Monthly Archives: September 2020

We previously posted On February 19, 2020, Former U.S. Taxpayer Pleads Guilty in Panama Papers Investigation, where we discussed that a former U.S. resident and taxpayer who was charged along with three others in connection with a decades-long criminal scheme perpetrated by Mossack Fonseca & Co. (Mossack Fonseca), a Panamanian-based global law firm, and its related entities, pleaded guilty on February 18, 2020 to wire and tax fraud, money laundering, false statements and other charges. 

Harald Joachim von der Goltz, aka “H.J von der Goltz,” “Johan von der Goltz,” “Jochen von der Goltz,” “Tica,” and “Tika,” 82, a citizen of Germany and Guatemala who last resided in Needham, Massachusetts, and Key Biscayne, Florida, pleaded guilty to one count of conspiracy to commit tax evasion, one count of wire fraud, one count of money laundering conspiracy, four counts of willful failure to file reports of foreign bank and financial accounts (Financial Crimes Enforcement Network Reports 114) and two counts of false statements. 

A Manhattan federal judge on September 21, 2020 sentenced Harald Joachim von der Goltz to Four (4) Years In Prison for his long-standing efforts to evade U.S. taxes, which were exposed by the "Panama Papers" document leak from the Mossack Fonseca law firm.

U.S. District Judge Richard M. Berman also fined him $30,000 and ordered him to pay $3.4 million in restitution to the U.S. after the 83-year-old admitted in February to nine criminal counts, including tax evasion from 2000 to 2016, fraud and making false statements.

"These are very serious offenses," said Judge Berman, noting that von der Goltz began breaking the law in his 60s. "The crimes occurred here over a very long period of time. We can't lose sight of that."

"I am Here Before you Humbled and Disgraced with a
Broken Heart," said von der Goltz.

He also faces a potentially significant IRS penalty of about $2.5 million. "The simple truth is I broke the law."

But prosecutor Nathan Rehn said von der Goltz should not derive any "advantage" at sentencing for an "egregious" crime as a result of his advanced age, because he turned up his nose at an IRS amnesty offer and kept lying before he was arrested in the U.K. and extradited to the U.S. in 2018.

Judge Berman's sentence came in below official guidelines that called for one in the range of nine years. Prosecutors had said a sentence of that length wasn't necessary, but asked for a significant period of incarceration.

Toward the end of the 2½-hour sentencing, which was conducted via videoconference, Judge Berman said the sentence came in "remarkably below" guidelines, but a home confinement sentence was not possible.

Having Then Been Given An Opportunity To Say A Final Word, Von Der Goltz Called The Prison Term "Devastating.
I Do Think I'll Die In Jail," He Said.

"At least I was able to have 83 years of the things that I did in life that I'm proud of. I'm sorry it ended up this way. But it is what it is."

Unless the defense prevails on a request to delay his surrender, von der Goltz will report to custody in 60 days, Judge Berman said.

In a statement, acting Manhattan U.S. Attorney Audrey Strauss said von der Goltz was "abetted by the specialized criminal services of the law firm Mossack Fonseca" to rip off the IRS.

Read more at: Tax Times blog

According to Accounting Today, the Sept. 15 tax filing deadline is causing worries among taxpayers and tax practitioners in the midst of the pandemic, but the American Institute of CPAs believes that taxpayers will be able to avoid tax penalties if they write “COVID-19” at the top of their tax return.

AICPA officials have had some conversations with IRS officials about penalty relief and been told informally that practitioners who have made a good-faith effort to meet the filing deadlines on behalf of their clients but are unable to do so because of the coronavirus pandemic can write “COVID-19” at the top of the tax return to indicate the need for penalty relief. 

“Based on our conversations, the IRS does not want to penalize people who are making a good faith effort,” said Melanie Lauridsen, senior manager for tax policy and advocacy at the AICPA. 

“I Think The IRS Truly Does Understand That People
Are Impacted By Coronavirus, And Unfortunately
 Some People Are Impacted To The Point
Where They Just Can’t Meet The Tax Deadlines."

"They don’t want to penalize people who are really trying to do what’s right, trying to meet their compliance, but for whatever reason due to coronavirus they are unable to do so. I think the IRS wants to work with those people and not penalize them.”

She isn’t sure whether the IRS will offer formal relief or guidance, but she pointed to the other forms of disaster relief the IRS has offered in response to the pandemic as well as natural disasters. 

“At any given point in time with disaster relief, it actually ties in with reasonable cause,” she said. “Whether a disaster is deemed to get an extension or not, there will always be people who can’t meet the deadlines and, under reasonable cause, they are able to work with the IRS to see if they can not be penalized. This is more in line with that.” 

An IRS Spokesperson Contacted By Accounting Today
Pointed To The Penalty Relief Due To Reasonable Cause
Page on IRS.gov.

“As always, facts and circumstances are important in any penalty determination,” said a statement from the IRS spokesperson. “We understand the challenges faced by taxpayers due to the pandemic, and IRS remains flexible in granting penalty relief where taxpayers can demonstrate good-faith efforts in filing their returns.” 

Where every other aspect of the taxpayer's business administratively operated unaffected by the coronavirus, then don't be surprised that the IRS does not accept that the coronavirus resulted in reasonable cause for the late filing, as may be the case with other natural disasters or other disturbances.

Lauridsen noted those reasonable cause provisions are also a part of the Internal Revenue Manual used by the IRS. “If you look at the reasonable cause standards, it’s very clear,” she said. “The reasonable cause standards are found within the IRM, which is the IRS’s Internal Revenue Manual, and in it they say that any matter that establishes a taxpayer exercised ordinary business care and prudence but that nevertheless failed to comply with the tax law may be considered for relief. So if that’s the case, and coronavirus is definitely something that is impacting millions of Americans, and the taxpayer is making a good faith effort, but they still failed to meet the tax laws, then yes, the IRS will work with them.” 

“Reasonable cause is not a blanket like, ‘Oh, hey, I’ve been a little stressed and I don’t feel like doing the tax return so therefore I’m going to fill out COVID-19.’ But if they are impacted by coronavirus, then yes the IRS will work with them,” said Lauridsen.

She believes this will help relieve some of the stress on taxpayers and practitioners. “When you talk with people who are devastated by coronavirus, it’s heartbreaking,” she said. “I spoke with one member who said it affected five or six people [in his office]. One of his staff got coronavirus and gave it to two or three other people within the office. Then on top of that the spouse of one of the partners or staff passed away during this whole thing. You’re looking at a business that is impacted at such deep levels. How can they manage? This is relief that is absolutely necessary. It’s not even relief to alleviate the burden. They’re working around the clock and there’s no way they can meet these deadlines.” 

Taxpayers and firms who are filing electronically may need to check with their tax software provider to make sure they can add the COVID-19 note to the top of the form. It will probably be an option as the IRS has already allowed taxpayers to append that note as part of the relief it offered earlier during the pandemic, in conjunction with what was offered by the Federal Emergency Management Agency. 

“With coronavirus, the relief was provided for the April to the July 15 deadline, so FEMA did put out COVID-19 relief already,” said Lauridsen. “I would recommend to the practitioners for whatever software you’re working with to give them a call, because some of the software companies are already coded for COVID-19, not specifically for this scenario. However if they connect with their software provider and their e-filer, they can get COVID-19 written at the top of the return, and that will indicate to the IRS that they do need some relief.”

 Contact the Tax Lawyers at 

Marini& Associates, P.A. 

 

 

for a FREE Tax Consultation at: 

www.TaxAid.com or www.OVDPLaw.com 
or Toll Free at 888-8TaxAid (888) 882-9243

Read more at: Tax Times blog

According to Law360, The Internal Revenue Service has seized property from individuals suffering economic hardships, violating a federal tax law requiring the agency to release levies causing financial difficulties, the Treasury Inspector General for Tax Administration said in a recent report.

The IRS agreed to develop new training to stress that agents tasked with property seizures must confirm that taxpayers' levies are valid. 

TIGTA reviewed 60% of the seizures that the IRS conducted between July 2018 and June 2019, and found examples where the agency failed to release levies against taxpayers who were dealing with economic hardships and seized assets including personal residences. 

Under Internal Revenue Code Section 6343, The IRS Is Required To Release Levies Against Those Who May Be
Suffering Economic Hardships.

In the report, the IRS agreed with TIGTA recommendations that the agency develop new training to stress that agents tasked with conducting property seizures properly confirm that those taxpayers' levies are valid. The IRS also agreed to stress to its agents that any proceeds from the sale of seized assets must be immediately applied to that taxpayer's account to satisfy their deficiencies, and pledged to better inform IRS employees of notice requirements associated with property seizures.

The IRS disagreed with two of TIGTA's recommendations to issue additional guidance to prevent seizures on taxpayers suffering economic hardships and another to require IRS agents to document discussions they have with interagency officials about whether a taxpayer is protected from a property seizure. The IRS told TIGTA that those protocols are already included in the Internal Revenue Manual and preseizure checklist, according to the report.

TIGTA said that the IRS' failure to change its rules could lead to additional taxpayers losing their homes. 

If They Hold Equity In Assets Such As A Personal Residence, According To The TIGTA Report.

In a number of seizures, the IRS didn't properly follow its protocol, failing to perform required research on those taxpayers who have levies against them or give those taxpayers sufficient notice, according to the report. A majority of seizures focused on taxpayers' "other real property," according to the TIGTA report, but several seizures also involved vehicles and personal residences.

TIGTA Did Find That The IRS Followed Its Protocols and
Didn't Seize Property When Taxpayers Had Filed
A Timely Request For An 
Appeals Hearing For Collection Due Process.

The IRS also sufficiently adhered to the guidelines it had set in scaling back collection and enforcement actions during the novel coronavirus pandemic between March and July, according to the report.

During the time in which the IRS suspended some of its enforcement and collection activities, the agency conducted three seizures, but TIGTA found they were proper in order to "protect the government's interest in collection of significant delinquent amounts due," according to the report.

 Contact the Tax Lawyers at 

Marini& Associates, P.A. 

 

 

for a FREE Tax Consultation at: 

www.TaxAid.com or www.OVDPLaw.com 
or Toll Free at 888-8TaxAid (888) 882-9243

Read more at: Tax Times blog

According to Offshore Bankers Oleg Tinkov is a self-made Russian billionaire with a penchant for private jets and luxury homes around the globe that bear his name, just like the online bank he founded.

Have an IRS Tax Problem?

 Contact the Tax Lawyers at
Marini & Associates, P.A. 

for a FREE Tax HELP Contact us at:
www.TaxAid.com or www.OVDPLaw.com
or Toll Free at 888 8TAXAID (888-882-9243) 

Read more at: Tax Times blog