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Abusive Trust Schemes

Tax Court Strikes Down Son-Of-Boss Shelter And Imposes Penalty

Tax Court Strikes Down Son-Of-Boss Shelter And Imposes Penalty

436 LTD, Heitmeier, TC Memo 2015-28 The Tax Court has determined that a partnership that engaged in a complicated series of transactions that constituted a Son-of-BOSS tax shelter designed to create artificial losses should be disregarded for U.S. tax purposes. The Court disallowed most of the losses claimed by the taxpayer on the grounds that […]

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Tax Court: reportable transactions penalty based on tax shown on original return

Tax Court: reportable transactions penalty based on tax shown on original return

Yari, (2014) 143 TC No. 7 The Tax Court, in a case of first impression, has determined that the reportable transactions penalty under Code Sec. 6707A is calculated in reference to the amount of tax shown on the return on which the taxpayer was obliged but failed to disclose the reportable transaction, rejecting the taxpayer’s […]

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Fifth Circuit disallows $1 billion in deductions from abusive tax shelters

Fifth Circuit disallows $1 billion in deductions from abusive tax shelters

Chemtech Royalty Associates, L.P. v. U.S., (CA 5 9/10/2014) 114 AFTR 2d ¶ 2014-5234 The Court of Appeals for the Fifth Circuit, affirming the district court, has concluded that two transactions entered into by Dow Chemical Company that resulted in approximately $1 billion in deductions should be disregarded for tax purposes. The transactions lacked economic […]

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Federal Court in California Shuts Down Tax Preparer John Trunzo, operating as “Your Taxman John Trunzo,” “Your Taxman” and “YTJT”

Federal Court in California Shuts Down Tax Preparer John Trunzo, operating as “Your Taxman John Trunzo,” “Your Taxman” and “YTJT”

As reported in the news of the Department of Justice, a federal court in Los Angeles has entered an order permanently barring John Trunzo from preparing federal income tax returns and other tax-related documents for others, the Justice Department announced today. Trunzo, who operated under the business names “Your Taxman John Trunzo,” “Your Taxman” and […]

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Federal Court in California Shuts Down Tax Preparer Simon Jenkins, Jenkins Tax Service

Federal Court in California Shuts Down Tax Preparer Simon Jenkins, Jenkins Tax Service

As reported in the news of the Department of Justice, a federal court in Los Angeles has entered an order permanently barring Simon Jenkins from preparing federal income tax returns and other tax-related documents for others, the Justice Department announced today. Jenkins, who operated under the business name “Jenkins Tax Service” in Gardena, California, consented […]

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Manhattan U.S. Attorney Announces Agreement With Ernst & Young LLP To Pay $123 MillionTo Resolve Federal Tax Shelter Fraud Investigation

Manhattan U.S. Attorney Announces Agreement With Ernst & Young LLP To Pay $123 MillionTo Resolve Federal Tax Shelter Fraud Investigation

As announced by the Department of Justice Press Release of Friday, March 1, 2013, Ernst & Young LP commits to certain permanent restrictions and to continued cooperation with the Government’s Investigation.  Here’s the Press Release. Preet Bharara, the United States Attorney for the Southern District of New York, Steven Miller, the Acting Commissioner of the […]

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Ernst & Young to pay $123 million dollars to resolve US tax shelter probe

Ernst & Young to pay $123 million dollars to resolve US tax shelter probe

As reported in Reuters, Ernst & Young agreed to pay $123 million to resolve a federal investigation into its role developing and marketing tax shelters that helped its clients avoid more than $2 billion in tax liabilities, the U.S. government said.  As part of the settlement, announced by the Manhattan U.S. Attorney’s Office, the accounting […]

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Justice Department Sues Nevada CPA to Block Promotion of Alleged Tax Fraud Scheme

Justice Department Sues Nevada CPA to Block Promotion of Alleged Tax Fraud Scheme

As announced in the press release of the Department of Justice on December 12, 2012, the United States has sued a Las Vegas-based CPA and two others to stop an alleged tax-fraud scheme. According to the Press Release, named as defendants in the civil injunction suit were CPA Wayne Reeves, Reeves’ wife, Diane Vaoga, and […]

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Tax Court in Hristov holds that reliance on professional does not meet reasonable cause to avoid accuracy related penalties

Tax Court in Hristov holds that reliance on professional does not meet reasonable cause to avoid accuracy related penalties

Editor’s Note:  this is a good example of a case which sought to abate penalties based upon reasonable cause and reliance on a professional. In hindsight, it is a good case that should not have been litigated since there were many, many problems.  It is, nevertheless, illustrative of what the Courts look for in determining […]

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Swiss Bankers Are Afraid To Leave Switzerland – IRS and Department of Justice Making an Impact

Swiss Bankers Are Afraid To Leave Switzerland – IRS and Department of Justice Making an Impact

Editor’s Note:  well, the IRS and Department of Justice enforcement side seems to be doing the job.  I ran across this article entitled “Swiss Bankers are Afraid to Leave Switzerland” as reported in the Huffington Post and found myself chuckling at the thought that Swiss bankers are afraid of being arrested by IRS and DOJ […]

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Gupta found guilty as reported by several news agencies

Gupta found guilty as reported by several news agencies

A federal jury convicted Rajat Gupta, once an executive and board member at the pinnacle of American business, of insider trading, capping the fall of the most prominent figure caught in the government’s drive to stop the leaking of corporate secrets to Wall Street, as reported by news agencies, one of which is the WSJ, […]

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Case Alert: U.S. Supreme Court finds that a basis overstatement is not the same as income omission for 6-year limitations period

Case Alert:  U.S. Supreme Court finds that a basis overstatement is not the same as income omission for 6-year limitations period

Editor’s Note:  frequently Clients ask me how long the IRS has to “audit” them.  The general rule is 3 years from the date of the filing of their tax return.  If fraud is present, the statute to audit is open ended. If a taxpayer “omits” income greater than 25% of their reported gross, then the […]

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Rand Paul Seeks to Block Tax Treaty Account on Swiss Accounts

Rand Paul Seeks to Block Tax Treaty Account on Swiss Accounts

Editor’s Note:  I read an interesting article entitled “Rand Paul Seeks to Block Tax Treaty Account on Swiss Accounts,” as noted by Bloomberg Businessweek.com.  The article provides a good overview of what has been happening with the exchange of information between the U.S. and Swiss taxing authorities.  We have written many articles and pages on […]

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IRS Alert!: Seven Tips to Help Taxpayers Avoid Phony Refund Schemes Abusing Popular College Tax Credit

IRS Alert!:  Seven Tips to Help Taxpayers Avoid Phony Refund Schemes Abusing Popular College Tax Credit

Seven Tips to Help Taxpayers Avoid Phony Refund Schemes Abusing Popular College Tax Credit The Internal Revenue Service offers the following seven tips to help taxpayers avoid an emerging scheme tempting senior citizens and other taxpayers to file tax returns claiming fraudulent refunds. These schemes promise refunds to people who have little or no income […]

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IRS Releases the Dirty Dozen Tax Scams for 2012

IRS Releases the Dirty Dozen Tax Scams for 2012

IRS Releases the Dirty Dozen Tax Scams for 2012 IRS YouTube Videos: Dirty Dozen: English | Spanish | ASL WASHINGTON –  The Internal Revenue Service recently issued its annual “Dirty Dozen” ranking of tax scams, reminding taxpayers to use caution during tax season to protect themselves against a wide range of schemes ranging from identity […]

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Meet Paul Raymond

Meet Paul Raymond

Mr. Raymond is a sought after speaker in tax controversy law by many attorney, accountant, and business groups and at the request of the Internal Revenue Service, has presented programs at the IRS Nationwide Tax Forum, attended by tax professionals throughout the United States.

Additionally, he continues to be an active member in the Section of Taxation, American Bar Association, where he was the Past Chair of the Employment Taxes Committee.

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