Tax Preparers' Hall of Shame: Tax Preparer Faces Fraud, Larceny Counts

And the new inductee of the infamous Tax Preparers' Hall of Shame goes to.....Chiara Monai Hudson

Chiara-Monai Hudson of Baychester Ave., Bronx, was arraigned in Mount Vernon City Court on a seven count felony complaint charging her with two counts of third degree grand larceny, fourth degree tax fraud, third degree attempted grand larceny, fourth degree grand larceny and offering a false instrument for filing, all felonies.

Between May 24, 2011 and Jan. 1, 2012 the defendant claimed unemployment insurance benefits from the New York State Department of Labor and falsely certified that she had been employed by Byram Healthcare, aWhite Plains medical supply company, prosecutors say.

Hudson allegedly submitted false wage and pay stub information in support of her application for unemployment benefits and received unemployment insurance benefits totaling $12,150.

The defendant’s certification of unemployment was false because she was actually never employed by Byram Healthcare, prosecutors said. Therefore, she was not entitled to receive the unemployment benefits and wrongfully obtained $12,150 from the New York State Department of Labor.

Additionally, prosecutors say while aided and abetted and acting in concert with unapprehended others, Hudson submitted 18 additional applications to the Department of Labor seeking unemployment benefits and also included false wage and pay stub information with the applications in an attempt to receive unauthorized unemployment benefits in excess of $4,000.

Hudson, a tax preparer and owner of Arlanna’s Accounting Services, a home/office based tax/accounting firm formerly in Mount Vernon, allegedly submitted false 2009 tax returns to the New York State Department of Taxation and Finance in the name of four individuals and received refund payments from the State in excess of $5,600.

Prosecutors say she admitted to filing over 100 additional false New York State tax returns between 2010 and 2011 for which New York State refund checks to be issued which totaled in excess of $100,000.

Bail was set at $500 cash or $1,000 bond. If convicted, she faces up to seven years in state prison. Her next court date is Oct. 12. 9-19-12

If this is all true then she will be legendary among other Hall of Shame inductees. Also, if true then she is one sad and corrupt human being. Thank you for giving tax preparers everywhere a bad rep!

Smoking Cigarettes Tonight: Cigarette taxes 'disproportionately burden' the poor

New research finds that high cigarette taxes take a heavy toll on low-income smokers, compared to those who are wealthier.

First of all....DUH!!! Ok, lets continue with the story.

In a study, researchers at RTI International found that poor smokers in New York state -- which has the country's highest state cigarette tax at $4.35 a pack -- spent about 25 percent of their household income on cigarettes. Nationally, the average spending was about 14 percent.

 

By contrast, the richest smokers nationwide and in New York spent about 2 percent of their household income on cigarettes.

 

"Excise taxes are effective in changing smokers' behavior," study author Matthew Farrelly, chief scientist and senior director of RTI's public health policy research program, said in an RTI statement. "But not all smokers are able to quit, and low-income smokers are disproportionately burdened by these taxes."

 

Despite the high taxes in New York state, the study found that the percentage of people with incomes under $25,000 who smoked didn't decline from 2003-2004 to 2009-2010.

 

 

The only people to benefit from cigarettees are the corporations that sell them and the people that got paid to do this obvious study. Everyone else including the government are all losers. I still can't believe that corporations are allowed to sell this deadly chemical. I guess money talks in the end.

 

The researchers relied on surveys of more than 13,000 people. The study, funded by New York State Health Department, appeared Sept. 12 in the journal PLoS One.

I'm Rich: U.S. IRS awards $104 milion to UBS tax case whistleblower

Are you scared to report your no-good employer to the IRS? Maybe this story will make your decision easier.

U.S. tax authorities have awarded $104 million to a whistleblower in a major tax fraud case against Swiss bank UBS AG that widened a government crackdown on Americans avoiding taxes in Switzerland, his lawyers said on September 11th.

Bradley Birkenfeld, freed last month from prison, was not present at the news conference where his attorneys announced the reward made under an Internal Revenue Service whistleblower program that has come in for some criticism in Congress.

Birkenfeld had sought a large payout for his role in a tax-dodging case that resulted in early 2009 in UBS entering into a deferred prosecution agreement and paying $780 million in fines, penalties, interest and restitution.

BAAZING!!!!

North Carolina Businessman Sentenced to 12 Years in Prison for Payroll Tax Fraud

Bruce Gregory Harrison III of Greensboro, N.C., was sentenced on September 5th to 144 months in prison following his December 2011 conviction for payroll tax fraud and other crimes, announced Kathryn Keneally, Assistant Attorney General for the Justice Department’s Tax Division; Ripley Rand, U.S. Attorney for the Middle District of North Carolina; and Richard Weber, Chief of Internal Revenue Service (IRS) – Criminal Investigation.

Harrison was convicted on a 63-count indictment alleging large-scale payroll tax fraud and failure to file individual income tax returns. The evidence at trial and at sentencing showed that Harrison failed to pay over more than $40 million dollars in federal taxes withheld from the pay of his thousands of employees in the years 2004-2006 and 2009.

According to the trial evidence and other documents filed in the case, Harrison did business under various corporate names including U.S.A. Staffing and Compensation Management Inc. He owned or controlled temporary staffing companies operating in at least nine states. Harrison’s staffing companies were headquartered in Guilford County, N.C., and contracted with client businesses to provide temporary workers. Harrison’s companies promised to assume full responsibility for the payment of wages and the withholding and transmitting of taxes to the IRS for those employees. Instead, Harrison failed to account for and pay over in excess of $40 million in federal payroll taxes for the employees of those companies. The evidence at trial showed that Harrison caused false bank statements to be presented to auditors to conceal the nonpayment of the payroll taxes.

Harrison was also convicted of corruptly endeavoring to obstruct the IRS by means of false statements to IRS revenue officers. Evidence established he had used company funds to purchase personal residences, to buy a yacht and to finance commercial motion pictures, including National Lampoon’s Pucked and Home of the Giants. Harrison was also convicted of failing to timely file his own income tax returns for 2004, 2005 and 2006.

Tax Preparers' Hall of Shame: Justice Department Seeks to Shut Down Texas Tax Preparers

The Justice Department announced on September 7th that it has sued two Dallas tax return preparers, seeking to bar them from preparing federal tax returns for others. The civil injunction suit alleges that Ricardo Solomon and Leslie Mosley, who operate a business called Trini Tax, claim false deductions and credits on customers’ federal tax returns.

According to the government complaint, Solomon and Mosley included fabricated claims for federal fuel tax credit and for education tax credits on tax returns that they prepared. The complaint alleges that Solomon and Mosley’s false claims for federal fuel tax credits have appeared on at least 187 tax returns, and claimed at least $700,000 for the year 2011 alone. The complaint alleges that Solomon prepared a 2010 tax return for one customer that claimed false fuel tax credits for purported fuel purchases that would have cost the customer far more than she reported receiving in income that year.

 

The complaint further alleges that Solomon and Mosley repeatedly prepared tax returns that falsely claimed their customers were entitled to an education tax credit, although they did not attend an accredited post-secondary educational institution at any point during the tax year.

 

Innocent to proven guilty, so the new inductee to the Tax Preparers' Hall of Shame is pending.

Everyday I'm Hustling: Former IRS Employee Sentenced for Fraudulently Receiving Unemployment Benefits

A California woman has been sentenced to prison for claiming and receiving unemployment benefits while working full-time for the Internal Revenue Service.

Cheryl Lynn Frazier, 60, of Fresno, was sentenced on August 4th by U.S. District Judge Lawrence J. O’Neill to four months in federal prison, followed by three years of supervised release. The judge also ordered Frazier to pay $13,285 in restitution to the California Employment Development Department.

According to court documents, from October 2008 through April 2011, Frazier fraudulently claimed and received state unemployment benefits despite being a full-time IRS employee. Before she became a full-time employee, Frazier was a seasonal employee.

During her off-season unemployment, she filed for and received unemployment benefits. In October 2008, she started to work full-time but continued to claim unemployment benefits. She underreported or omitted her hours and wages on claim forms mailed to EDD, according to prosecutors. Frazier continued to receive unemployment checks until her scheme was detected in April 2011.

“Employees of the Internal Revenue Service must maintain the highest standards of integrity,” said Treasury Inspector General for Tax Administration J. Russell George in a statement. “We will investigate any allegations of misconduct by those employees and refer for prosecution as appropriate.”

Ms. Frazier, you deserve a loud..... C'MON SON!!!!

That's What Friends Are For - IRS can help when natural disasters strike

　

Here is a word from the Goodfellas at the IRS:

Try as we may, the one thing no one can control is the weather. When natural disasters such as, floods, tornadoes and hurricanes occur, families and businesses can often feel overwhelmed when faced with rebuilding their lives. IRS wants to help. Did you know that special tax law provisions may help you recover financially from the impact of a federally declared disaster? If you have damaged or lost property in a location declared by the federal government as a major disaster area, you may be able to get some money back from the IRS right

Additionally, depending on your circumstances, the IRS may grant you more time to file your return and pay your taxes. You could get a faster refund by electing to claim your losses from a federally declared disaster on your tax return for the previous year, usually by filing an amended return. The due date for the amended return is the due date of the return for the year of the loss without extensions.

Check out the Tax Relief in Disaster Situations webpage  to learn more about the latest disaster relief information. This page has helpful tax relief information for those affected by a disaster such as the Mississippi River flooding this spring, along with the April and May tornadoes.

Remember, when natural disasters strike, the IRS is here to help you.

Make It Rain (Tax-Free): NY court to decide if lap dance is tax-exempt art

W. Andrew McCullough, an attorney for the Nite Moves strip club in Albany, told the New York Court of Appeals that admission fees and lap dances at the club should be freed of state sales taxes under an exemption that applies to "dramatic or musical arts performances."

He said that lap dancing is an art form and that, in any case, the state is not qualified to make such determinations, and that making such distinctions would be a violation of the constitutional right to freedom of expression.

A lawyer for the state rejected that analysis, and authorities are demanding about $400,000 in back taxes from the club.

A ruling is expected next month, with possible consequences for the estimated 150 to 200 adult nightclubs in the state.

During August 5th arguments from the club's lawyer, a skeptical Judge Eugene Pigott Jr. said the women are hired untrained and simply "do what they do."

"We need to get past the idea that somehow this is the Bolshoi," Pigott said.

McCullough acknowledged that, but added: "What we're saying is the state of New York doesn't get to be a dance critic."

He presented testimony from a cultural anthropologist who visited the club and concluded that the exotic dancing there qualifies as an art form.

Robert Goldfarb, an attorney for the state, said that nobody would visit the club if the dancers didn't remove their clothes. He also argued that the exemption applies to "choreographed" performances, and what the Nite Moves dancers do doesn't qualify.

At least three members of the seven-judge panel questioned the notion that a performance must be choreographed to be considered artistic. Chief Judge Jonathan Lippman suggested "creative artists in particular" often improvise.

Attorney Bradley Shafer filed a brief on behalf of the Hustler club in New York City in support of Nite Moves and said he has a similar case pending.

A private lap dance goes for $20 a minute (DAMN) at Nite Moves, a windowless building with a small stage and a pole.

"It's definitely a form of art," a dancer said at Nite Moves, where there was only one customer. She declined to give her name, saying she has another, unrelated job. "Some girls are up there practicing for hours when nobody's in here."

This should be an interesting case...stay tuned!

Tax Preparers' Hall of Shame: Long Island Tax Preparer Sentenced

And the new inductee of the infamous Tax Preparers' Hall of Shame goes to...... New York's own Nellie Intriago

The owner of a Long Island tax preparation service was sentenced to serve one year and one day of imprisonment for preparing false federal tax returns for her clients.

Nellie Intriago operated Latin Insurance Brokerage, located Hempstead, N.Y. According to court documents and statements made in court, she aided and assisted in the preparation of false individual tax returns, typically claiming fictitious and inflated job expenses, charitable contributions and other expenses. These overstated “itemized” deductions and expenses resulted in falsely understated tax liabilities and inflated tax refund claims.

Intriago had earlier pleaded guilty and was sentenced to one count of a 10-count indictment, in which she acknowledged preparing a 2004 U.S. Federal Income Tax Return which falsely claimed a $6,182 refund that resulted from fraudulent Schedule A deductions.

Congrats to Nellie Intriago and thank you for giving good tax preparers a bad rep!!!

Can You Pay My IRS Bills: IRS Offers Tips to Reduce Big Refunds and Prevent Tax Bills

Here is a word from the Goodfellas at the IRS:

The Internal Revenue Service reminds taxpayers that it's not too late to adjust their 2012 tax withholding to avoid big tax refunds or tax bills when they file their tax return next year.
Taxpayers should act soon to adjust their tax withholding to bring the taxes they must pay closer to what they actually owe and put more money in their pocket right now.

Most people have taxes withheld from each paycheck or pay taxes on a quarterly basis through estimated tax payments. Each year millions of American workers have far more taxes withheld from their pay than is required. Many people anxiously wait for their tax refunds to make major purchases or pay their financial obligations. The IRS encourages taxpayers not to tie major financial decisions to the receipt of their tax refund - especially if they need their tax refund to arrive by a certain date.
Here is some information to help bring the taxes you pay during the year closer to what you will actually owe when you file your tax return.

Employees

• New Job. When you start a new job your employer will ask you to complete Form W-4, Employee's Withholding Allowance Certificate. Your employer will use this form to figure the amount of federal income tax to withhold from your paychecks. Be sure to complete the Form W-4 accurately.
• Life Event. You may want to change your Form W-4 when certain life events happen to you during the year. Examples of events in your life that can change the amount of taxes you owe include a change in your marital status, the birth of a child, getting or losing a job, and purchasing a home. Keep your Form W-4 up-to-date.

You typically can submit a new Form W–4 at anytime you wish to change the number of your withholding allowances. However, if your life event results in the need to decrease your withholding allowances or changes your marital status from married to single, you must give your employer a new Form W-4 within 10 days of that life event.

Self-Employed

• Form 1040-ES. If you are self-employed and expect to owe a thousand dollars or more in taxes for the year, then you normally must make estimated tax payments to pay your income tax, Social Security and Medicare taxes. You can use the worksheet in Form 1040-ES, Estimated Tax for Individuals, to find out if you are required to pay estimated tax on a quarterly basis. Remember to make estimated payments to avoid owing taxes at tax time.

Publication 505, Tax Withholding and Estimated Tax, has information for employees and self-employed individuals, and also explains the rules in more detail. The forms and publication are available at IRS.gov or by calling 1-800-TAX-FORM (1-800-829-3676).

Poker Face: Five Important Tips on Gambling Income and Losses

Here is a word from the Goodfellas at the IRS

Whether you roll the dice, bet on the ponies, play cards or enjoy slot machines, you should know that as a casual gambler, your gambling winnings are fully taxable and must be reported on your income tax return. You can also deduct your gambling losses…but only up to the extent of your winnings.

Here are five important tips about gambling and taxes:

1. Gambling income includes, but is not limited to, winnings from lotteries, raffles, horse races, and casinos. It includes cash winnings and the fair market value of prizes such as cars and trips.

2. If you receive a certain amount of gambling winnings or if you have any winnings that are subject to federal tax withholding, the payer is required to issue you a Form W-2G, Certain Gambling Winnings. The payer must give you a W-2G if you receive:

• $1,200 or more in gambling winnings from bingo or slot machines;
• $1,500 or more in proceeds (the amount of winnings minus the amount of the wager) from keno;
• More than $5,000 in winnings (reduced by the wager or buy-in) from a poker tournament;
• $600 or more in gambling winnings (except winnings from bingo, keno, slot machines, and poker tournaments) and the payout is at least 300 times the amount of the wager; or
• Any other gambling winnings subject to federal income tax withholding.

3. Generally, you report all gambling winnings on the “Other income” line of Form 1040, U.S. Federal Income Tax Return.

4. You can claim your gambling losses up to the amount of your winnings on Schedule A, Itemized Deductions, under ‘Other Miscellaneous Deductions.' You must report the full amount of your winnings as income and claim your allowable losses separately. You cannot reduce your gambling winnings by your gambling losses and report the difference. Your records should also show your winnings separately from your losses.

5. Keep accurate records. If you are going to deduct gambling losses, you must have receipts, tickets, statements and documentation such as a diary or similar record of your losses and winnings. Refer to IRS Publication 529, Miscellaneous Deductions, for more details about the type of information you should write in your diary and what kinds of proof you should retain in your records.

For more information on gambling income and losses, see IRS Publication 529, Miscellaneous Deductions, or Publication 525, Taxable and Nontaxable Income, both available at IRS.gov or by calling 800-TAX-FORM (800-829-3676).

Bonus tip from the Goodfellas at J.S. Tax Corporation

When you have gambling winnings, don't forget to take out your tax accountant to lunch.

Moment of Truth: Eight Tips for Taxpayers Who Receive an IRS Notice

Warning: Video clip contains curses. You have been warned.

 





Here is a message from the Goodfellas at the IRS:

Receiving a notice from the Internal Revenue Service is no cause for alarm. Every year the IRS sends millions of letters and notices to taxpayers. In the event one shows up in your mailbox, here are eight things you should know.

1. Don’t panic. Many of these letters can be dealt with very simply.

 

2. There are a number of reasons the IRS sends notices to taxpayers. The notice may request payment of taxes, notify you of a change to your account or request additional information. The notice you receive normally covers a very specific issue about your account or tax return.

 

3. Each letter and notice offers specific instructions on what you need to do to satisfy the inquiry.

 

4. If you receive a notice about a correction to your tax return, you should review the correspondence and compare it with the information on your return.

 

5. If you agree with the correction to your account, usually no reply is necessary unless a payment is due.

 

6. If you do not agree with the correction the IRS made, it is important that you respond as requested. Respond to the IRS in writing to explain why you disagree. Include any documents and information you wish the IRS to consider, along with the bottom tear-off portion of the notice. Mail the information to the IRS address shown in the lower left corner of the notice. Allow at least 30 days for a response from the IRS.

 

7. Most correspondence can be handled without calling or visiting an IRS office. However, if you have questions, call the telephone number in the upper right corner of the notice. When you call, have a copy of your tax return and the correspondence available.

 

8. Keep copies of any correspondence with your tax records.

 

Bonus tip from the Goodfellas at J.S. Tax Corporation:

 

Don't hide from your tax issues because we all must meet our moment of truth

Straight Gangsta: Former IRS Agent Accused of Ordering Hit Job

WARNING: If you don't like comedy and cursing, don't view the video. You have been warned!

A former Internal Revenue Service revenue agent and tax preparer has pleaded guilty to charges that he tried to hire a hit man to kill four of his former clients who were scheduled to testify against him in a tax fraud case.

Steven Martinez pleaded guilty August 10 in a federal court in San Diego to criminal charges including murder-for-hire, witness tampering involving attempted murder, solicitation of a crime of violence, mail fraud, filing false tax returns, Social Security fraud, aggravated identity theft, and money laundering. Martinez pled guilty to a total of 12 counts in the superseding indictment.

As part of his guilty plea, Martinez admitted that in late February 2012, he solicited a third party to murder four former clients who were victims of his fraud and were slated to testify against him in his pending criminal tax case. Martinez reportedly directed his limousine driver, Norman Russell Thellmann, to deliver cash to a hit man who had been promised $100,000 to carry out the hit job.

According to the complaint, Martinez told the would-be assassin “he could make him rich for the rest of his life, $100,000 cash, if he eliminated the lady in Rancho Santa Fe and the lady in La Jolla.” The third party said Martinez “suggested that the former employee use two different pistols for the murders and that he acquire a silencer.”

Martinez admitted in court that he tried to prevent the former clients’ testimony by offering the third party $100,000 to murder them. He admitted he provided the hit man with four written packets of detailed information about the former clients, including photos of the soon-to-be murder victims, their homes and personal information. Martinez admitted that once the murders took place, he would pay the perpetrator $40,000 in cash, followed by the remaining $60,000 in cash within 72 hours of the murders.