Wednesday, September 26, 2018

Former CFO of Bankrate Sentenced to 10 Years in the Slammer 4 Orchestrating a Complex Accounting and Securities Fraud Scheme



The former chief financial officer of Bankrate Inc., a publicly traded financial services and marketing company formerly headquartered in North Palm Beach, Florida, was sentenced today to 10 years in prison for orchestrating an accounting and securities fraud scheme that caused more than $25 million in shareholder losses.
Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Ariana Fajardo Orshan of the Southern District of Florida and Inspector in Charge Delany DeLeon-Colon of the U.S. Postal Inspection Service’s Criminal Investigations Group made the announcement.
Edward J. DiMaria, 53, of Fairfield County, Connecticut, was sentenced by Chief U.S. District Judge K. Michael Moore of the Southern District of Florida, who also imposed three years of supervised release and ordered DiMaria to pay restitution in the amount of $21,234,214.  On June 28, DiMaria pleaded guilty to one count of conspiracy to making false statements to a public company’s accountants, falsifying a public company’s books, records and accounts, and securities fraud; and one count of making materially false statements to the Securities and Exchange Commission (SEC).  
“While serving as Bankrate’s CFO, Edward DiMaria blatantly manipulated the company’s publicly reported financial statements by repeatedly lying and directing others to lie to auditors, regulators, and shareholders,” said Assistant Attorney General Benczkowski.  “The significant sentence handed down today underscores the serious nature of corporate fraud and the damage it causes to shareholders and to the public’s trust in our financial markets.  The sentence also demonstrates the Department’s commitment to prosecuting corporate misconduct to the fullest extent of the law.”
“The U.S. Postal Inspection Service has an extensive history of investigating complex financial fraud schemes in order to protect investors as well as the integrity of the financial marketplace from fraudulent activities by trusted insiders who abuse their positions,” said Inspector in Charge Delany DeLeon-Colon. “Anyone who engages in this type of financial fraud scheme should know they will be found and they will be held accountable.”
As part of his guilty plea, DiMaria admitted that between 2010 and 2014 he directed and conspired to commit a complex scheme to artificially inflate Bankrate’s earnings through so-called “cookie jar” or “cushion” accounting, whereby millions of dollars in unsupported expense accruals were purposefully left on Bankrate’s books and then selectively reversed in later quarters to boost earnings.  In addition, DiMaria admitted that he conspired with other Bankrate employees to misrepresent certain company expenses as “deal costs” in order to artificially inflate publicly reported adjusted earnings metrics.  DiMaria made materially false statements to Bankrate’s independent auditors to conceal the improper accounting entries, and he caused Bankrate’s financial statements filed with the SEC to be materially misstated, he admitted.
Hyunjin Lerner, Bankrate’s former vice president of finance, previously pleaded guilty for his role in the conspiracy.  Lerner was sentenced by Judge Moore earlier this year to serve 60 months in prison. 
The U.S. Postal Inspection Service’s National Headquarters Fraud Team investigated the case.  Assistant Chief Henry Van Dyck and Trial Attorneys Emily Scruggs and Jason Covert of the Criminal Division’s Fraud Section are prosecuting the case, with assistance from the U.S Attorney’s Office for the Southern District of Florida.  The SEC also provided assistance in this matter.


SELIG & Associates Aggressive Tax Advocates We solve Income, Payroll and Sales Tax Problems. For a FREE legally privileged consultation with a Federal Tax Practitioner and licensed Attorney call (212) 974-3435


Is Your Insurance Company Taking Advantage of You? Adjuster Selig and Attorney Dorin settle residential and commercial property insurance claims, including business interruption, burglary, fire, windstorm and losses caused by water damage. For more information call David Selig at (212) 974-3435.

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Tuesday, September 25, 2018

Attorney Charged in Offshore Tax Evasion Scheme – Selig & Associates, Aggressive Tax Representation

SELIG & Associates We solve Income, Payroll and Sales Tax Problems. For a FREE legally privileged consultation with a Federal Tax Practitioner and licensed Attorney call (212) 974-3435 

Attorney [Allegedly] Conspired to Repatriate More Than $18 Million in Untaxed Money Held in Foreign Bank Accounts! A federal grand jury returned an indictment charging an attorney with one count of conspiracy to defraud the United States and three counts of tax evasion, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Department of Justice’s Tax Division and U.S. Attorney Ryan K. Patrick for the Southern District. According to the indictment, Jack Stephen Pursley, also known as Steve Pursley, conspired with another individual to repatriate more than $18 million in untaxed earnings from the co-conspirator’s business bank account located in the Isle of Man.  Knowing that his co-conspirator had never paid taxes on these funds, Pursley allegedly designed and implemented a scheme whereby the untaxed funds were made to appear to be stock purchases in United States corporations owned and controlled by Pursley and his co-conspirator.

The indictment alleges that Pursley received more than $4.8 million and an ownership interest in the co-conspirator’s ongoing business for his role in the fraudulent scheme.  The indictment further alleges that for tax years 2009 and 2010 Pursley evaded the assessment of and failed to pay the incomes taxes due on this money by, amongst other means, withdrawing the funds as purported non-taxable loans or returns of capital.  Pursley allegedly used the money he received to purchase personal assets, including a vacation home in Vail, Colorado and property in Houston. 

If convicted, Pursley faces a statutory maximum sentence of five years in prison for the conspiracy count, and five years in prison for each count of tax evasion.  He also faces a period of supervised release, monetary penalties, and restitution. An indictment merely alleges that a crime has been committed. A defendant is presumed innocent until proven guilty beyond a reasonable doubt.

Principal Deputy Assistant Attorney General Zuckerman and U.S. Attorney Patrick commended special agents of IRS-Criminal Investigation, who investigated the case, and Senior Litigation Counsel Nanette Davis, Trial Attorney Grace Albinson, and Trial Attorney Sean Beaty of the Tax Division, who are prosecuting this case.

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Is Your Insurance Company Taking Advantage of You? Adjuster Selig and Attorney Dorin settle residential and commercial property insurance claims, including business interruption, burglary, fire, windstorm and losses caused by water damage. For more information call David Selig at (212) 974-3435.



Friday, September 21, 2018

93% of Prison Inmates are Men and yet, the Inspector General Claims Female Inmates Lack Access to Basic Needs

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  • The Office of the Inspector General at the U.S. Department of Justice made public a report on the Federal Bureau of Prisons’ (BOP) management of its female population. 

  • One expert found the results “damning” and another found them “horrifying.”

  • The report found a lack of access to basic needs for female inmates.

A majority of female inmates in prisons across the U.S. have not been provided basic needs, including feminine hygiene products and access to trauma and pregnancy programs, a Department of Justice (DOJ) investigation into the Federal Bureau of Prisons’ (BOP) management of its female inmate population revealed in a report made public Tuesday.
“Our review identified instances in which BOP’s programming and policy has not fully considered the needs of female inmates, which has made it difficult for inmates to access certain key programs and supplies,” Justice Department Inspector General Michael Horowitz’s report states. While female inmates made up just 7 percent of the total BOP sentenced inmate population of 146,084 as of September 2016, correctional officers have noticed that females have much different, and in some cases stronger, needs. One of the main conclusions from the report, which gathered information between 2012 and 2016, was that while about 90 percent of women are affected by physical and emotional trauma early on in their incarceration, the BOP was unable to provide its trauma treatment program to all eligible female inmates because it only staffed one program director to each institution.  

Is Your Insurance Company Taking Advantage of You? David Selig settles residential and commercial property insurance claims, including business interruption, burglary, fire, windstorm and losses caused by water damage. For more information call David Selig at (212) 974-3435.

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Thursday, September 20, 2018

Why are they HERE (in the 1st Place) Illegal Alien MS-13 Member Convicted of Assaulting a Federal Witness, Drug Distribution, Immigration & Firearms Violations



Is Your Insurance Company Taking Advantage of You? David Selig settles residential and commercial property insurance claims, including business interruption, burglary, fire, windstorm and losses caused by water damage. For more information call David Selig at (212) 974-3435.

An illegal alien and MS-13 gang member from El Salvador was convicted today by a federal jury of using physical force to tamper with a witness; being an illegal alien in possession of a firearm; illegally re-entering the United States after previously being deported; multiple counts of cocaine distribution; and multiple counts of other firearms violations, announced Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division and U.S. Attorney Don Cochran 
Gerson Serrano-Ramirez, aka “Frijole,” 31, was indicted in August 2017 and convicted today after a three-day jury trial in U.S. District Court.
MS-13 is one of the most violent and dangerous gangs in America, and the conduct that occurred in this case is further evidence of the gang’s ruthlessness,” said Assistant Attorney General Benczkowski.  “The Department of Justice and our law enforcement colleagues are committed to combatting MS-13 where the gang operates.  We will seek out members of MS-13 and other violent gangs wherever they may be and prosecute them to the fullest extent of the law.”
“The jury’s verdict will ensure that another violent criminal alien will be removed from our community for a very long period of time and he will have little, if any chance of ever inflicting harm outside of his new home - a federal penitentiary,” said U.S. Attorney Cochran.  “I commend the excellent work of our law enforcement partners and our prosecutors and appreciate the jury’s time and attention during this trial.”
According to evidence and testimony presented at trial, in July 2017, the activities of Serrano-Ramirez and other MS-13 gang members were disrupting the normal operation and business of a local nightclub and this was brought to the attention of Serrano-Ramirez by an acquaintance, with a request to tone down their disruptive behavior.  Serrano-Ramirez later invited the individual to his home, where he subsequently assaulted him by pointing an assault rifle at him; strangling him with the rifle strap; spraying bleach into his eyes and then attempted to suffocate him by placing a plastic bag over his head.  Finally, while clamping the individual’s finger with a pair of pliers and holding an assault rifle on him, Serrano-Ramirez told the individual that if he told anyone about the assault that he would kill him and his mother
Evidence introduced during the trial also included video of the assault which was captured on an in-home security system at Serrano-Ramirez’ house and videos of him packaging and selling cocaine from the residence.  This video was discovered and seized during the subsequent execution of a search warrant.  Also seized during this search was an AK-47 assault rifle, multiple rifle magazines, 582 rounds of ammunition, body armor and a small amount of cocaine and marijuana.

 #TaxCrimes, #TaxEvasion, #FailureToFileTaxReturn, #CriminalNonFiling, #FilingFalseTaxReturns, #InstallmentAgreements,  #PartialPaymentAgreements, #IRSaudits, #SalesTaxAudits, #SalesTaxControversies, #WageGarnishments, #BankLevies, #RealPropertySeizure, #InnocentSpouseRelief, #TrustFundRecoveryPenalty, #PayrollTaxes, #WorkersCompensationInsuranceAudits, #WorkersCompAudit, #StatuteOfLimitations, #OfferInCompromise, #OIC, #AdministrativeAppeals, #CollectionDueProcessHearings, #CDP, #BestTaxAttorneyInNYC, #We Solve Tax Problems, #Successful Tax Attorney, #Honest Accountant, #Proven Results, #Professional Guarantee. #WeSolveTaxProblems, #SuccessfulTaxAttorney,


Monday, September 17, 2018

What is a PUBLIC ADJUSTER and why do I need one?



Is Your Insurance Company Taking Advantage of You? Public Adjuster Selig and Attorney Dorin settle residential and commercial property insurance claims, including business interruption, burglary, fire, windstorm and losses caused by water damage. For more information call David Selig at (212) 974-3435.

public adjuster is a professional claims handler/ claims adjuster who advocates for the policyholder in appraising and negotiating a claimant's insurance claim.[1] Aside from attorneys and the broker of record, state licensed public adjusters can legally represent the rights of an insured during an insurance claim process. Their technical expertise and ability to interpret sometimes ambiguous insurance policies allow property owners to receive the maximum amount of indemnification for their claims. Although seen many times as adversarial by the Carriers, public adjusters do (almost always) substantially increase the settlement value of the loss. Many professionals, and persons who are either incapable due to education, age, or physical impairment, choose public adjuster representation to guide them through the process and minimize the time which must be spent to perfect their claim. Most public adjusters charge a percentage of the settlement like general contractors who add (10/10) to the total repair cost to cover overhead and reasonable profit. Primarily public adjusters prepare detailed scope and cost estimates many times using experts in the fields of remediation, toxicology, and construction engineers to prove their loss. Public adjusters also provide insurance policy interpretation to determine covered and uncovered items and to negotiate with the insurance Carrier to a final and fair settlement.[2]
A public adjuster is a representative of the policyholder who advises, manages, and submits a claim to the policyholder's insurance company. 
There are three classes of insurance claims adjusters: staff adjusters (employed by an insurance company or self-insured entity), independent adjusters (independent contractors hired by the insurance company) and public adjusters (employed by the policyholder). "Company" or "independent" adjusters can only legally represent the rights of an insurance company.[3]
Outside the United States adjusters are commonly called (or translated into English as) "insurance loss assessors" (or simply "loss assessors") and staff adjusters or independent adjusters are called or translated as "insurance loss adjusters" (or simply "loss adjusters").[4]However, there is a clear distinction between a loss adjuster, who works on behalf of an insurance company, and a loss assessor who works on behalf of a policyholder.

Currently, 44 states (and the District of Columbia) have in place some form of statutory and/or regulatory scheme which licenses public adjusters. The states that do not are: Alabama, Alaska, South Dakota, and Wisconsin.[5] In addition, it is important to note that on October 14, 2005, the National Association of Insurance Commissioners (NAIC) adopted the Public Adjuster Licensing Model Act (MDL-228), which governs the qualifications and procedures for the licensing of public adjusters.[6] It defines a public adjuster as "any person who, for compensation or any other thing of value, acts on behalf of an insured", specifies the duties of and restrictions on public adjusters, including regulations for the following: examination, bond or letter of credit, continuing education, public adjuster fees, contracts, record retention, and standards of conduct. In addition, the model act states that public adjusters may only act or aid on the benefit of the insured in first-party claims.[7]
Holding a license in one state only permits the licensed to practice in that state. Although the regulations vary from state to state, the model act states that a non-resident can obtain a license in another state if their home state allows non-residents to apply for a license on the same basis.[7] This reciprocity agreement means that in many cases one can apply for a license in another state without having to pass that state's examination or pre-licensing education requirements.[8] Generally, public adjusters only work with insurance claims related to property damages and the business losses that they trigger such as business income, builders' risk, mechanical and electrical breakdown, extra expense and expediting expense, and leasehold interest. Although it is uncommon for public adjusters to handle health insurance claims, in some states such as Florida they are legally authorized to handle claims in all lines of insurance except life and annuities.[9]

The public adjuster's main responsibilities are to:
  • Evaluate existing insurance policies in order to determine what coverage may be applicable to a claim
  • Research, detail, and substantiate damage to buildings and contents and any additional expenses
  • Evaluate business interruption losses and extra expense claims for businesses
  • Determine values for settling covered damages
  • Prepare, document and support the claim on behalf of the insured
  • Negotiate a settlement with the insurance company on behalf of an insured
  • Re-open a claim and negotiate for more money if a discrepancy is found after the claim has been settled
Typically a policyholder hires a public adjuster to document and expedite their claims, obtain a more satisfactory claim recovery, more quickly, and completely restore their residence or business operations, and insulate themselves from the stress of engaging in an adversarial role with a large corporation. However, the cost of hiring outside experts, no matter how well-earned, can be an added burden when they are borne entirely by the policyholder. The added burden can be alleviated by the work of a public adjuster. However, policy holders who are not properly indemnified by their insurance carriers may be left with little choice but to hire professional assistance to recover the claim payment to which they are entitled.
Public adjusters must be able to recognize claims that may be insubstantial and disputable and explain such problems to the client. The everyday meanings of terms like "collapse", "partial collapse" and "extent of physical damage" might be entirely different from their legal interpretations, requiring the adjuster to clarify such terms for the client.[10] Regulations regarding the uses of these terms are constantly in a state of flux[11] so it is important for public adjusters to have a firm grasp of the law including the division of legal responsibilities between insurance companies and policyholders.

Most public adjusters are paid based on a percentage of the total settlement. For example, one Georgia company states their average fee is 15% based on the type and amount of the insurance claim. However, lower percentages are used for larger losses being claimed under a policy of insurance. Higher percentages are needed for smaller claimed losses. Smaller insurance claims can have similar costs as larger claims, but because the recovery is less on smaller claims the fee range must be adjusted to compensate for the operating costs. All public adjusters are not equal in their abilities to secure policy benefits. Skills of performance can vary significantly between public adjusters ranging from basic to elite expert. Fees of 10% to 12% are ordinary and typical for claimed losses of $100,000 or greater when handled by standard-rated public adjusters. Expert-rated public adjusters get a higher fee than standard-rated adjusters. For example, an expert public adjuster can charge 12% to 15% on a loss that exceeds $100,000. However, superior experts possess capabilities to obtain the most effective results. Therefore, highly qualified adjusters can be expected to be better skilled at achieving a greater increased benefits settlement amount than an adjuster who is not an actual expert. Adjusters who are experts must be classified and registered as an expert by the judicial system. Public adjusters declaring themselves to be experts should be verified, because such notice is not always factual. For those public adjusters who proclaim to be actual experts, it's highly recommended that their credentials be validated to prove such qualifications. Most public adjusters are not court-registered experts, but instead just have claims experience. Experience is often not expertise. 
Some public adjusters charge a flat percentage or a flat fee set price, while others use a regressive scale. It depends, in part, on the State Law where the loss occurred. For example, a regressive scale can be 25% of the first $100,000, 15% between $100,001 and $200,000, and 10% of any amount beyond that. Claims that are less than $50,000 are considered small claim losses. There are Public Adjusters who will not service smaller claims at all, while other public adjusters charge a normal range of a 30% to 35% fee rate for insurance claims with a settlement value that is less than $50,000. Public adjusters can charge a lower fee on the total settlement value of the claim, or they can charge a higher fee on an improved settlement amount that is beyond the initial settlement originally offered by the insuring organization. For example, for a $100,000 loss, a fee can be 12% on the whole claim value, where the cost risk can be a shared expense with the client, but for a lower fee which is a benefit for the client; or alternatively, if the initial settlement was $50,000, then a public adjuster might accept a 25% fee —not on the initial $50,000― but on any additional recovery settlement referred to as "new money", being a partial claim value of an amount which exceeds the initial $50,000 settlement, where fees apply exclusively to only the additional amount recovered. However, this additional recovery method of "new money only" means that the public adjuster assumes all of the cost risk and expense, with no cost risk shared by the client, hence the higher fee. (For a claim not covered by the Policy, the public adjuster could experience a business loss from operating expenses spent on "new money only" claims that are limited to only improved settlement recovery services). There are public adjusters who contract for "new money only" services but charge fees of 40% and 50% to accept that high risk, where any improved settlement benefit, or the new money recovered, is essentially split about evenly between the public adjuster and the client. It's important to note that some states cap public adjuster fees at levels such as 10% or 20%, and some consumers opine that normal public adjuster fees are standardized, citing 10% on any claim regardless of its value. This is not accurate and cannot work. Such limitations can cause public adjusters to avoid helping consumers with smaller claims altogether when the services' costs can actually become a financial loss if not providing a fair, reasonable and necessary business earnings' margin needed by public adjuster firms in order to operate, just as with any business. Most states do not cap fees for this reason, while nearly all states welcome public adjuster services for their insuring public. Professional fees must be adequate for public adjusters to cover operating and business costs while still providing sufficient business income returns on those costs. Higher fees on smaller claims having low recovery values are necessary to provide the adequate compensation that a public adjuster needs to accept the costs of providing full services. 
Regardless of the fee structure, the public adjuster professional fee may, and will likely, be offset by an increase in the settlement amount on a covered claim. In many jurisdictions, the fee structure must be disclosed up front. It is important to note that a public adjuster cannot obtain more than the policyholder is legitimately entitled to, but public adjusters ―especially experts― generally recover a better financial settlement benefit than the fees charged to their clients, thereby leaving their clients with a net financial improvement of benefits recovery after fees are paid. The indemnity promised and provided for by an insurance policy, or the full potential financial recovery value of an insurance claim, is often not obtainable without professional assistance like that which comes from a very capable public adjuster.

Loss Recovery Insurance is an insurance policy devised by Lorega Ltd - which covers the cost of an independent Chartered Loss Adjuster, who acts solely on behalf of the behalf of the policyholder, in preparing, negotiating and settling an insurance claim. Insurers always have the benefit of staff or independent adjusters to act on their behalf, reducing the claim wherever possible. Loss recovery insurance helps level the playing field by providing the policyholder with independent expert advice. Lorega Limited is an Independent Underwriting Agency, based in London, with capacity from Lloyd's and the London Insurance Market, and distributes a number of assistance insurance products which provide expert help, when it is needed, to policyholders in the UK.

While it is not always clear[12] when a policyholder may benefit from hiring a public adjuster, the most benefit is likely to be realized if they are engaged immediately in case of a loss. Shortly after the insurance company receives notice of a loss, an adjuster representing the insurance company will visit the policyholder to gather facts about how the loss occurred, the magnitude of the loss, and the possibility of subrogation. Incorrect, incomplete or inadequately expressed answers to the adjuster's questions may reduce the amount that can be claimed. A public adjuster engaged early in the process, before the fact-finding stage, will have more opportunity to help the policyholder receive a fair settlement for all losses legitimately covered under the insurance policy. However, any time during negotiations with the insurance company and even after a settlement has been received by an insured, a public adjuster may be able to negotiate for a higher amount.


Is Your Insurance Company Taking Advantage of You? Public Adjuster Selig and Attorney Dorin settle residential and commercial property insurance claims, including business interruption, burglary, fire, windstorm and losses caused by water damage. For more information call David Selig at (212) 974-3435.

Wednesday, September 12, 2018

Claiming You’re Not a U.S. Citizen (so you don't have to pay Federal Taxes) and other bad ideas




Some individuals argue that they have rejected citizenship in the United States in favor of state citizenship; therefore, they are relieved of their federal income tax obligations. A variation of this argument is that a person is a free born citizen of a particular state and thus was never a citizen of the United States. The underlying theme of these arguments is the same: the person is not a United States citizen and is not subject to federal tax laws because only United States citizens are subject to these laws.
The Law: The Fourteenth Amendment to the United States Constitution defines the basis for United States citizenship, stating that “[a]ll persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the State wherein they reside.” The Fourteenth Amendment therefore establishes simultaneous state and federal citizenship. Claims that individuals are not citizens of the United States but are solely citizens of a sovereign state and not subject to federal taxation have been uniformly rejected by the courts. The IRS has warned taxpayers of the consequences of making this frivolous argument. Rev. Rul. 2007-22, 2007-1 C.B. 866; Notice 2010-33, 2010-17 I.R.B. 609.
In a variation of this argument, taxpayers argue that although they are citizens of the United States, for the purposes of the Internal Revenue Code they are non-resident aliens and are subject to taxation only on income that is connected with the conduct of a trade or business. The 11th Circuit rejected this contention as frivolous.
Relevant Case Law:
Taliaferro v. Freeman, 595 F.App’x 961, 962-63 (11th Cir. 2014) – the 11th Circuit upheld the lower court’s dismissal of Mr. Taliaferro’s complaint seeking to enjoin the IRS from collecting taxes assessed against him. The court rejected as meritless his argument that, despite his U.S. citizenship, he is, for purposes of the tax code, a nonresident alien who is subject to taxation only on income that is connected with the conduct of a trade or business.
United States v. Bowden, 402 F. App’x 967 (5th Cir. 2010) – in denying an appeal of a sentence for tax evasion, the 5th Circuit rejected the taxpayer’s argument that he was a sovereign and not subject to the laws of the United States.
United States v. Drachenberg, 623 F.3d 122 (2d Cir. 2010) – the 2nd Circuit affirmed Drachenberg’s conviction for tax evasion and conspiracy to defraud the United States and rejected his argument that the federal courts lacked jurisdiction because he was not a citizen of the United States.
United States v. Hilgeford, 7 F.3d 1340, 1342 (7th Cir. 1993) – the 7th Circuit rejected "shop worn" argument that defendant is a citizen of the "Indiana State Republic" and therefore an alien beyond the jurisdictional reach of the federal courts.
United States v. Gerads, 999 F.2d 1255, 1256 (8th Cir. 1993) – the 8th Circuit rejected the Gerads’ contention that they were “not citizens of the United States, but rather ‘Free Citizens of the Republic of Minnesota’ and, consequently, not subject to taxation” and imposed sanctions “for bringing this frivolous appeal based on discredited, tax-protester arguments.”
United States v. Sloan, 939 F.2d 499, 500 (7th Cir. 1991) – the 7th Circuit affirmed a tax evasion conviction and rejected Sloan’s argument that the federal tax laws did not apply to him because he was a “freeborn, natural individual, a citizen of the State of Indiana, and a ‘master’ – not ‘servant’ – of his government.”
United States v. Ward, 833 F.2d 1538, 1539 (11th Cir. 1987) – the 11th Circuit found Ward’s contention that he was not an “individual” located within the jurisdiction of the United States to be “utterly without merit” and affirmed his conviction for tax evasion.
Waltner v. Commissioner, T.C. Memo. 2014-35, 107 T.C.M. (CCH) 1189 (2014) – the court dismissed the possibility of being a citizen of a state but not the United States as “nonsensical” and “backwards; one cannot be a citizen of a State without also being a citizen of the United States. Indeed, citizenship in the United States is “paramount and dominant” over State citizenship.”
Kay v. Commissioner, T.C. Memo. 2010-59, 99 T.C.M. (CCH) 1236 (2010) – the court imposed a $500 penalty under section 6673(a) against James Kay for raising frivolous arguments in the proceeding, including that he “was not born a [U.S.] taxpayer” and that the United States may not tax him because “the United States is a corporation” to which he holds no “allegiance.”  
Other CasesUnited States v. Sileven, 985 F.2d 962 (8th Cir. 1993); Nevius v. Tomlinson, 113 A.F.T.R.2d 2014-1872 (W.D. Miss. 2014); O'Driscoll v. IRS, 1991 U.S. Dist. LEXIS 9829 (E.D. Pa. Jul. 16, 1991); Bruhwiler v. Commissioner, T.C. Memo. 2016-18, 111 T.C.M. (CCH) 1071 (2016); Carlson v. Commissioner, T.C. Memo. 2012-76, 103 T.C.M. (CCH) 1408 (2012); Callahan v. Commissioner, T.C. Memo. 2010-201, 100 T.C.M. (CCH) 225 (2010); Rice v. Commissioner, T.C. Memo. 2009-169, 98 T.C.M. (CCH) 40 (2009); Knittel v. Commissioner, T.C. Memo. 2009-149, 97 T.C.M. (CCH) 1837 (2009); BlandBarclay v. Commissioner, T.C. Memo. 2002-20, 83 T.C.M. (CCH) 1119, 1121 (2002); Marsh v. Commissioner, T.C. Memo 2000-11, 79 T.C.M. (CCH) 1327 (2000); Solomon v. Commissioner, T.C. Memo. 1993-509, 66 T.C.M. (CCH) 1201, 1202-03 (1993).

Honest Tax Advocates To schedule a FREE legally privileged consultation with a licensed Federal Tax Practitioner and Attorney call Selig & Associates directly (212) 974-3435

Successful Tax Representation We practice before the Internal Revenue Service (“IRS”) the New York State Department of Taxation and Finance (“NYSDTF”) the Department of Justice Tax Division (“DOJ”) and the Defense Office of Hearings and Appeals (“DOHA”). *To schedule a legally privileged consultation call Selig & Associates directly (212) 974-3435 

Proven Results  We successfully resolve: Tax Crimes; Tax Evasion; Failure to File a Tax Return and Criminal Non-Filing; Filing False Tax Returns; Installment Agreements; Partial Payment Agreements; IRS Audits; Sales Tax Audits; Sales Tax Controversies; Wage Garnishments; Bank Levies; Seizure of Real Property; Innocent Spouse Relief; Trust Fund Recovery Penalty; Payroll Taxes; Workers Compensation Insurance Audits ("Workers Comp"); Statute of Limitations; Offer in Compromise ("OIC"); Administrative Appeals; Collection Due Process Hearings ("CDP") and most other tax matters. *To schedule a legally privileged consultation call Selig & Associates directly (212) 974-3435

Professional Service Guaranteed We meet with our clients personally. We return telephone calls promptly, answer emails and provide regular updates and status reports. *To schedule a legally privileged consultation call Selig & Associates directly (212) 974-3435


Tuesday, September 11, 2018

Is Compliance with an IRS Summons (really and truly) Voluntary? - The Most Important Thing Ever Written Part (3)



Summoned parties have asserted that they are not required to respond to or comply with an administrative summons issued by the IRS. Proponents of this position argue that a summons thus can be ignored. The Second Circuit’s opinion in Schulz v. IRS, 413 F.3d 297 (2d Cir. 2005) (“Schulz II”), discussed below, is often inappropriately cited to support this proposition.
The Law: A summons is an administrative device with which the IRS can summon persons to appear, testify, and produce documents. The IRS is statutorily authorized to inquire about any person who may be liable to pay any internal revenue tax, and to summon a witness to testify or to produce books, papers, records, or other data that may be relevant or material to an investigation. I.R.C. § 7602; United States v. Arthur Young & Co., 465 U.S. 805, 816 (1984); United States v. Powell, 379 U.S. 48 (1964). Sections 7402(b) and 7604(a) of the Internal Revenue Code grant jurisdiction to district courts to enforce a summons, and section 7604(b) governs the general enforcement of summonses by the IRS.
Section 7604(b) allows courts to issue attachments, consistent with the law of contempt, to ensure attendance at an enforcement hearing "[i]f the taxpayer has contumaciously refused to comply with the administrative summons and the [IRS] fears he may flee the jurisdiction." Powell, 379 U.S. at 58 n.18; see also Reisman v. Caplin, 375 U.S. 440, 448-49 (1964) (noting that section 7604(b) actions are in the nature of contempt proceedings against persons who “wholly made default or contumaciously refused to comply” with an administrative summons issued by the IRS). Under section 7604(b), the courts may also impose contempt sanctions for disobedience of an IRS summons.
Failure to comply with an IRS administrative summons also could subject the non-complying individual to criminal penalties, including fines and imprisonment. I.R.C. § 7210. While the Second Circuit held in Schulz II that, for due process reasons, the government must first seek judicial review and enforcement of the underlying summons and to provide an intervening opportunity to comply with a court order of enforcement before seeking sanctions for noncompliance, the court’s opinion did not foreclose the availability of prosecution under section 7210.


Honest Tax Advocates To schedule a FREE legally privileged consultation with a licensed Federal Tax Practitioner and Attorney call Selig & Associates directly (212) 974-3435

Successful Tax Representation We practice before the Internal Revenue Service (“IRS”) the New York State Department of Taxation and Finance (“NYSDTF”) the Department of Justice Tax Division (“DOJ”) and the Defense Office of Hearings and Appeals (“DOHA”). *To schedule a legally privileged consultation call Selig & Associates directly (212) 974-3435 

Proven Results  We successfully resolve: Tax Crimes; Tax Evasion; Failure to File a Tax Return and Criminal Non-Filing; Filing False Tax Returns; Installment Agreements; Partial Payment Agreements; IRS Audits; Sales Tax Audits; Sales Tax Controversies; Wage Garnishments; Bank Levies; Seizure of Real Property; Innocent Spouse Relief; Trust Fund Recovery Penalty; Payroll Taxes; Workers Compensation Insurance Audits ("Workers Comp"); Statute of Limitations; Offer in Compromise ("OIC"); Administrative Appeals; Collection Due Process Hearings ("CDP") and most other tax matters. *To schedule a legally privileged consultation call Selig & Associates directly (212) 974-3435

Professional Service Guaranteed We meet with our clients personally. We return telephone calls promptly, answer emails and provide regular updates and status reports. *To schedule a legally privileged consultation call Selig & Associates directly (212) 974-3435

Queens Business Owner Admits Stealing Sales Tax (Collected from Customers)

He Pocketed Nearly $251,000 in Sales Taxes (he should have hired SELIG & Associates ) The New York State Department of Taxa...