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Fraud

Tax Court – fraud penalties upheld against auto dealer who failed to report misappropriated funds

Tax Court – fraud penalties upheld against auto dealer who failed to report misappropriated funds

O’Neal, TC Memo 2016-49 The Tax Court has determined that a former auto dealer and his wife failed to report funds that were misappropriated from various businesses that he was involved with, weren’t entitled to claim pass-through losses in respect to entities in which he had no basis, and were liable for fraud penalties for […]

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Washington Alert – APTC face spotlight; TIGTA on IRS Automated Underreporter Program; 3 More Banks enter Swiss Bank Program

Washington Alert – APTC face spotlight; TIGTA on IRS Automated Underreporter Program; 3 More Banks enter Swiss Bank Program

The use of the advance premium tax credit (APTC) provided for by the Affordable Care Act and the administration of the tax credit are now in the spotlight of Sen. Orrin Hatch (R-UT), chairman of the Senate Finance Committee. During July 16 testimony before Hatch’s panel, the Government Accountability Office (GAO) revealed it had conducted […]

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Tax Court: No Fraud Penalty For Taxpayer Who Entered Into Tax Shelter Deals

Tax Court: No Fraud Penalty For Taxpayer Who Entered Into Tax Shelter Deals

Jacoby, TC Memo 2015-67   The Tax Court has ruled that a taxpayer who entered into a “Midco transaction” to convert ordinary income into capital gain income, and who took deductions based on a questionable tax-favored investment product, significantly understated his tax liability but had none of the badges of civil fraud.  Click here for […]

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Restaurant Owner’s Cash Skimming, Other Misdeeds, Were Civil Tax Fraud

Restaurant Owner’s Cash Skimming, Other Misdeeds, Were Civil Tax Fraud

Musa, TC Memo 2015-58 The Tax Court has held that a restaurant owner who did not report significant amounts of cash that he skimmed from his restaurant, lied to his accountant and payroll service company, and committed other misdeeds, was liable for the civil fraud penalty with respect to his entire underpayment. The Court also […]

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Six Corporate Executives And Six Corporate EntitiesIndicted For Orchestrating A $500 Million Offshore Asset Protection, Securities Fraud, And Money Laundering Scheme

Six Corporate Executives And Six Corporate EntitiesIndicted For Orchestrating A $500 Million Offshore Asset Protection, Securities Fraud, And Money Laundering Scheme

As reported in the DOJ Press Release, Six Corporate Executives And Six Corporate EntitiesIndicted For Orchestrating A $500 Million Offshore Asset Protection, Securities Fraud, And Money Laundering Scheme.  The case is E.D.N.Y. Docket No. 14-CR-476 (ILG). Defendants Created Three Brokerage Firms in Belize to Assist U.S. Citizens in Fraudulent Manipulation Schemes of Publicly Traded Companies, […]

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1099 form was fraudulent where payor put restriction on check that payee never cashed

1099 form was fraudulent where payor put restriction on check that payee never cashed

Shiner v. Turnoy, (DC IL 7/11/2014) 114 AFTR 2d ¶ 2014-5054 A district court has held that, where an insurance agent wrote a check to one of his fellow agents to share a commission and wrote on the check that cashing it would release the payor of any future obligation to the payee, the payee […]

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CA 11 splits with other circuits, says Code Sec. 6701 penalty requires proof of fraud

CA 11 splits with other circuits, says Code Sec. 6701 penalty requires proof of fraud

Carlson, (CA 11 6/13/2014) 113 AFTR 2d ¶ 2014-935. The Court of Appeals for the Eleventh Circuit, reversing a district court, has found that in order to impose the penalty under Code Sec. 6701, i.e., the penalty for aiding and abetting the understatement of tax liability, IRS must prove fraud on the part of the […]

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Tax Court upholds negligence penalty against couple, but not fraud penalty

Tax Court upholds negligence penalty against couple, but not fraud penalty

In Flake v. Commissioner, TC Memo 2014-76, the Tax Court has upheld IRS’s determinations with respect to the car and truck expenses that a married couple was entitled to deduct, finding that their records were inconsistent and didn’t support the higher amounts claimed. However, the Court declined to impose a fraud penalty against the couple, […]

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Case Alert – Taxpayers who went along with a tax deduction scheme didn’t commit civil fraud

Case Alert – Taxpayers who went along with a tax deduction scheme didn’t commit civil fraud

Taxpayer victory in Tax Court case of Carreon et al, v. Commissioner, T.C. Memo. 2014-6 – where taxpayers took business tax deductions for amounts for which they merely wrote checks from their business account to other entities that they owned, following a scheme presented to them by various persons, the Tax Court found that no […]

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Court rules on taxpayer’s liability for fraud and fraudulent failure to file penalties

Court rules on taxpayer’s liability for fraud and fraudulent failure to file penalties

The Tax Court has ruled, in Mohamed v. Commissioner, T.C. Memo 2013-255,  that an individual fraudulently underpaid his taxes for one year, that he did not fraudulently underpay his taxes for another year, and that he did not fraudulently fail to file a return for that other year.  This a great case as it thoroughly […]

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TIGTA Report – Income and Withholding Verification Processes are Resulting in the Issuance of Potentially Fraudulent Tax Refunds

TIGTA Report – Income and Withholding Verification Processes are Resulting in the Issuance of Potentially Fraudulent Tax Refunds

TIGTA recently issued its Report – Income and Withholding Verification Processes are Resulting in the Issuance of Potentially Fraudulent Tax Refunds. TIGTA recommended that the IRS ensure that actions are taken to prevent the issuance of potentially fraudulent refunds when tax returns are not timely screened and verified and ensure that case actions are sufficiently […]

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Tax Court clarifies definition of “underpayment” for purposes of computing penalties

Tax Court clarifies definition of “underpayment” for purposes of computing penalties

The Tax Court, in Snow v. Commissioner, (2013) 141 TC No.6, has set out in significant detail how to compute the various elements of the formula contained in Reg. § 1.6664-2(a), i.e., the regulation which defines “underpayment” for purposes of the accuracy-related and fraud penalties. Facts. Mr. Snow’s individual tax return showed that he had […]

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Tax shelter promoter’s fraudulent intent insufficient to keep limitations period open

Tax shelter promoter’s fraudulent intent insufficient to keep limitations period open

The Court of Federal Claims in BASR Partnership v. U.S., (Ct Fed Cl 09/30/2013) 112 AFTR 2d ¶2013-5343, has determined that a final partnership administrative adjustment (FPAA) issued by IRS to a family limited partnership, which was used as part of a tax shelter transaction, was untimely, and that the partnership was entitled to a […]

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Former President of Qualcomm’s Global Business Operations Indicted for Insider Trading

Former President of Qualcomm’s Global Business Operations Indicted for Insider Trading

As announced by the DOJ, Former President of Qualcomm’s Global Business Operations Indicted for Insider Trading, Executive Jing Wang Used Offshore Entities and Secret Brokerage Accounts to Conceal and Disguise Illicit Profits. Jing Wang, 51, of Del Mar, Calif., a former Executive Vice President and President of Global Business Operations for Qualcomm Inc., was charged […]

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Florida Accountant Sentenced to Federal Prison for Two Fraud Schemes

Florida Accountant Sentenced to Federal Prison for Two Fraud Schemes

According to the DOJ Press Release, Joseph Rizzuti, of Stuart, Fla., was sentenced  to 80 months in federal prison for conspiracy to commit wire fraud and for corruptly endeavoring to obstruct the Internal Revenue Service (IRS), the Justice Department and the IRS announced today. According to court documents, Rizzuti, an accountant and the owner of […]

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Former Heber City, Utah, Resident Sentenced to Prison for Filing False Claims for Tax Refunds

Former Heber City, Utah, Resident Sentenced to Prison for Filing False Claims for Tax Refunds

As reported in the DOJ Press Release, the Justice Department and Internal Revenue Service (IRS) announced that April J. Rampton, 42, formerly of Heber City, Utah, was sentenced today to 21 months in prison for filing false claims for income tax refunds.  U.S. District Judge Dee Benson also ordered Rampton to pay $230,678.36 in restitution […]

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Department of Justice Announces Agreement with Liechtenstein Bank to Pay $23.8 Million to Resolve Criminal Tax Investigation

Department of Justice Announces Agreement with Liechtenstein Bank to Pay $23.8 Million to Resolve Criminal Tax Investigation

Per the DOJ Press Release, Liechtensteinische Landesbank AG, a bank based in Vaduz, Liechtenstein (LLB-Vaduz), has agreed to pay more than $23.8 million to the United States and entered into a non-prosecution agreement (NPA) with the U.S. Attorney’s Office for the Southern District of New York.  The NPA provides that LLB-Vaduz will not be criminally […]

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Naples Residents Plead Guilty to Tax Fraud for Failing to Pay Employment Taxes

Naples Residents Plead Guilty to Tax Fraud for Failing to Pay Employment Taxes

As reported by the DOJ, “Naples Residents Plead Guilty to Tax Fraud for Failing to Pay Employment Taxes,” the Justice Department and the Internal Revenue Service (IRS) announced that Anthony Chaudhuri and Margaret Chaudhuri, of Naples, Fla., pleaded guilty to one count each of conspiracy to defraud the United States.  Here is the plea agreement […]

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Brothers who Made ‘Contributions’ to Orthodox Jewish Organizations Plead Guilty to Tax Evasion after Taking Secret Refunds from Groups

Brothers who Made ‘Contributions’ to Orthodox Jewish Organizations Plead Guilty to Tax Evasion after Taking Secret Refunds from Groups

As reported by the Department of Justice press release, two brothers who made tens of thousands of dollars of contributions to charitable organizations operating under the umbrella of a New York-based orthodox Jewish group known as Spinka pleaded guilty today to tax fraud for taking tax deductions for contributions that were refunded by the non-profits. […]

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Owner of Window Installation Business Admits Tax Evasion in New Jersey

Owner of Window Installation Business Admits Tax Evasion in New Jersey

Per the DOJ Press Release, the owner of a window installation company located in Mt.Laurel, N.J. admitted today (June 4) he converted to cash millions of dollars in the company’s gross receipts and used the money to pay his workers without withholding employment taxes announced, Paul J. Fishman, U.S. Attorney for the District of New […]

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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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Member CA Bar Member Orange County Bar US Tax Court Attorney