Provided IRS with False Information and Materials to Conceal Client’s Tax Fraud
An attorney was recently sentenced to 18 months in prison announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division and U.S. Attorney David DeVillers for the Southern District. According to documents and information provided to the court, from 2007 until his client died, the attorney advised and assisted his client in legal matters relating to the operation of his medical clinics. At the time, the attorney specialized in tax law. Around 2010, the IRS audited the doctor’s medical entities. In response to an IRS revenue officer’s request for documentation supporting the entities’ claimed clinical equipment depreciation deductions, the attorney provided false “bills of sale” purporting to support the deductions, but which in fact falsely inflated the value of the equipment. At the same time that the attorney provided these inflated values to the IRS, he provided contradictory valuation information to third parties. In 2011, the lawyer filed petitions in U.S. Tax Court challenging the IRS’s determination that some of the audited entities owed additional taxes. The case was ultimately settled with an agreement that approximately $608,583 was due. When the IRS revenue officer attempted to collect the settlement amount in 2014, the attorney frustrated the IRS’s collection efforts by falsely representing that the relevant entities were defunct with no assets. In all, the lawyer caused a tax loss of $513,960 to the United States. Ultimately, he pled guilty to corruptly endeavoring to impede and obstruct the IRS and the Supreme Court suspended license to practice law. As for the client, he pled guilty to drug, tax, and fraud charges, but died before sentencing in that case. In addition to the term of imprisonment, U.S. District Judge Michael H. Watson ordered the former lawyer to serve 3 years of supervised release. Restitution to the government has already been paid using funds seized from the deceased client/doctor.
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