When it comes to catching cheats, the IRS is no respecter of persons or corporations. It does not matter whether you are an individual or a multinational corporation or a local government agencies, as the Cicero Local Development Corporation (CLDC) found out to its detriment.
In 1999, the CLDC obtained a donated piece of land in Cicero, New York and subsequently planned to develop it into a multi-purpose project comprising of a community center, recreational facilities, municipal buildings, commercial and residential areas. To fund the ambitious "Cicero Commons" project, $15 million of municipal bonds were issued. But the project went awry in 2003 when the developers defaulted on the bonds.
But the story does not end there.
Subsequent investigations unearthed evidence of more irregularities in the selection of certain sub-contractors and the financial picture portrayed to the Cicero Town Board and the rating agency for the Cicero Commons project. Furthermore, the CLDC also did not inadequately or properly notify the Cicero Town Board when the revenue from the project was not enough to pay for the bond interest payments which were guaranteed by the Town on a yearly basis. On March 20, 2009, the CLDC entered its guilty plea to making false and misleading statements to the IRS in how it selected its developer.
Subsequently, the US District court sentenced the CLDC, ordering it to pay a fine of $390,000 and imposed a two-year probation. In his judgment, Judge Norman Mordue directed the CLDC to make financial reports to the US Probation Office every month as it dissolves itself. All monies received by the CLDC during the dissolution period are to be utilized to pay the fine.
As a result, the Metropolitan Development Association (MDA), which had assisted the CLDC in the Cicero Commons project, has henceforth implemented strict checks and balances in procedures to avoid favoritism in appointing contractors and ensure transparency for all its future projects.
Darrin T. Mish is a veteran, nationally recognized tax attorney who has focused on providing IRS help to taxpayers for over a decade. He regularly travels the country training other attorneys, CPAs and enrolled agents on how to handle their toughest cases with the IRS. He is highly ranked among the top attorneys in the country, with an AV rating from Martindale-Hubbell and a perfect 10 on Avvo.com. Martindale-Hubbell has also honored him with a listing in their Bar Register of Preeminent Lawyers. He is a member of the American Society of IRS Problem Solvers and the Tax Freedom Institute. With clients on every continent but Antarctica, he has what it takes to solve your IRS problems no matter where you live in the world. If you would like more information about his practice and how he can help you, please call his office at (813) 229-7100 or toll free at 1-888-GET-MISH.