Fluent in English, Spanish & Italian | 888-882-9243

call us toll free: 888-8TAXAID


Florida Landscaper Trims Taxes With Chainsaw & Pleads Guily to Filing False Returns

According to DoJ, a Stuart man pleaded guilty to filing a false tax return with the Internal Revenue Service (IRS).
Joseph J. Ferry III, 80, pleaded guilty to one count of willfully filing a false corporate income tax return for his company, Ferry Enterprises Inc., for the tax year 2015.
According to court documents, Ferry’s company provided landscaping services under contracts with Martin County and the City of Port Saint Lucie and served residential and commercial customers in the Treasure Coast area.
Ferry filed false tax returns with the IRS, which understated the total income earned by Ferry Enterprises and Ferry himself for tax years 2012 through 2016.
Income generated from Ferry Enterprises was deposited into bank accounts held in the name of the company; however, Ferry used funds from the corporate bank accounts to pay his personal expenses, including payments on his personal mortgage and loans, purchases of firearms, home renovations, and jewelry. Ferry also withdrew more than $2.9 million of cash from the business’ bank accounts.
As part of his plea, Ferry admitted that he also willfully filed false individual income tax returns for the tax years 2011 through 2016.
Ferry Admitted that the Tax Loss for the Years 2011 Through 2016 was $556,396.
Sentencing is set for July 26. Ferry faces a statutory maximum sentence of 3 years in prison, and faces a term of supervised release, restitution, and monetary penalties.
Want to Trim Your Taxes Legitimately?
 Contact the Tax Lawyers at 
Marini& Associates, P.A.  
for a FREE Tax HELP Contact Us at:
or Toll Free at 888-8TaxAid (888) 882-9243  

Read more at: Tax Times blog

LB&I Announces Large Corporate Compliance Program

The Internal Revenue Service announced on May 16, 2019 a key advancement in how it identifies its biggest and most complex large corporations. The IRS's Large Business and International Division (LB&I) began a new application of data analytics for determining the population of its largest and most complex corporate taxpayers. This new Large Corporate Compliance (LCC) program replaces the Coordinated Industry Case (CIC) program and covers compliance oversight for LB&I’s largest corporate taxpayers. LCC is one of LB&I’s portfolio of compliance programs.

LCC employs automatic application of the large case pointing criteria to determine the LCC population. For example, pointing criteria include such items as gross assets and gross receipts.  In the past, this was done on a manual, localized basis. Automated pointing allows a more objective determination of the taxpayers that should be part of the population.

After The Population Is Determined, Data Analytics Is Used To Identify The Returns That Pose The Highest Compliance Risk.

The LCC program further improves LB&I's ability to efficiently focus its resources on noncompliance.

LCC works in tandem with LB&I agents and examiners who apply their experience and expertise in undertaking compliance actions and determining compliance treatment streams of the biggest and most-complex corporate taxpayers. Each enhances the other.

The program includes continuous improvement using an agile model principle to continually monitor and improve based on feedback from stakeholders including field teams, practice networks, and data scientists.

Have a IRS Tax Audit Problem? 

Contact the Tax Lawyers at 
Marini& Associates, P.A. 
for a FREE Tax HELP Contact Us at:

Toll Free at 888-8TaxAid (888) 882-9243

Read more at: Tax Times blog

Bowling Alley Heirs Get Balled Over and Owe $1.3M In Taxes.

According to Law360, a deceased Tennessee man’s estate was liable for $1.3 million in taxes owed by his defunct bowling company since asset transfers to another company were fraudulent, the Sixth Circuit said in a Wednesday affirmation of a U.S. Tax Court decision.

Billy F. Hawk Jr.'s estate is liable for the taxes because Holiday Bowl Inc.’s 2003 sale of assets, bowling alleys, to MidCoast International Inc. was a sham transaction under Internal Revenue Code Section 6901(a) and the Tennessee Uniform Fraudulent Transfer Act, Circuit Judge Jeffrey Stuart Sutton said in the published opinion.

Congress Had Enacted Section 6901(A) To Prevent Delinquent Taxpayers From Avoiding Taxes Through The Transfer Of Assets To Other Entities, Judge Sutton Said.
Under the statute, the government has the authority to pursue the liabilities, relying on state law to determine whether the transferee must pay the taxpayer’s debts, he said.
“The problem by the way is not that the Hawks were trying to lower their taxes,” Judge Sutton said. “The problem is that the transaction lacked economic substance; it was nothing but misleading labels and distracting forms, trompe l’oeil from start to finish.”

The taxes associated with the one-time bowling company were never paid, and it eventually dissolved in 2006, according to the opinion. The Internal Revenue Service examined MidCoast and uncovered not only the Holiday Bowl sale but at least 60 other similar transactions, according to the opinion.

MidCoast, Sequoia Capital LLC, which had originally given money to MidCoast to fund the purported purchase — and a law firm were investigated, Judge Sutton said. As a result, the government launched a civil collection against the Hawks, according to the opinion.

The Tax Court was correct to conclude that Sequoia’s loan to MidCoast was a fake transaction and that Holiday Bowl had merely distributed cash to the Hawks, who were liable for taxes as fraudulent transferees of Holiday Bowl, Judge Sutton said.

MidCoast had received loans from Sequoia, but those loans were issued and repaid on the same day as the MidCoast transaction, according to a November 2017 Tax Court opinion. The stock redemption and the MidCoast transaction failed to hold up under Tennessee’s adoption of the Tennessee Uniform Fraudulent Transfer Act, or TUFTA. Rather, they were part of the same event: a distribution of assets in complete liquidation, according to the order.

The dispute focused on certain transactions made in 2003 related to Holiday Bowl after Hawk died, when the estate sold its shares in the company, which was characterized as a stock sale, to MidCoast Investment Inc. for about $3.4 million, which immediately resold the stock to another third party. However, Holiday Bowl had no operating assets or employees, just cash and tax liabilities, according to court documents.

Nancy Hawk, widow of Billy F. Hawk and co-executor of the estate along with Regions Bank, had argued in August that TUFTA was incorrectly applied in the Tax Court decision. The court was wrong to deem that a loan used to purchase the Holiday Bowl shares was a sham, it incorrectly found that the company was insolvent, and there was no evidence that tax advisers who evaluated the transactions should have suspected tax avoidance, they said.

The U.S. urged the appeals court in November to affirm the Tax Court's decision finding the estate liable for the $1.3 million, saying that under both Section 6901(a) and TUFTA, the estate was transferees. Tennessee law allowed the government to reject Holiday Bowl's original description of a stock sale with MidCoast International Inc., and the Internal Revenue Service could recharacterize the stock sale under the substance-over-form doctrine, according to the U.S.

Have a US Estate Tax Problem?

Estate Tax Problems Require an
Experienced Estate Tax Attorney
Contact the Tax Lawyers at
Marini & Associates, P.A.
 for a FREE Tax Consultation Contact US at
www.TaxAid.com or www.OVDPLaw.com
or Toll Free at 888-8TaxAid (888 882-9243). 


Robert S. Blumenfeld  - 
 Estate Tax Counsel
Mr. Blumenfeld concentrates his practice in the areas of International Tax and Estate Planning, Probate Law, and Representation of Resident and Non-Resident Aliens before the IRS.

Prior to joining Marini & Associates, P.A., he spent 32 years as the Senior Attorney with the Internal Revenue Service (IRS), Office of Deputy Commissioner, International.

While with the IRS, he examined approximately 2,000 Estate Tax Returns and litigated various international and tax issues associated with these returns.As a result of his experience, he has extensive knowledge of the issues associated with and the preparation of U.S. Estate Tax Returns for Resident and Non-Resident Aliens, Gift Tax Returns, Form 706QDT and Qualified Domestic Trusts. 


Read more at: Tax Times blog

Tax Gap Hearings in House NOT Likely to Result in Passable Legislation

House Ways and Means Committee chairman Richard Neal, D-Mass.On May 9, 2019, the House Ways & Means Committee held a hearing about the "tax gap" — the difference between the amount of taxes owed and those paid on time. The IRS needs more revenue officers and resources. 
“The most recent Internal Revenue Service estimate of the annual gross tax gap is about $460 billion and, after enforcement activities and late payments, the net amount is $400 billion a year,” said House Ways and Means Committee chairman Richard Neal, D-Mass., in his opening statement. “Despite this astounding number, the true tax gap is greater than what the IRS estimates. This is because the IRS estimate does not include taxes owed on income from illegal activities or taxes avoided on certain international activities. The tax gap simply represents estimates of different types of noncompliance with our individual, corporate, and other tax laws.”
He pointed out that there is noncompliance in the form of underreporting, which includes taxpayers who understate their income or overstate their deductions, exemptions, or credits. That accounts for nearly $390 billion of the gross tax gap. Noncompliance by taxpayers who file their tax returns but fail to meet the deadline to pay what they owe accounts for about $40 billion of the gross tax gap.Then noncompliance by taxpayers who are required to file a tax return, but don’t accounts for about $32 billion of the gross tax gap. Neal pointed out that the amount of the tax gap that the IRS can collect depends on its funding and resources.  

“Insufficient IRS funding creates incentives for some taxpayers to take aggressive tax positions,” he said.



“Well-advised taxpayers, including multinational companies and high-income taxpayers, have the incentives and the resources to do just that.”  
While high-income taxpayers have the most opportunity to engage in tax avoidance planning, the IRS isn’t focusing its audits on them. “Instead, in 2017, the IRS targeted low-income, Earned Income Tax Credit taxpayers,” said Neal. “Many question why the IRS is using its limited resources in this manner rather than deploying them on high-income taxpayers and corporations where the return is greater per hour of a revenue agent’s time.

Taxpayers are more compliant when they may be audited. 
 But the overall audit rate has plummeted below .005. 

  • IRS examination personnel have decreased by nearly 5,000 employees or 38 percent over seven years, and
  • IRS revenue officers have decreased by over 1,600 employees or 42 percent during the same period.  

This All May Well Be an Academic Exercise,

As Any Bill Has Almost No Chance of Passing a
Republican-Controlled Senate, Let Alone a Republican President, Who Has Been under Audit Every Year.

J. Russell George, inspector general at TIGTA, presented a report on the tax gap and taxpayer noncompliance and pointed to some of TIGTA’s earlier reports on taxing the gig economy. In a report evaluating the gig economy’s impact on self-employment tax compliance, TIGTA reported that cases with billions of dollars in potential tax discrepancies involving taxpayers who earn income in the gig economy are not being worked by the IRS,” he said.


“Many cases were not selected to be worked by the IRS due to the large volume of discrepancies that were identified
and resource constraints.
In addition, a lack of an overall gig economy compliance strategy led IRS employees to remove thousands of cases from inventory without justification or with justifications
that were inaccurate.”
James R. McTigue, Jr., director of strategic issues at the Government Accountability Office, also presented a report by the GAO on how multiple strategies are needed to address taxpayer noncompliance. “GAO’s work has demonstrated that no single approach will fully and cost effectively address noncompliance since the problem has multiple causes and spans different types of taxes and taxpayers,” said the report. For example, expanding third-party information reporting could increase voluntary compliance and providing IRS with the authority to regulate paid tax return preparers could improve the accuracy of the tax returns they prepare.”  

Need an Reliable Tax Planning?
 Contact the Tax Lawyers at 
Marini& Associates, P.A.  

for a FREE Tax HELP Contact Us at:

or Toll Free at 888-8TaxAid (888) 882-9243 



Rep Tom Suozzi

Read more at: Tax Times blog