The IRS filed Federal Tax Lien on my house in someone else’s name.

Taxpayers will often contact our office worried that the IRS filed a Federal Tax Lien (“FTL”) against their house – but the FTL is in someone else’s name.  This is a reality for numerous citizens who do not have a tax problem.  The IRS files FTL’s to secure the governments interest in a back tax liability against all property owned by the individual.

What should you do if you have a FTL that’s filed against your house?  Well, you need to make sure that you purchased the property with clear title.  The IRS files hundreds of thousands of FTL’s per year.  Taxpayers who own real property and then sell it need to acquire a lien discharge from the IRS to ensure that the lien does not stay on the property.  The IRS describes this process in Publication 784.

Operator of South Jersey Tax Preparation Company Pleads Guilty to $340,000 Tax Fraud Scheme

A Cumberland County, New Jersey, woman today admitted her role in a conspiracy to boost business at a tax preparation company she operated by preparing bogus income tax returns for her clients, U.S. Attorney Paul J. Fishman announced.

Noemi Pender, 57, of Rosenhayn, New Jersey, pleaded guilty before U.S. District Judge Noel L. Hillman in Camden federal court to Count One of an indictment charging her with conspiring to aid and assist others in the preparation of false and fraudulent tax returns.

According to documents filed in this case and statements made in court:

Pender was a tax preparer who operated Pender Tax Services in Rosenhayn. For the tax years 2007 through 2011, Pender and Grace Garrett, 63, of Pittsgrove, New Jersey, sought to increase referrals, enhance their business, and enrich themselves by preparing and filing income tax returns based on false information. They used a number of fraudulent practices, including falsely claiming a filer was a “head of household,” inventing and inflating deductions, creating fictitious dependents, and creating false credits for education and childcare.

The bogus returns resulted in a tax loss to the government of more than $340,000.

The conspiracy charge to which Pender pleaded guilty carries a maximum potential penalty of five years in prison and a $250,000 fine. Sentencing is scheduled for June 10, 2016. Garrett previously pleaded guilty to her role on May 19, 2015, and awaits sentencing on March 22, 2016.

U.S. Attorney Fishman credited special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, with the investigation leading to today’s guilty plea. The government is represented by Assistant U.S. Attorney Matthew T. Smith of the U.S. Attorney’s Office in Camden.

IRS Announces 2017 Standard Mileage Rates

The Internal Revenue Service issued the 2017 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.

Beginning on Jan. 1, 2017, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:

53.5 cents per mile for business miles driven, down from 54 cents for 2016
17 cents per mile driven for medical or moving purposes, down from 19 cents for 2016
14 cents per mile driven in service of charitable organizations

Atlantic City Tax Preparer Pleads Guilty to Preparing Fraudulent Returns for Clients

The operator of an Atlantic City, NJ-based tax preparation business pleaded guilty today to filing false claims with government.

John Lopez. 48, a resident of Atlantic City, NJ, entered his plea in Camden federal court before U.S. District Judge Noel L. Hillman. Lopez pleaded guilty to a one count information that charges him with filing false claims with the government. Sentencing is scheduled for June 22, 2016.

“Today Mr. Lopez admitted to preparing and filing fraudulent tax returns,” stated Jonathan D. Larsen, Special Agent in Charge, IRS-Criminal Investigation, Newark Field Office. “Dishonest tax preparers use a variety of methods to cheat, including falsifying information on tax returns to generate larger refunds for their clients. Criminal Investigation will continue to ensure that all tax practitioners, tax preparers and others who practice in the tax law profession adhere to professional standards and follow the law.”

According to court documents and statements made in court:

Lopez was the operator of Rayeson Multi Service, a business that provided among other things, tax preparation services. For the tax years 2012 and 2013, Lopez prepared and filed approximately 40 fraudulent tax returns on behalf of his clients. Lopez falsified those returns by intentionally including fraudulent deductions on Forms W-2 which showed the clients earning wages from companies where they were not employed in order to generate false refunds. In addition, Lopez filed the fraudulent tax returns electronically using somebody else’s preparer identification number because he was ineligible to obtain his own number based on prior fraud. Based on these fraudulent returns filed with the IRS, the U.S. Treasury issued refunds to his clients in the amount of approximately $227,150.

The count of filing a false claim with the government carries a statutory maximum prison sentence of five years and a statutory maximum fine equal to the greatest of: (1) $250,000; (2) twice the gross amount of any pecuniary gain derived from the offense; or (3) twice the gross amount of any pecuniary loss sustained by any victims of the offense.

The investigation was conducted by IRS-Criminal Investigation, Newark Field Office, under the direction of Special Agent in Charge Jonathan D. Larsen and the U.S. Attorney’s Office, under the direction of U.S. Attorney Paul J. Fishman. The Government is represented by Assistant U.S. Attorney Jason M. Richardson.

Check Cashing Business Owner Sentenced to Prison

Jose Boyzo, of Myrtle Beach, SC was sentenced to 18 months in prison and ordered to pay $1.6 million in restitution to the IRS for tax fraud.

Boyzo owned a licensed check cashing business; from 2009 to 2014, he cashed more than 4,305 tax refund checks. Unfortunately, those refund checks were generated from fraudulent tax returns and it was proven in court that Boyzo was aware of they were fraudulently generated.

The US Busts a Huge Fraud Ring

After a three-year investigation, the Department of Justice arrested 56 people in the US, and five call centers in India, accused of running a phony IRS phone call scheme.

The case involves over 15,000 victims and more than $300 million in stolen money.

Starting in 2013, the scammers initially used the “Grandma scam”, calling or emailing a senior citizen pretending to be a grandchild that needs money to get out of jail.

The scheme soon became an IRS scam.  Victims were called and told that unless they paid money immediately, they would be arrested, face deportation or have their driver’s license suspended.  Sometimes they even had the victim’s last four digits of their Social Security number.

They would direct their victims to either wire money or go to a store and load cash onto a prepaid debit card, and then the US based co-conspirators would liquidate or launder the funds using fake names and phony IDs.

The largest payout to the scammers was a Hayward, CA man who lost over $136,000.

Vineland Tax Preparer Indicted for Preparing Fraudulent Tax Returns

The owner and operator of Grant Tax Service, a tax preparation business located in Vineland, N.J., has been indicted by a federal grand jury on eighteen counts of aiding and assisting in the preparation of false tax returns and five counts of filing false income tax returns.

According to the indictment:

Wilford Grant, a resident of Vineland, N.J., owned and operated Grant Tax Service. For the tax years 2008 through 2011, it is alleged that Grant prepared false and fraudulent income tax returns for approximately 26 clients by claiming false filing statuses, fabricating and inflating itemized deductions and fabricating education expenses. By falsifying this information, Grant was able to obtain tax refunds for clients greater than those they were lawfully entitled to receive. These fraudulent tax returns caused a tax loss to the government in excess of $103,000.

It is also alleged that for the tax years 2008 through 2011, Grant prepared false and fraudulent tax returns for himself and his wife by falsifying his and his wife’s filing status and failing to report income earned by Grant Tax Service. In addition, it is alleged that for the 2012 tax year, Grant failed to report income earned by Grant Tax Service on his personal tax return.

If convicted, each count of the indictment carries a statutory maximum prison sentence of three years and a statutory maximum fine equal to the greatest of: (1) $250,000; (2) twice the gross amount of any pecuniary gain derived from the offense; or (3) twice the gross amount of any pecuniary loss sustained by any victims of the offense.

The charges and allegations contained in the indictment are merely accusations, and the defendant is considered innocent unless and until proven guilty.

The investigation was conducted by IRS-Criminal Investigation, Newark Field Office, under the direction of Special Agent in Charge Jonathan D. Larsen and The U.S. Attorney’s Office, under the direction of U.S. Attorney Paul J. Fishman. The government is represented by Assistant U.S. Attorney Jason Richardson.

Home Health Care Co. Owner is Sick over Indictment

Las Vegas resident Maria Larkin, who owned and operated Five Star Home Health Care Inc. was indicted for attempted tax evasion.

From 2004 to 2009, Larkin failed to pay the Income, Medicare and Social Security taxes that were to be withheld from employee’s wages, otherwise known as the “trust fund tax”.  If an employer doesn’t have a payroll service deduct and pay the taxes, then the employer holds these funds in trust until the amounts are paid over to the Internal Revenue Service.  Instead, Larkin transferred those funds to personal funds and assets.

The indictment alleges that she purchased a home in the name of a nominee, engaged in currency transactions with banks in amounts less than $10,000 to avoid currency transaction reports, changed the name of her business and placed the business in the name of a nominee and provided false information to the IRS regarding her ability to pay the trust fund recovery penalties.

If convicted, Larkin faces a maximum of five years in prison, restitution and monetary penalties.

California CPA Sentenced to 57 Months in Prison for Defrauding New Jersey Religious Center, California Nonprofit Out of More Than $4 Million

A California CPA was sentenced today to 57 months in prison for abusing his positions at a worship center in New Jersey and a non-profit in California to steal more than $4 million, U.S. Attorney Paul J. Fishman announced.

Donald Gridiron, 51, of Pomona, California, previously pleaded guilty before U.S. District Judge Kevin McNulty to an information charging him with one count of wire fraud and one count of filing a false tax return. Judge McNulty imposed the sentence today in Newark federal court.

According to documents filed in the case and statements made in court:

A religious facility located in Rahway, New Jersey, hired Gridiron based, in part, on his connections with individuals in the religious community as well as his standing within that community. The religious facility agreed to pay Gridiron a monthly salary and reimburse him for reasonable expenses related to his work. In addition, Gridiron was the treasurer for a non-profit entity registered in California.

Gridiron used his employment with the worship center and his status with the non-profit to illegally syphon money without their consent or authorization. In total, Gridiron transferred more than $4 million to accounts he controlled. Gridiron then used the funds for his own use, including mortgage payments, luxury car payments and gambling expenses. Gridiron also failed to report this income on his tax returns, including $950,000 he stole during the 2011 tax year.

In addition to the prison term, Judge McNulty sentenced Gridiron to three years of supervised release and ordered him to pay restitution of approximately $5.16 million ($4,815,964 to the worship center, including $200,000 to insurers who have paid the worship center; and $348,450 to the foundation.)

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark, and law enforcement officers of IRS-Criminal 2 Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, with the investigation leading to today’s sentencing.

The government is represented by Assistant U.S. Attorney Andrew Kogan of the U.S. Attorney’s Office Economic Crimes Unit in Newark.

How to Protect Yourself From Tax-Identity Theft

Taking the steps below will help protect you from becoming a victim of tax related identity theft. In 2015, the Federal Trade Commission reported a 50% increase in identity theft; the vast majority of the increase involved tax refund fraud.  On average, the IRS resolution time for people who are affected by this type of fraud is 278 days.

  • The most common method of tax identity theft is using your social security number along with a fake W-2. The IRS processes claims in the order received, so the best protection is to make sure you file your return as early as possible.
  • Be aware that using a public wi-fi is really public.  Do not go to any of your personal accounts, such as online banking.
  • Be careful with private documents.  Your credit card statements, bank receipts, or copies of your tax returns should be shredded, not thrown in the trash.
  • If you love to play online games, be careful if they ask you for personal information, such as your mother’s maiden name or the street you grew up on.  Often times these are your security questions and can be used to obtain your passwords.
  • Do not give any one, at any time any personal information over the phone.  The IRS will never call you; they still use snail mail.
  • Do not carry your social security with you.