Category Archives: criminal tax law

On March 25, 2020 we posted, IRS Unveils New COVID-19 Temporarily Suspension of Key Compliance Efforts in People First Initiative, where we discussed that to help people facing the challenges of COVID-19 issues, the Internal Revenue Service announced in IR-2020-59 on March 25, 2020 a sweeping series of steps to assist taxpayers by providing relief on a variety of issues ranging from easing payment guidelines to postponing compliance actions.

Since then we have had the following developments in tax collection due to the COVID-19:

• 3/27/2020: President signs the “Coronavirus Aid, Relief, and Economic Security Act” (“CARES Act”), which suspends offsets for stimulus payments
• 3/27/2020: IRS begins temporarily accepting scanned or photographed images of signatures and digital signatures on certain documents related to collection
• 3/31/2020: IRS issues Notice 2020-22 providing relief from penalty for failure to deposit employment taxes
• 4/1/2020: IRS officially announces the closure of Priority Practitioner Service (“PPS”), the closure of most offices, the cancellation of almost all face-to-face assistance, and the temporary reduction of live telephone assistance 
• 4/3/2020: IRS issues Frequently Asked Questions regarding Direct Debit Installment Agreements

Now the IRS has extended more tax deadlines to cover individuals, trusts, estates, corporations in IR 2020-66, 4/9/2020 & Notice 2020-23, 2020-18 IRB. The IRS has extended more tax deadlines to cover individuals, estates, corporations and others. This extension includes a variety of tax form filings and payment obligations that are due between April 1, 2020 and July 15, 2020, including estimated tax payments due June 15 and the deadline to claim refunds from 2016. The Notice also suspends associated interest, additions to tax, and penalties for late filing or late payment until July 15, 2020.

The new relief includes extending the following filing and payment deadlines:

• Individual income tax payments and return filings on 1040-NR, U.S. Nonresident Alien Income Tax Return, 1040-NR-EZ, U.S. Income Tax Return for Certain Nonresident Aliens With No Dependents, 1040-PR, Self-Employment Tax Return - Puerto Rico, and 1040-SS, U.S. Self-Employment Tax Return (Including the Additional Child Tax Credit for Bona Fide Residents of Puerto Rico); 

• Calendar year or fiscal year corporate income tax payments and return filings on Form 1120, U.S. Corporation Income Tax Return, 1120-C, U.S. Income Tax Return for Cooperative Associations, 1120-F, U.S. Income Tax Return of a Foreign Corporation, 1120-FSC, U.S. Income Tax Return of a Foreign Sales Corporation, 1120-H, U.S. Income Tax Return for Homeowners Associations, 1120-L, U.S. Life Insurance Company Income Tax Return, 1120-ND, Return for Nuclear Decommissioning Funds and Certain Related Persons, 1120-PC, U.S. Property and Casualty Insurance Company Income Tax Return, 1120-POL, U.S. Income Tax Return for Certain Political Organizations, 1120-REIT, U.S. Income Tax Return for Real Estate Investment Trusts, 1120-RIC, U.S. Income Tax Return for Regulated Investment Companies, 1120-S, U.S. Income Tax Return for an S Corporation, and 1120-SF, U.S. Income Tax Return for Settlement Funds (Under Code Sec. 468B); 

• Calendar year or fiscal year partnership return filings on Form 1065, U.S. Return of Partnership Income, and Form 1066, U.S. Real Estate Mortgage Investment Conduit (REMIC) Income Tax Return;

• Estate and trust income tax payments and return filings on Form 1041, U.S. Income Tax Return for Estates and Trusts, 1041-N, U.S. Income Tax Return for Electing Alaska Native Settlement Trusts, and 1041-QFT, U.S. Income Tax Return for Qualified Funeral Trusts;

• Estate and generation-skipping transfer tax payments and return filings on Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return, 706-NA, United States Estate (and Generation-Skipping Transfer) Tax Return, 706-A, United States Additional Estate Tax Return, 706-QDT, U.S. Estate Tax Return for Qualified Domestic Trusts, 706-GS(T), Generation-Skipping Transfer Tax Return for Terminations, 706-GS(D), Generation-Skipping Transfer Tax Return for Distributions, and 706-GS(D-1), Notification of Distribution from a Generation-Skipping Trust (including the due date for providing such form to a beneficiary);

• Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return filed pursuant to Revenue Procedure 2017-34; 

• Form 8971, Information Regarding Beneficiaries Acquiring Property from a Decedent and any supplemental Form 8971, including all requirements contained in Code Sec. 6035(a); 

• Gift and generation-skipping transfer tax payments and return filings on Form 709, United States Gift (and Generation-Skipping Transfer) Tax Return that are due on the date an estate is required to file Form 706 or Form 706-NA;

• Estate tax payments of principal or interest due as a result of an election made under Code Sec. 6166, Code Sec. 6161, or Code Sec. 6163 and annual recertification requirements under  Code Sec. 6166;

• Exempt organization business income tax and other payments and return filings on Form 990-T, Exempt Organization Business Income Tax Return (and proxy tax under Code Sec. 6033(e));

• Excise tax payments on investment income and return filings on Form 990-PF, Return of Private Foundation or Code Sec. 4947(a)(1) Trust Treated as Private Foundation, and excise tax payments and return filings on Form 4720, Return of Certain Excise Taxes under Chapters 41 and 42 of the Internal Revenue Code; and 

• Quarterly estimated income tax payments calculated on or submitted with Form 990-W, Estimated Tax on Unrelated Business Taxable Income for Tax-Exempt Organizations, 1040-ES, Estimated Tax for Individuals, 1040-ES (NR), U.S. Estimated Tax for Nonresident Alien Individuals, 1040-ES (PR), Estimated Federal Tax on Self Employment Income and on Household Employees (Residents of Puerto Rico), 1041-ES, Estimated Income Tax for Estates and Trusts, and 1120-W, Estimated Tax for Corporations.

This relief includes not just the filing of Specified Forms, but also all schedules, returns, and other forms that are filed as attachments to Specified Forms or are required to be filed by the due date of Specified Forms, including, for example, Schedule H and Schedule SE, as well as Forms 3520, 5471, 5472, 8621, 8858, 8865, and 8938.

This relief also includes any installment payments under section 965(h) due on or after April 1, 2020, and before July 15, 2020. Finally, elections that are made or required to be made on a timely filed Specified Form (or attachment to a Specified Form) shall be timely made if filed on such Specified Form or attachment, as appropriate, on or before July 15, 2020. 

This relief is automatic. Taxpayers do not have to call the IRS or file any extension forms, or send letters or other documents to receive this relief. 

The Notice also suspends associated interest, additions to tax, and penalties for late filing or late payment until July 15, 2020.

Can't Pay Your Taxes?

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

 

So far, the IRS has postponed until July 15 federal income tax returns and payments (including self-employment tax payments) due April 15, 2020, for 2019 tax years, and estimated income tax payments due April 15, 2020, for 2020 tax years. The IRS has expanded that postponement to include gift and generation-skipping transfer (GST) taxes and returns. The AICPA has recommended that the IRS should expand relief to all types of returns and payments due between March 3 and July 15.

 

Need to Obtain IRS Relief during
The Coronavirus (COVID-19) Epidemic?

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) 

It is time for people to wake up and realize that “Quiet” Disclosures really don't make sense in light of the Streamline Voluntary Disclosure Program, which may not be available much longer.

According to DoJ, Lake Worth Businessman Pleads Guilty to Evading Taxes on Millions in Income, Stashing Funds in Secret Accounts Around the World.

 

 

He Tapped Hidden Accounts

To Buy $1.3 Million Yacht And Waterfront Property

and Filed a False “Quiet” Disclosure

A Lake Worth, Florida, businessman pleaded guilty today to tax evasion and willful failure to file a Report of Foreign Bank or Financial Account, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division and U.S. Attorney Ariana Fajardo Orshan for the Southern District of Florida.

According to court documents and statements made in court, Dusko Bruer owned and operated a company that bought U.S.-made agricultural machinery and parts and sold them throughout the world. Beginning in 2003, the company did not pay Bruer a salary. Instead, Bruer used millions of dollars from the company’s bank accounts to pay his personal expenses, make investments abroad, and make transfers to an employee and his family.

From 2007 through 2011, Bruer transferred over $5.8 million of the company’s profits to foreign financial accounts. Bruer used the company’s profits to buy a yacht, purchase a waterfront home for his girlfriend and himself, purchase a home for an employee, and buy real property in Serbia. Between 2007 and 2014, Bruer failed to report more than $7.7 million in income and did not pay taxes of more than $2.7 million that were due to the United States.

Although Bruer’s company had a number of employees and reaped millions of dollars in profits, Bruer never filed a corporate tax return for the company nor did the company ever pay taxes on its income. Bruer also never filed employment tax returns during those years reporting wages that the company paid to its employees nor did the company withhold and pay over payroll taxes. From 2007 through 2015, Bruer maintained financial accounts in Croatia, Germany, Serbia, and Switzerland. He did not report his ownership of the accounts to the Financial Crime Enforcement Network (FinCEN) by filing a Report of Foreign Bank or Financial Account (FBAR), despite knowing he had an obligation to do so. In 2010, an account he held at a subsidiary of Credit Suisse AG in Zurich, Switzerland reached a year-end high value of $6,177,586. Bruer used the assets in his foreign accounts for personal use, including the purchase of a yacht for $1,350,000 and a 3,200 square foot home in Lake Worth, Florida, with 100 feet of waterfront frontage for approximately $1,650,000.

From 1999 to 2014, Bruer never filed a personal tax return nor did he pay tax on his income. In 2015, Credit Suisse closed his account in Switzerland and advised him to enter the IRS’s Offshore Voluntary Disclosure Program (OVDP), by which taxpayers could avoid criminal prosecution by making a voluntary disclosure directly to IRS-Criminal Investigation, filing six years of delinquent or amended income tax returns, as well as delinquent or amended FBARs, paying back taxes, interest, and certain penalties on the six tax years in the disclosure period, and paying a penalty on the highest aggregate account balance of their noncompliant offshore assets.

Bruer Did Not Enter Into The OVDP Because He

Determined That The Cost Would Be Too High?

(Really?#*)

Do You Value Your Freedom? 

Instead, Bruer made a “quiet” disclosure that involved filing several delinquent tax returns with the IRS, not flagging the returns in anyway or paying the taxes, penalties and interest that would be paid in OVDP.

The Returns Bruer Filed As Part of His “Quiet” Disclosure Were False Because They Disclosed Only The Funds He Held In The Credit Suisse Account and Not The Funds He Held In The Accounts In Croatia, Germany, Serbia, Nor Did They Report The Income He Earned From His Company.

United States District Court Judge Senior District Judge Kenneth A. Marra scheduled sentencing for June 12, 2020. Bruer faces:

• a maximum sentence of five (5) years in prison for each charge,
• three years (3) of supervised release,
• restitution, and
• monetary penalties.

 As you can see, the "Quiet" Disclosure really work well for this taxpayer - NOT!

 

Do You Have Undeclared  Offshore Income?

Is Your Name Being Handed Over to the IRS?

  

Want to Know if the OVDP Program is Right for You? 

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