Manhattan Restaurateur Pleads Guilty to Tax Evasion – He Should have hired SELIG & Associates

He concealed more than $2 Million in Business Income; Used Funds on Luxury Cars, High End Shopping and other Personal Expenses

The owner of a former New York City restaurant pleaded guilty to tax evasion today, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division, U.S. Attorney Geoffrey S. Berman for the Southern District of New York, and Chief of Internal Revenue Service- Criminal Investigation (IRS-CI) Jonathan D. Larsen.

“The defendant funded his lavish lifestyle by failing to pay legally obligated taxes thus causing harm to all Americans,” said Principal Deputy Assistant Attorney General Richard E. Zuckerman. “We remain committed to prosecuting tax criminals who refuse to pay their fair share.”

“As he admitted in court, restaurateur Adel Kellel cooked his books for years, skimming money from his restaurant and salting it away in personal accounts or using it for personal expenses,” said U.S. Attorney Geoffrey S. Berman for the Southern District of New York. “His scheme was a recipe for making millions in unreported income, but now he will have to pay for his gluttony.”

“When Mr. Kellel chose to hide millions of dollars from the IRS, he unfairly shifted the tax burden to honest American taxpayers,” said IRS-CI Chief Jonathan D. Larsen. “As we start the tax filing season, this is a stark reminder of the serious consequences of tax evasion, including potential imprisonment. IRS-CI will continue to be relentless in our mission to root out tax fraud.”

According to the Information and statements made in court, in 2011, Adel Kellel was the President and a minority owner of K&H Restaurant Inc. (K&H), which operated Raffles Bistro (Raffles), a restaurant located at a New York City-based hotel. From 2012 through 2015, Kellel was the sole owner of K&H. K&H’s gross receipts consisted primarily of: (1) credit card payments by Raffles customers; (2) cash payments by Raffles customers; and (3) check payments by the hotel for services that Raffles provided to hotel guests and patrons, including room service, banquets, and catering. 

From 2011 through 2015, Kellel concealed a substantial portion of K&H’s gross receipts by not fully reporting the cash received from Raffles’ customers. Kellel further hid the gross receipts by depositing cash into personal bank accounts, by spending funds directly on personal expenses, and by diverting checks paid by the hotel to K&H into non-business bank accounts that Kellel hid from his accountants. During this time, Kellel diverted more than 150 hotel checks, totaling more than $2 million, to more than a dozen bank accounts. 

Kellel used the diverted income for personal expenses, including: overseas transfers; condominium fees; rent for a high-end Manhattan apartment; college tuition payments from his children; shopping at luxury retailers, such as Hugo Boss and Saks Fifth Avenue; payments for luxury cars manufactured by Mercedes, Porsche, and Maserati; and to pay for domestic and international travel. 

(212) 974-3435

Free Consultation Federal Tax Practitioner, CPCU and Attorney. Practicing before the Internal Revenue Service and New York State Department of Taxation and Finance. We provide our Clients with successful Tax Representation, Insurance Audit Advocacy and Tax Planning Services. Legally privileged consultations available Monday through Friday in our New York City offices. 

Tax Representation Specializing in unpaid Income, Sales and Payroll taxes. We negotiate excellent Payment Plans, Audits, Offers in Compromise, and all other tax matters. Expedited service. Missing Tax Returns prepared and filed within 48 hours. Proven results. Corporations, S-Corps and LLC’s. For immediate assistance call (212) 974-3435.  

Construction Company Owners We help Business Owners with NYSIF Premium Assessments and Workers Compensation Insurance Audits. Specializing in Employee Misclassification, Unreported Income, Application Fraud, Experience Rating, and other W/C violations. Schedule a Free legally privileged consultation today.

Tax Advisors Our strategic Tax Planning and Advisory services are designed to help Business Owners significantly reduce their income tax liability in 2020. Schedule a Free Consultation by calling or contacting us online.

ASK ME ABOUT: IRS Penalty Abatements, Sales Tax Audits & IRS Payment Plans

Selig & Associates

Win with Intelligence Integrity and Thrift

(212) 974-3435

FREE CONSULTATION We provide effective tax representation before the IRS and New York State. By addressing difficult tax controversies with professional expertise and positive energy, we can solve your tax problems, so you can finally get on with your life. To meet with us personally in our New York City offices call 1-(212) 974-3435 or contact us Online. 

PROVEN RESULTS We successfully resolve unpaid income, sales and payroll taxes, unfiled tax returns, monthly installment agreements, offer in compromise, audits, suspended drivers’ license, suspended passport, tax evasion, tax crimes and most other tax issues. Do you have missing tax returns? We can have them prepared and filed for you within 48 hours, guaranteed. Find out what we can do for you. 

(212) 974-3435

U.S. Code § 6651.Failure to file tax return or to pay tax

• U.S. Code 
• Notes 

prev |  next

(a)Addition to the taxIn case of failure—

(1)

to file any return required under authority of subchapter A of chapter 61 (other than part III thereof), subchapter A of chapter 51 (relating to distilled spirits, wines, and beer), or of subchapter A of chapter 52 (relating to tobacco, cigars, cigarettes, and cigarettepapers and tubes), or of subchapter A of chapter 53 (relating to machine guns and certain other firearms), on the date prescribed therefor (determined with regard to any extension of time for filing), unless it is shown that such failure is due to reasonable cause and not due to willful neglect, there shall be added to the amount required to be shown as tax on such return 5 percent of the amount of such tax if the failure is for not more than 1 month, with an additional 5 percent for each additional month or fraction thereof during which such failure continues, not exceeding 25 percent in the aggregate;

(2)

to pay the amount shown as tax on any return specified in paragraph (1) on or before the date prescribed for payment of such tax (determined with regard to any extension of time for payment), unless it is shown that such failure is due to reasonable cause and not due to willful neglect, there shall be added to the amount shown as tax on such return 0.5 percent of the amount of such tax if the failure is for not more than 1 month, with an additional 0.5 percent for each additional month or fraction thereof during which such failure continues, not exceeding 25 percent in the aggregate; or

(3)

to pay any amount in respect of any tax required to be shown on a return specified in paragraph (1) which is not so shown (including an assessment made pursuant to section 6213(b)) within 21 calendar days from the date of notice and demand therefor (10 business days if the amount for which such notice and demand is made equals or exceeds $100,000), unless it is shown that such failure is due to reasonable cause and not due to willful neglect, there shall be added to the amount of tax stated in such notice and demand 0.5 percent of the amount of such tax if the failure is for not more than 1 month, with an additional 0.5 percent for each additional month or fraction thereof during which such failure continues, not exceeding 25 percent in the aggregate.

In the case of a failure to file a return of tax imposed by chapter 1 within 60 days of the date prescribed for filing of such return(determined with regard to any extensions of time for filing), unless it is shown that such failure is due to reasonable cause and not due to willful neglect, the addition to tax under paragraph (1) shall not be less than the lesser of $205 or 100 percent of the amount required to be shown as tax on such return.

(b)Penalty imposed on net amount dueFor purposes of—

(1)

subsection (a)(1), the amount of tax required to be shown on the return shall be reduced by the amount of any part of the tax which is paid on or before the date prescribed for payment of the tax and by the amount of any credit against the tax which may be claimed on the return,

(2)

subsection (a)(2), the amount of tax shown on the return shall, for purposes of computing the addition for any month, be reduced by the amount of any part of the tax which is paid on or before the beginning of such month and by the amount of any credit against the tax which may be claimed on the return, and

(3)

subsection (a)(3), the amount of tax stated in the notice and demand shall, for the purpose of computing the addition for any month, be reduced by the amount of any part of the tax which is paid before the beginning of such month.

(c)Limitations and special rule

(1)Additions under more than one paragraph

With respect to any return, the amount of the addition under paragraph (1) of subsection (a) shall be reduced by the amount of the addition under paragraph (2) of subsection (a) for any month (or fraction thereof) to which an addition to tax applies under both paragraphs (1) and (2). In any case described in the last sentence of subsection (a), the amount of the addition under paragraph (1) of subsection (a) shall not be reduced under the preceding sentence below the amount provided in such last sentence.

(2)Amount of tax shown more than amount required to be shown

If the amount required to be shown as tax on a return is less than the amount shown as tax on such return, subsections (a)(2) and (b)(2) shall be applied by substituting such lower amount.

(d)Increase in penalty for failure to pay tax in certain cases

(1)In general

In the case of each month (or fraction thereof) beginning after the day described in paragraph (2) of this subsection, paragraphs (2) and(3) of subsection (a) shall be applied by substituting “1 percent” for “0.5 percent” each place it appears.

(2)DescriptionFor purposes of paragraph (1), the day described in this paragraph is the earlier of—

(A)

the day 10 days after the date on which notice is given under section 6331(d), or

(B)

the day on which notice and demand for immediate payment is given under the last sentence of section 6331(a).

(e)Exception for estimated tax

This section shall not apply to any failure to pay any estimated tax required to be paid by section 6654 or 6655.

(f)Increase in penalty for fraudulent failure to fileIf any failure to file any return is fraudulent, paragraph (1) of subsection (a) shall be applied—

(1)

by substituting “15 percent” for “5 percent” each place it appears, and

(2)

by substituting “75 percent” for “25 percent”.

(g)Treatment of returns prepared by Secretary under section 6020(b)In the case of any return made by the Secretary under section 6020(b)—

(1)

such return shall be disregarded for purposes of determining the amount of the addition under paragraph (1) of subsection (a), but

(2)

such return shall be treated as the return filed by the taxpayer for purposes of determining the amount of the addition under paragraphs (2) and (3) of subsection (a).

(h)Limitation on penalty on individual’s failure to pay for months during period of installment agreement

In the case of an individual who files a return of tax on or before the due date for the return (including extensions), paragraphs (2) and (3) of subsection (a) shall each be applied by substituting “0.25” for “0.5” each place it appears for purposes of determining the addition to tax for any month during which an installment agreement under section 6159 is in effect for the payment of such tax.

(i)Application to imputed underpayment

For purposes of this section, any failure to comply with section 6226(b)(4)(A)(ii) shall be treated as a failure to pay the amount described in subclause (II) thereof and such amount shall be treated for purposes of this section as an amount shown as tax on a return specified in subsection (a)(1).

(j)Adjustment for inflation

(1)In general

In the case of any return required to be filed in a calendar year beginning after 2014, the $205 dollar amount under subsection (a) shall be increased by an amount equal to such dollar amount multiplied by the cost-of-living adjustment determined under section 1(f)(3) for the calendar year determined by substituting “calendar year 2013” for “calendar year 2016” in subparagraph (A)(ii) thereof.

(2)Rounding

If any amount adjusted under paragraph (1) is not a multiple of $5, such amount shall be rounded to the next lowest multiple of $5.

(Aug. 16, 1954, ch. 736, 68A Stat. 821; Pub. L. 90–364, title I, § 103(e)(4), June 28, 1968, 82 Stat. 264; Pub. L. 91–172, title IX, § 943(a), Dec. 30, 1969, 83 Stat. 727; Pub. L. 92–9, § 3(j)(1), Apr. 1, 1971, 85 Stat. 22; Pub. L. 94–455, title XIX, § 1904(b)(10)(A)(v), Oct. 4, 1976, 90 Stat. 1817; Pub. L. 97–248, title III, § 318(a), (b), Sept. 3, 1982, 96 Stat. 610; Pub. L. 98–369, div. A, title IV, § 412(b)(8), July 18, 1984, 98 Stat. 792; Pub. L. 99–514, title XV, § 1502(a), (b), Oct. 22, 1986, 100 Stat. 2741; Pub. L. 100–203, title X, § 10301(b)(6), Dec. 22, 1987, 101 Stat. 1330–429; Pub. L. 101–239, title VII, § 7741(a), Dec. 19, 1989, 103 Stat. 2404; Pub. L. 104–168, title III, § 303(b)(2), title XIII, § 1301(a), July 30, 1996, 110 Stat. 1458, 1475; Pub. L. 105–206, title III, § 3303(a), July 22, 1998, 112 Stat. 742; Pub. L. 110–245, title III, § 303(a), June 17, 2008, 122 Stat. 1649; Pub. L. 113–295, div. B, title II, § 208(a), Dec. 19, 2014, 128 Stat. 4072; Pub. L. 114–125, title IX, § 921(a), (b), Feb. 24, 2016, 130 Stat. 281; Pub. L. 115–97, title I, § 11002(d)(1)(KK), Dec. 22, 2017, 131 Stat. 2060; Pub. L. 115–141, div. U, title II, § 206(n)(1), title IV, § 401(a)(299)(A), Mar. 23, 2018, 132 Stat. 1181, 1198; Pub. L. 116–25, title III, § 3201(a), (b), July 1, 2019, 133 Stat. 1017.)

Judge Charged With Felony Tax Evasion (better call SELIG & Associates)

An Oklahoma County district judge has been charged with one count of Refusal to File Return with Intent to Evade Payment of Taxes after she failed to file income tax returns from 2015 through 2018. Judge Kendra Coleman allegedly owes tens of thousands of dollars in delinquent taxes.

According to court documents obtained by News 4, Coleman alleges that all of the tax issues had already been taken care of before the indictment was filed.

The documents allege that she filed her 2015 tax return on June 6, 2016, while her 2016 tax return was accepted on Oct. 17, 2017. It also states that her 2017 and 2018 tax returns were filed and accepted just days before the multicounty grand jury indicted her on the charges.

Coleman reported that year she made a gross income of more than $65,000 but only made a 25 dollar payment toward a $1,200 worth of taxes after filing two deadlines for an extension in 2017.

Prater’s team says Coleman “failed to file until nearly a year past and only after it was widely publicized.”

Coleman and her attorney previously told News 4 that the indictment is “false on its face” alleging that all tax issues were wiped clean.”

The charge filed today states Coleman failed to file her state tax return by the deadline, whether she received an extension or not.

It also claims that Coleman did file her return within the extension deadline for 2015 and 2016, but she did not pay the thousands she owed for both of those years or previous years when she owed.

The affidavit states that as of September 13, 2019, Coleman owed the Oklahoma Tax Commission over $23k.

We tried to contact her team again in response to Monday’s felony filing but her office was cleared out and a new judge was filling in.

Coleman’s attorney never returned our call.

Court records also show Coleman filed her tax returns on time in 2008 and 2009. Both years the state owed her a refund.

Selig & Associates 

Our mission is to win every tax case with integrity and thrift

(212) 974-3435

IRS & NYS Tax Representation We represent individuals, business-owners and their businesses before the Internal Revenue Service and the New York State Department of Taxation and Finance. We negotiate excellent payment plans and specialize in large-dollar sales and payroll tax controversies. Has your Drivers' License and Passport been suspended due to unpaid taxes? We can help. Do you have unfiled tax returns? We can have them prepared and filed for you within 48 hours guaranteed.

Insurance Audit Representation We represent construction companies and businesses with Workers Compensation Audits and NYSIF premium disputes, including employee misclassification, underreporting, failure to keep accurate payroll records, and other serious violations. 

Personal Service We only take a limited number of new clients each month. Accordingly, if you have an interesting and/or complicated tax controversy that needs to be solved, please contact us directly for a confidential case evaluation.       

Emergency Appointments Available Monday through Friday in our conveniently located New York City office. To schedule a legally privileged consultation with a Federal Tax Practitioner, CPCU and Attorney call (212) 974-3435 or contact us through our Online Action Form. 

We strive to obtain the best possible outcome for our clients

(212) 974-3435