memo notes that the Internal Revenue Manual provides ROs with the necessary authorities and discretion to appropriately handle unusual situations and hardship issues.