Attorney and GOP Power Broker Has Champagne Taste but Claims a Beer Budget

George Gilmore, one of the most powerful figures for the GOP in New Jersey, was indicted in Jan. 2019 on six federal tax-related counts.

Gilmore, an attorney at the firm Gilmore & Monahan, which had $2 million in public contracts across the state in 2017, was charged with tax evasion, filing false tax returns, failing to collect, account for, and pay payroll taxes, and making false statements on a bank loan application. Gilmore is also chairman of the Orange County GOP and the county Board of Elections.

According to the indictment, while Gilmore owed the IRS more than $1.5 million in taxes, penalties and interest, rather than paying that debt he spent more than $2.5 million on personal expenses.  Between January 2014 and December 2016, Gilmore spent $380,000 to remodel his waterfront home in Toms River, including an infinity pool and cabana; $440,000 on antiques, artwork and collectables including animal tusks; $20,000 on a Steinway piano and $80,000 on model trains. In order to hide the personal expenses, Gilmore classified the payments as “shareholder loans.”  He did send one check to the IRS for $500,000 but that check bounced as there was less than $2,500 in the account.

Kevin Marino, Gilmore’s attorney said, “George Gilmore faithfully reported every penny of his income, and repeatedly expressed his intention to pay his taxes together with interest and penalties, freely conceded that he was unable to do so in a timely fashion, and share with the government the reasons why, and disclosed that he suffers from “hording disorder.”

Gilmore could face a potential decades-long prison sentence and fines between $250,000 and $1 million.

If You Owe It, and You Have It, You Must Pay It

An independent contractor from Tulsa, Ok, John Petrig, pled guilty in Federal Court to one count of tax evasion.

Petrig worked installing ATM machines inside casinos.  His company paid him a commission based on the number of transactions executed at the ATMs.  On his 2015 tax return, Petrig showed an income of $394,317 but failed to pay the $110,372 in taxes owed.

In 2012, the Internal Revenue Service sent a notice of levy to Petrig’s employer, stating that any commissions earned be sent to the IRS to pay his tax debt.  In turn, Petrig sent a letter to his employer directing that all future commissions be paid to a fictitious corporation he set up.

U.S. Attorney Trent Shores states, “The federal income tax system is based upon the compliance of the taxpaying citizens of this nation.  When an individual, such as Mr. Petrig, decides to shirk his responsibility to pay what he owes, then other law-abiding citizens end up shouldering the burden. Mr. Petrig’s criminal acts cost taxpayers not only the loss of unpaid taxes, but also the additional expense for investigating and prosecuting his criminal behavior.”

Petrig faces a maximum sentence of 5 years prison time, a fine up to $250,000, or both, and up to three years supervised release.

Don’t Mess with the IRS’ Criminal Investigation Division

A fact that is little known to the public, the IRS has a large inventory of weapons. An official report says that at the end of 2017, the tax agency has 4,487 guns and 5,062,006 rounds of ammunition, including 15 fully automatic firearms, which only the Criminal Investigation Division is authorized to carry.

According to an audit report from the Treasury Inspector General for Tax Administration, from 2009 to 2011, IRS agents accidentally discharged their guns 11 times during that time.  The report also stated that the IRS agents fired their guns accidentally more times than they did intentionally. Some of the misfires caused property damage or personal injury.

In a 30-page report issued on July 30, 2018, from the Treasury Inspector General for Tax Administration, the, “Criminal Investigation’s Firearms Training and Qualification Oversight Needs to Be Improved”, included policies on weaponless control, intermediate weapon control and the use of deadly force.

Open the Books, a project of the nonprofit organization American Transparency found that the IRS spent nearly $11 million on guns, ammunition and military-style equipment in 2006-2014.

The IRS Throws a Wrench in Mechanic’s Plan

Albert Strong, a North Carolina mechanic, was sentenced to 36 months in prison for wire fraud and filing a false income tax return after pleading guilty to the charges in April, 2018.

Strong worked as a mechanic/machinist at a company in Charlotte. From 2008 to 2015, Strong embezzled more than $1,488,000 from the company using a fraudulent purchasing and billing scheme.  Using a fake parts vendor, Strong would order fictitious parts from the vendor, creating false invoices and submitting them to the company.

The conviction was based on Strong not reporting his embezzled funds on his 2009-2015 tax returns.  The loss to the IRS was approximately $450,000.

In addition to jail time, Strong was also ordered to serve two years supervised release and pay restitution in the amount of $1,941,377.32

IRS is Cracking Down on International Travel – Notice CP508C

In an effort to put new pressure on taxpayers with tax delinquencies, the Internal Revenue Service (IRS) is leveraging its ability to block international travel—even in the absence of any flight risk.  Delinquent taxpayers may receive a Notice CP508C from the IRS if they’ve been certified to the US Department of State and had their passports revoked.  Please note, in some instances the Power of Attorney on file is not receiving this notice.  Fortunately, there are a few ways to deal with this matter which are described below.  That said, these are somewhat time consumptive; note that while even if you pay out liability in full, the revocation is not immediately released.

On February 27, 2019, the IRS issued an information notice reiterating a prior warning that taxpayers with “seriously delinquent tax debts” (a relatively low $52,000 or more) will be reported to the State Department and may have their passports revoked and applications for new and renewed passports denied or significantly delayed.

Initially, working with the IRS, a taxpayer’s options are the ones you’d expect—paying in full, entering into installment agreements or offers in compromise, requesting a collection due process appeal or requesting innocent spouse relief (yes, your spouse may get to take that trip without you).  But keep in mind, the IRS will usually reverse a certification within 30 days after resolution of your issue and provide notification to the State Department “as soon as practicable.”

Fortunately, according to the IRS, there is also a long list of taxpayers who, even if seriously delinquent, will not be certified to the State Department.  Most of these exceptions, if not already in place, will take time to be put in place, and include taxpayers:  in bankruptcy, who are already deceased, identified by the IRS as victims of tax-related identity theft, who the IRS has already determined are not currently collectible due to hardship, located within a federally-declared disaster area, with pending IRS requests for an installment agreement, with pending IRS offers in compromise, currently serving in a combat zone, or who already have an IRS accepted adjustment that will satisfy the debt in full.

A notice of certification to the State Department may create a heightened urgency and significance to your tax matter, especially if you’re dealing with the Department of Justice.  If your case has become more urgent on account of a notice, we’re here to help—it’s what we do.

Where in the World is John McAfee? The IRS Wants to Know!

John McAfee, the millionaire founder of the anti-virus software bearing his name, has fled the country to elude the IRS and conduct his 2020 presidential campaign from his boat in international waters.

An outspoken critic of the IRS, McAfee claims that “The IRS has convened a grand jury in the state of Tennessee to charge myself, my wife and four of my campaign workers with unspecified IRS crimes of a felonious nature.”

McAfee took to Twitter recently to state that taxation is illegal and publicly declare that he hasn’t filed a return for 8 years. He recently told CNN that his constant criticism of the IRS is what has provoked the indictment. McAfee states, “I have been speaking out more and more against the IRS, both in state when I keynote and also on my social media.  I think they just had enough.”

Confident that he can conduct his presidential campaign while in exile, McAfee says that he will continue to sail in international waters as long as he’s not convicted of charges by the IRS.

First Indictments in the Panama Papers Revelations

“Panama Papers” is the name given to a leak of more than 11 million documents in 2015, which detailed financial and attorney/client information from a Panamanian law firm and the wealth management firm of Mossack Fonseca showing possible tax evasion and money laundering throughout the world.

Four individuals have been indicted on charges that include wire fraud, money laundering, conspiracy and conspiracy to defraud the United States.

The names of the four charged are: Ramses Owens, a lawyer who worked for Mossack Fonseca, who remains at large; Dirk Brauer an asset manager for Mossfon Asset Management, a division of Mossack Fonseca, who was arrested in Paris; Richard Gaffey, an accountant residing in Massachusetts; and Harald Von Der Goltz, a former U.S. resident living in London, who was arrested in December, 2018 along with Gaffey.

In the unsealed indictment, it charges that Owens, Brauer and Gaffey set-up complex entities which allowed their clients to hide and invest millions of dollars which was not disclosed to the IRS.  In addition, the trio created additional schemes to cover their client’s secret offshore bank accounts in Switzerland and other countries.

Evidence was obtained in early 2017, when one of their clients decided to cooperate with the Justice Department and a meeting was set-up between Brauer and an undercover agent posing as a financial advisor.  During the meeting, Brauer proposed to have the undercover agent send his U.S. client’s money overseas and set-up a fake investment for them. Brauer then advised them to report the investment took a loss, and then after the undercover agent could move the money back to the United States without the IRS discovering it.

Your IRS Questions Answered Here…

Question: I owe a several years of back taxes but do not have the money to pay the IRS.  I want to get them off my back and heard of something called an Offer in Compromise.  What is it and how can it help me?

Answer:  An Offer in Compromise is the IRS’ tax resolution debt settlement program.  It’s a program for taxpayers who owe the IRS more money than they can afford to pay. It’s the IRS’s version of a “fresh start” when it comes to tax debt.  If approved, the IRS accepts a lesser amount (sometimes a fraction of what’s owed) to settle your debt.  However, it isn’t always easy to gain approval due to its strict criteria.

The IRS considers your income, assets, expenses, ability to pay, and whether paying the full amount would cause financial hardship. It’s important to remember that the IRS wants its money and will only accept an Offer in Compromise if it thinks it wouldn’t receive any money otherwise.

Your odds for acceptance increase significantly when you have experience in negotiating with the IRS.

Strange Historical Taxes in England

-As early as the 16th century, the English Government taxed playing cards. In 1710, dice and playing cards received a dramatic tax increase, which led to the widespread forgery of playing cards.  The tax was not removed until 1960.

-In 1660, England placed a tax on fireplaces.  To avoid paying taxes, people would cover their fireplaces with bricks.  The tax was repealed in 1689.

-In 1696, England placed a tax on windows, taxing houses bases on the number of windows they had.  The tax lead to houses being built with very few windows, and the tax was repealed in 1851 as it was deemed to cause health problems.

-England placed a tax on printed wallpaper in 1712.  In order to avoid the tax, builders hung plain wallpaper and then painted patterns on the walls.

-In 1789, England introduced a tax on hats.  Hat-makers stopped calling their creations “hats”, so the tax was changed to include any headgear.  The tax was repealed in 1811.

-England has a tax on televisions.  If you own a TV, you must pay an annual fee which is used to finance BBC programming. Color TV’s are taxed at a higher rate than black & white.  If a blind person owns a TV, their tax rate is half.  Failure to pay is subject to criminal penalties.