Tax Return Preparer Pleads Guilty to Aiding in the Preparation of False Tax Returns

A tax return preparer pled guilty to aiding and assisting in the preparation of false tax returns and filing a false personal tax return, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division and U.S. Attorney Thomas T. Cullen.

According to court documents, Saint Julien Pierre owned and operated a tax return preparation business, JP Tax Services LLC,. Pierre aided and assisted in the preparation of 2013 and 2014 tax returns that falsely claimed energy-related credits and illegitimate itemized deductions, in order to fraudulently increase his clients’ refunds. Pierre also filed a false 2013 tax return for himself, on which he fraudulently reported that he was entitled to the same fuel tax credit he falsely claimed on his clients’ returns.

Pierre faces a statutory maximum sentence of three years in prison for each count of preparing false tax returns and three years in prison for the false tax return count. He also faces a period of supervised release, restitution, and monetary penalties. 

Principal Deputy Assistant Attorney General Zuckerman and U.S. Attorney Cullen thanked special agents of IRS-Criminal Investigation, who conducted the investigation, and Tax Division Trial Attorneys Lauren A. Archer and Kevin Schneider and Assistant United States Attorney Charlene R. Day, who are prosecuting the case.

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A Hard Hitting Exposé: What the Hell Are the Gift and Estate Tax Rules After Tax Reform?

The Tax Cuts and Jobs Act, signed into law in December 2017, approximately doubled the federal gift and estate tax basic exclusion amount to $11.18 million in 2018 (adjusted for inflation in later years). After 2025, the exclusion is scheduled to revert to its pre-2018 level and be cut approximately in half. Otherwise, federal gift and estate taxes remain the same.

Gift tax. Gifts you make during your lifetime may be subject to federal gift tax. Not all gifts are subject to the tax, however. You can make annual tax-free gifts of up to $15,000 per recipient. Married couples can effectively make annual tax-free gifts of up to $30,000 per recipient. You can also make unlimited tax-free gifts for qualifying expenses paid directly to educational or medical service providers. And you can make deductible transfers to your spouse and to charity. There is a basic exclusion amount that protects a total of up to $11.18 million (in 2018) from gift tax and estate tax. Transfers in excess of the basic exclusion amount are generally taxed at 40%.

Estate tax. Property you own at death is subject to federal estate tax. As with the gift tax, you can make deductible transfers to your spouse and to charity; there is a basic exclusion amount that protects up to $11.18 million (in 2018) from tax, and a tax rate of 40% generally applies to transfers in excess of the basic exclusion amount.

Portability. The estate of a deceased spouse can elect to transfer any unused applicable exclusion amount to his or her surviving spouse (a concept referred to as portability). The surviving spouse can use the unused exclusion of the deceased spouse, along with the surviving spouse’s own basic exclusion amount, for federal gift and estate tax purposes. For example, if a spouse died in 2011 and the estate elected to transfer $5 million of the unused exclusion to the surviving spouse, the surviving spouse effectively has an applicable exclusion amount of $16.18 million ($5 million plus $11.18 million) to shelter transfers from federal gift or estate tax in 2018.

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Michael “The Situation” Sorrentino and His Brother, Marc Sorrentino, Plead Guilty to Tax Crimes: He should have hired SELIG & Associates

Reality television personality Michael “The Situation” Sorrentino and his brother, Marc Sorrentino, pleaded guilty today to violating federal tax laws, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division, U.S. Attorney Craig Carpenito for the District of New Jersey and Internal Revenue Service Criminal Investigation (IRS CI) Special Agent in Charge Jonathan D. Larsen.

According to documents and information provided to the court, Michael Sorrentino, 36, pleaded guilty to one count of tax evasion and Marc Sorrentino, 38, pleaded guilty to one count of aiding in the preparation of a fraudulent tax return. 

“Today’s pleas are a reminder to all individuals to comply with the tax laws, file honest and accurate returns and pay their fair share,” said Principal Deputy Assistant Attorney General Zuckerman. “The Tax Division is committed to continuing to work with the IRS to prosecute those who seek to cheat the system, while honest hardworking taxpayers play by the rules.” 

“What the defendants admitted to today, quite simply, is tantamount to stealing money from their fellow taxpayers,” said U.S. Attorney Carpenito. “All of us are required by law to pay our fair share of taxes. Celebrity status does not provide a free pass from this obligation.”

 “As we approach this year’s filing season, today’s guilty pleas should serve as a stark reminder to those who would attempt to defraud our nation’s tax system,” stated Jonathan D. Larsen, Special Agent in Charge, IRS-Criminal Investigation, Newark Field Office.  “No matter what your stature is in our society, everyone is expected to play by the rules, and those who do not will be held accountable and brought to justice.”

Michael Sorrentino was a reality television personality who gained fame on “The Jersey Shore,” which first appeared on the MTV network.  According to documents and information provided to the court, he and his brother, Marc, created businesses, such as MPS Entertainment LLC and Situation Nation Inc., to take advantage of Michael’s celebrity status.  

Michael Sorrentino admitted that in tax year 2011, he earned taxable income, including some that was paid in cash, and that he concealed a portion of his income to evade paying the full amount of taxes he owed.  He also made cash deposits into bank accounts in amounts less than $10,000, in an effort to ensure that these deposits would not come to the attention of the IRS.  

Marc Sorrentino admitted that for tax year 2010, he earned taxable income and that he assisted his accountants in preparing his personal tax return by willfully providing them with false information and fraudulently underreporting his income.  

U.S. District Judge Susan D. Wigenton scheduled sentencing for April 25.  Michael Sorrentino faces a statutory maximum sentence of five years in prison for tax evasion. Marc Sorrentino faces a statutory maximum sentence of three years in prison for aiding in the preparation of a fraudulent tax return. Both also face a period of supervised release, restitution and monetary penalties.  Gregg Mark, the accountant for the Sorrentino brothers, previously pleaded guilty in 2015 to conspiring to defraud the United States with respect to their tax liabilities.   

Principal Deputy Assistant Attorney General Zuckerman and U.S. Attorney Carpenito praised special agents of IRS CI, who conducted the investigation, and Trial Attorneys Yael T. Epstein and Jeffrey B. Bender of the Tax Division of the U.S. Department of Justice and Assistant U.S. Attorney Jonathan W. Romankow, who are prosecuting the case. 

Are you in Trouble with the IRS?

Successful Civil and Criminal Tax Representation Selig & Associates practices 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 FREE legally privileged consultation with a licensed Federal Tax Practitioner and Attorney call Selig & Associates directly (212) 974-3435

Proven Results Selig & Associates successfully resolves IRS & NYS tax problems including: 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 FREE legally privileged consultation with a licensed Federal Tax Practitioner and Attorney call Selig & Associates directly (212) 974-3435

Owner of New York Wholesale Food Distributor Indicted for Obstructing the IRS, Filing False Tax Returns, and Structuring: He should have hired SELIG & Associates

Tax Problems Solved

A federal grand jury sitting in the Eastern District of New York returned an indictment yesterday, which was unsealed today, charging the owner of a wholesale food distributor with obstructing the internal revenue laws, aiding and assisting in the filing of false tax returns, and structuring currency transactions, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division.

According to the indictment, Jose Cerritos resided in Brentwood, New York, and owned La Centro American Corp. (La Centro), a wholesale food distributor in Bayshore that sold to retail customers in the New York metropolitan area.  The indictment alleges that Cerritos caused the filing of false individual and corporate income tax returns for 2011 and 2012 that did not report all of his income or all of La Centro’s gross receipts.  Cerritos allegedly did not deposit all of La Centro’s receipts into its business bank accounts and did not inform his tax return preparer of the cash receipts that were not deposited into the business bank accounts.  The indictment further alleges that Cerritos attempted to structure La Centro’s cash receipts in amounts less than $10,000 on the same or consecutive days, to evade bank-reporting requirements, and that he did so in a pattern of illegal activity involving more than $100,000 within a 12-month period. 

The indictment also charges that in 2012 the Internal Revenue Service (IRS) seized funds from La Centro’s bank accounts due to the alleged structuring activity.  According to the indictment, the United States then filed a civil action to forfeit the funds.  Cerritos appeared as a claimant in the lawsuit.  During the discovery phase of the litigation, he and the other claimants allegedly provided documents to the United States purporting to be sales reports for La Centro for 2011 and 2012, but which allegedly omitted millions of dollars of La Centro’s gross receipts.

An indictment is not a finding of guilt.  Individuals charged in indictments are presumed innocent until proven guilty beyond a reasonable doubt. 

If convicted, Cerritos faces a statutory maximum sentence of three years in prison for each count of obstructing the internal revenue laws and aiding and assisting in the filing of false tax returns and ten years in prison for structuring.  He also faces a period of supervised release, restitution and monetary penalties. 

Acting Deputy Assistant Attorney General Goldberg thanked special agents of IRS Criminal Investigation, who conducted the investigation, and Trial Attorneys Sarah Ranney and Mark Kotila of the Tax Division, who are prosecuting the case.

  

Are you in Trouble with the IRS?

Successful Civil and Criminal Tax Representation Selig & Associates practices 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 FREE legally privileged consultation with a licensed Federal Tax Practitioner and Attorney call Selig & Associates directly (212) 974-3435

Proven Results Selig & Associates successfully resolves IRS & NYS tax problems including: 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 FREE legally privileged consultation with a licensed Federal Tax Practitioner and Attorney call Selig & Associates directly (212) 974-3435

Connecticut Resident Sentenced to Prison for Concealing Assets in Swiss Accounts: He should have hired SELIG & Associates

Tax Problems Solved 

Failed to Report Foreign Financial Accounts with Value Exceeding $28 Million A Greenwich, Connecticut, man was sentenced to six months in prison today for failing to report over $28 million in funds he maintained in Swiss bank accounts to the Department of Treasury, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division, U.S. Attorney Dana J. Boente for the Eastern District of Virginia, and Chief Don Fort, IRS Criminal Investigation (IRS CI).  In pronouncing the sentence, U.S. District Court Judge Brinkema took into consideration Kim’s cooperation with the government, which occurred for more than a five-year span.

According to documents and other information provided in court, Hyong Kwon Kim, a citizen of South Korea and, since 1998, a legal permanent resident of the United States, resided in Massachusetts and later in Connecticut.  Kim, a sophisticated business executive who ran family businesses with operations in the United States and internationally, inherited tens of millions of dollars that he stashed in secret accounts at Credit Suisse, its subsidiaries, and another Swiss bank.  Kim deliberately violated the U.S. bank secrecy laws by failing to report his foreign financial accounts to the Treasury Department.  U.S. citizens, resident aliens, and permanent legal residents with a foreign financial interest in or signatory authority over a foreign financial account worth more than $10,000 are required to file a Report of Foreign Bank and Financial Accounts, commonly known as an FBAR, disclosing the account.

Kim conspired with a host of foreign enablers, including Dr. Edgar H. Paltzer, his Swiss attorney who pleaded guilty in 2013 in the Southern District of New York, and bankers to conceal his assets and income in Swiss accounts held in his own name, the name of a relative, and in the names of sham corporate entities.  Kim schemed with Paltzer and his bankers to structure financial transactions in a manner that allowed him to utilize the funds in the United States, while concealing his ownership and control of the offshore funds.  For example, Kim had checks issued to third parties in the United States in order to purchase a luxury home in Greenwich, Connecticut, a waterfront vacation retreat in Chatham, Massachusetts, and jewelry adorned with multi-carat diamonds, emeralds, and rubies.  In order to conceal his ownership of the vacation home, Kim and Paltzer created a sham entity to hold title to the home.  Kim and Paltzer acted as if Kim rented the home from a fictitious owner.

In 2008, as Credit Suisse closed accounts held in the names of sham entities owned by persons residing in the United States, Kim refused to bring his assets to the United States.  Instead, he transferred his assets to another Swiss bank.  Kim send coded messages from the United States to his Swiss banker in order to maintain control of his account.

Kim ultimately brought his assets to the United States by paying a Swiss jeweler millions of dollars for a ring with a 13.9 carat sapphire and three loose diamonds totaling 13 carats.

Along with failing to report his foreign accounts, Kim also filed false income tax returns for 1999 through 2010 with the IRS, failing to report investment income and failing to disclose the earnings from his holdings in the offshore accounts.

In addition to his term of incarceration, U.S. District Court Judge Brinkema ordered Kim to pay a fine of $100,000 and $243,542 in restitution to the IRS.  Kim, in accordance with his plea agreement, also paid a civil penalty of over $14 million dollars to the U.S. Treasury for his willful failure to file, and willfully filing false, FBARs.  

Principal Deputy Assistant Attorney General Zuckerman, U.S. Attorney Boente and IRS CI Chief Fort commended special agents of IRS CI, who investigated the case, and Senior Litigation Counsel Mark F. Daly and Trial Attorney Robert J. Boudreau of the Tax Division and Assistant U.S. Attorney Mark Lytle of the Eastern District of Virginia, who prosecuted this case.

Are you in Trouble with the IRS?

Successful Civil and Criminal Tax Representation Selig & Associates practices 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 FREE legally privileged consultation with a licensed Federal Tax Practitioner and Attorney call Selig & Associates directly (212) 974-3435

Proven Results Selig & Associates successfully resolves IRS & NYS tax problems including: 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 FREE legally privileged consultation with a licensed Federal Tax Practitioner and Attorney call Selig & Associates directly (212) 974-3435