IRS Nabs Billionaire in Biggest Tax Evasion Case in US History

Tech mogul Robert Brockman has been charged with tax evasion totaling over two billion dollars, the largest case of its kind in the United States.

Brockman, the CEO of Reynolds and Reynolds, a company that makes management software for car dealerships, is also accused of money laundering, wire fraud and other crimes over a 20-year period. His illegal schemes included offshore entities in Bermuda and Nevis, and secret bank accounts in Bermuda and Switzerland. Among items he purchased with unreported taxable income were several homes and a luxury yacht for 29 million dollars named Turmoil.

To avoid detection, Brockman created an encrypted email system to communicate with employees and used code names such as ‘bonefish’ and ‘snapper’ and ‘the house’ for the IRS. He once asked a money manager to attend a ‘money laundering conference’ under an assumed identity, and had the same manager destroy documents using shredders and hammers.

He faces a lengthy prison sentence and millions of dollars in fines.

Your IRS Questions Answered Here…

Question: I’ve finally decided to seek help from a Tax Professional who specializes in Tax Problem Resolution.  I want to start getting my paperwork together for the appointment; what will I need to bring with me?

Answer:  It’s very important to have certain documentation with you for the initial interview.  Your tax resolution specialist will need this info to determine the best way to move forward to resolve your tax issues.  The items to bring include:

  • The most recent IRS/State tax notices and collection letters;
  • Copies of your last two years of filed income (1040) tax returns;
  • A monthly household cash flow budget by expense category (list all outflows of money)
  • Your most recent paystubs with YTD info verifying income from all sources and all withholdings and payroll deductions;
  • If you are self-employed, an independent contractor, or small business owner, prepare a “rough draft” current profit and loss statement. If this is not possible, just bring your Schedule C from your most recently filed 1040;
  • A list of any quarterly estimated tax payments made, if any, for the current year

Son of Former Mob Boss Doesn’t Toe the Line

Gennaro Angiulo, the owner of GJ Towing in Boston, was charged with a payroll fraud scheme that defrauded the US government by more than 3.3 million dollars. Angiulo is the son of Gennaro ‘Jerry’ Angiulo, a former mob boss who ran the mafia in Boston with his brothers from the 1960s to the 1980s.

From 2014 through 2017 the younger Angiulo paid a portion of wages to his employees in cash, and failed to collect, account for, or pay over to the IRS the required withholding and FICA taxes.

To fund payroll Angiulo cashed checks made out to the towing company and failed to record those checks as income, furthering his legal troubles.

Angiulo faces up to 15 years in prison, restitution, and fines up to $750,000.

Office Manager of Supply Company Supplies Herself with Company’s Cash

The office manager of a contractors supply company in Illinois, Joan Chenoweth, has been indicted by a grand jury for embezzlement and for filing false tax returns.

Chenoweth controlled the company’s finances and had access to the business’s credit cards and bank accounts. In addition to writing company checks to herself, she paid personal credit card bills with company credit cards, and wrote unauthorized payroll checks to herself that exceeded her salary.

She avoided detection by making false entries into the company’s accounting program and by deleting true and correct entries. During a four-year period Chenoweth stole approximately $624,152.

In addition to the fraud charges, she is charged with filing false income tax returns for 2014 through 2017.

If convicted, Chenoweth will be required to pay restitution and penalties, and faces up to 20 years in prison.

Finance Director Steals Over 1.5 Million from School Board Goes to Prison to Learn a Lesson

Laurie Wade, the financial director for the Franklin County Board of Education in Kentucky, was sentenced to 10 years in prison for money laundering and filing false tax returns.

Beginning in 2011 and continuing through 2019, Wade wrote numerous unauthorized checks from the school board account to herself and made false entries into the company’s accounting program to cover her tracks.

Simultaneously, Wade served as the treasurer of the Leestown Gospel Church and controlled its finances with little oversight. Over a period of several years she used the Church to launder money she had stolen from the school board. She made repeated deposits into the church bank account and then wrote checks to herself, attempting to legitimize the stolen funds. It was a check from the school board for $89,100, deposited into the church account, that first alerted the FBI to Wade’s criminal activity.

Charged! And We Don’t Mean His Car!

Cory Beck, a senior manager in the information technology department at Tesla, the electric car maker, pleaded guilty to three counts of filing false tax returns after he failed to disclose more than $220,000 in income generated from selling MacBooks he stole from his employer.

Beck had access to the company’s vast array of computer products. He stole the laptops from October 2015 to March 2018.

He faces up to three years in prison and fines totaling $100,000 for each of the three counts he pleaded guilty to.

He Helped Millions Fight Off Viruses Then Hid His Millions from the IRS

John McAfee, the creator of McAfee VirusScan software, has been arrested in Spain and is awaiting extradition to the US on charges of tax evasion. He is accused of failing to file tax returns from 2014 to 2018 despite earning more than 23 million dollars during that time.

McAfee resigned from the company that bears his name in 1994, and during the last few years derived a lucrative income from speaking engagements, consulting work, crypto-currencies and selling the rights to his life story.

To evade paying taxes McAfee had his payments deposited into bank accounts and cryptocurrency exchange accounts in the names of nominees, and concealed assets, including a yacht and real estate, by putting them in the names of others.

Last year McAfee tweeted that he hadn’t filed tax returns for eight years because, “Taxation is illegal.” He faces up to 30 years in prison.

Did You Make Money with Cryptocurrency? How to Get Right with the IRS

For early adopters of Bitcoin, Ethereum and other popular cryptocurrencies, the profit potential has been simply stunning. While there have been some heart stopping moments and frightening ups and downs, the clear long-term trajectory has been upward.

If you are one of those early adopters who profited from the rise in cryptocurrency values, you are probably feeling pretty good about your decision. But your good fortune could soon take a dark turn, one that could leave you in hot water with the IRS.

After many years of taking a hands off approach to cryptocurrency investments, the IRS is now making up for lost time. At first, the tax agency seemed unsure how to calculate virtual profits or tax cryptocurrency gains, but now the rules are largely in place, and it is time for those who profited to pay up.

There has already been some movement on the cryptocurrency taxation front, and it is only a matter of time before the IRS takes notice of your holdings – and your profits. The tax agency has recently obtained data from major cryptocurrency exchanges, and letters are going out to large holders of these virtual currencies. But you should not simply wait for the IRS to contact you. The best approach is to do your homework now and make your plans for paying what you owe. Here are some simple tips to help you get right with the IRS.

Note: If you already have tax troubles or owe more than $10k to the IRS or state but can’t pay in full, contact our firm today. We help people find tax relief, file years of unfiled tax returns, and sometimes settle their tax debt for a fraction of what’s owed.

 

Learn the Rules

There has been a lot of confusion over how cryptocurrencies were to be taxed, and the IRS itself has issued a number of different rulings in that regard. With so much conflicting information, it is no wonder so many cryptocurrency investors chose to avoid the whole thing.

Studies suggest that only a small percentage of cryptocurrency investors have reported their holdings to the IRS. Some holders of cryptocurrency did not believe they were required to report their investments, while others assumed their transactions were anonymous. Now that the IRS has proven that neither contention is correct, it is time to learn the rules and follow the reporting requirements.

The IRS may have been slow to categorize cryptocurrencies, but the tax agency now has firm rules in place. If you hold cryptocurrency or have profited in the past, now is the time to learn the rules. Whether you do your own homework or seek out expert advice, the more you know the better off you will be.

 

Estimate Your Gains

Once you know the rules, the next step is to estimate your potential gains. The rules governing cryptocurrency profits are complex, but you should still be able to estimate the possible tax hit.

It may take some time to reconstruct the purchases and sales you made along the way, so take your time and gather as much information as you can. If you are missing some information, you may be able to find what you need through your favorite cryptocurrency exchange. Many major exchanges keep detailed records of purchases, sales and other cryptocurrency transactions. Once you know how much you made on those cryptocurrency transactions, you can work to calculate the taxes you might owe.

 

Work with a Cryptocurrency Tax Relief Expert

Tax calculations are not for the faint of heart, and it is easy to make a mistake. If you want to avoid problems with the IRS and head off any penalties and interest, you will need expert help and guidance.

The cryptocurrency market is still relatively new, and the current IRS tax treatment of these virtual assets is even newer. Even so, some tax experts have already started to specialize in these alternative investments, and seeking their expertise could help you pay what you owe while avoiding penalties and interest.

If you already have a tax preparer, start by asking about their experience with cryptocurrency investments. If your current tax advisor is not a cryptocurrency expert, it is time to shop around for someone who understands these unique assets and how they are taxed. It may take some time, but it is important to find an expert you can trust.

The IRS may have ignored the early days of the cryptocurrency revolution, but the tax agency is making up for lost time. Some early adopters have already received notices from the IRS, while others are scrambling to calculate their profits and pay what they owe. The tips listed above can help you develop a payment plan, so you can get right with the IRS before it is too late.

 

OWE BACK TAXES?

Our firm specializes in tax problem resolution. We serve clients virtually so don’t hesitate to reach out.  If you want an expert tax resolution specialist who knows how to navigate the IRS maze, reach out to our firm and we’ll schedule a no-obligation confidential consultation to explain your options to permanently resolve your tax problem.


At McCauley Law Offices, P.C., our lawyers will find a solution to your tax problems, no matter how complex your IRS issue is. View our services and contact us (or call 610-388-4474) to schedule a free consultation with one of our tax attorneys. View and purchase Gregory McCauley’s published work “TAXJAMS: Simple Solutions” on Amazon. From our office in Chester County, Pennsylvania, we find tax solutions for clients throughout the country.

Did You Know You Might Owe Taxes On Debt That’s Forgiven? Here’s How It Works.

When you owe creditors money that you can’t afford to repay, sometimes you may be able to get the debt forgiven or otherwise canceled.  When this happens, you no longer owe your creditors the money that you used to owe them.

The IRS, however, usually treats such canceled debt as income that you’ve received.  Income that you could owe taxes on.  If you fail to report it or fail to pay your taxes on the cancelled debt, you’ll end up owing penalties and interest and over time, that could be just as big of a hassle as your original debt.

Note: If you have any tax trouble or owe more than $10k to the IRS or state but can’t pay in full, contact our firm today.  We help people find tax relief, file years of unfiled tax returns, and sometimes settle their tax debt for a fraction of what’s owed.

 

When Do I Not Owe Taxes On Forgiven Debt?

In some cases, you may get an exemption and there are some circumstances in which you won’t owe taxes.

  • Your debt is discharged through bankruptcy proceedings:
    • If you are in serious financial trouble, you may file for bankruptcy and have your debts discharged by the court. Such debts, while they are forgiven, are not considered taxable.
  • You’re insolvent:
    • When you are able to settle with a creditor by paying them less than you owe them, your financial situation may be bad enough that you owe, in general, more than you own. If you are considered financially insolvent in this way by the IRS, you may have either part or all of your debt excluded from taxation. If you believe that you may qualify for insolvency exemption, you should hire a tax resolution professional to help make sure.
  • A canceled debt from friends or family: 
    • If you borrow from friends or family and have them forgive the debt, the money forgiven is considered a gift, and is not taxable income.
  • Tax-deductible interest:
    • If debt that is forgiven includes interest that is tax-deductible, the interest component does not need to be reported as taxable income. Discharged student loans are also usually exempt from taxation.

 

Including the forgiven debt in your tax return

If you don’t tell your tax professional about the forgiven debt, in most cases, you won’t know about paying taxes on forgiven debt until you receive a notice in the mail about it. Usually, a creditor who forgives you over $600 sends you a 1099-C form stating the amount forgiven. If the debt forgiven is exempt, you may need to fill out a Form 982 to state how much should be exempt, and why.

 

What do you do if you pay taxes on forgiven debt that should be excluded?

If debt forgiven is actually exempt from taxes, but you still pay, you’re allowed to amend your tax return for three years. You simply need to file Form 1040X, and mention your exemption on Form 982.

Working with forgiven debt can be complex. It is usually a good idea to hire a tax resolution professional to work out the details.

 

OWE BACK TAXES?

Our firm specializes in tax problem resolution. We serve clients virtually so don’t hesitate to reach out.  If you want an expert tax resolution specialist who knows how to navigate the IRS maze, reach out to our firm and we’ll schedule a no-obligation confidential consultation to explain your options to permanently resolve your tax problem. [add your contact page link].


At McCauley Law Offices, P.C., our lawyers will find a solution to your tax problems, no matter how complex your IRS issue is. View our services and contact us (or call 610-388-4474) to schedule a free consultation with one of our tax attorneys. View and purchase Gregory McCauley’s published work “TAXJAMS: Simple Solutions” on Amazon. From our office in Chester County, Pennsylvania, we find tax solutions for clients throughout the country.

Your IRS Questions Answered Here…

Question: I’m currently separated from my spouse, who owns his own business, and we are in the process of getting a divorce.  I have always filed jointly with my spouse and now the IRS is sending me notices stating I owe $35,000.  I have no idea how they are coming up with this amount as my spouse said he was paying the IRS.

Answer:  You may be able to avoid this liability entirely under the IRS’s Innocent Spouse Relief rules.  Under federal law if an income tax return is signed by both husband and wife, both spouses are 100% responsible for the taxes owed.  However, the law permits special consideration where a spouse cannot be held responsible for mistakes that are attributable to the other spouse.

If you meet the following criteria you may be able to apply for innocent spouse relief:  Your spouse didn’t report all their income; and you were not aware of it and no reason to know about it when you signed the tax return; and it would be unfair to hold you liable for the taxes owed due to your spouse’s error. If you feel you were deceived by your spouse or tricked into signing a return you thought was correct this will help your case too.  There are many other ways you may be eligible for relief under the IRS’s innocent spouse rules and we can help sort this out and determine the proper path for resolution.