Small Cheat, Big Cheat
Here's the story of a tax cheat.
An ex-IRS agent who ran an income tax preparation service, Anthony Pendleton, 59 was convicted on Friday of conspiring to defraud the US government through the filing of false claims.
In their business called Payless Tax Services, Pendleton and two other employees conspired to file claims for their clients for which they were not entitled. The refund claims involved making falsified employment income and false dependents. With the authority of a search warrant, IRS investigators raided the business premises of Payless and recovered many documents and records that indicate such a crime was going on.
Sentence of the crime will be made by US District Judge Otis D. Wright II on November 23rd. Pendleton, of Los Angeles faces a maximum penalty of 10 years' imprisonment in a federal penitentiary and a potential fine of $250,000 or twice the gross gain or loss, whichever is greater.
But here's the case of an even bigger cheat.
In the first case since the resolution of the IRS UBS standoff, one of the UBS bank account holders has entered a plea of 'guilty'.
After months of demands, lawsuits, threats and counter-threats between the IRS and Swiss bank UBS over the details of about 52,000 wealthy American account holders suspected of using their Swiss bank accounts to evade taxes, the two sides finally came to an agreement last Wednesday. Although details of the agreement were not disclosed it is widely believed to include the disclosure of names of thousands of American account holders by the bank. This enables the IRS to investigate them for tax evasion.
John McCarthy is the first person to be publicly named and when confronted with the charges, he promptly entered a plea agreement agreeing to plead guilty. McCarthy deposited more than $1 million into his Swiss bank account held under the name of his company, COGS Enterprise Ltd., without filing a FBAR (Foreign Bank and Financial Accounts Report) to the IRS.
In his plea agreement, McCarthy describes how a Swiss lawyer and UBS officials assisted him to deposit money into his UBS account and set up one or two other business entities as a layer of privacy to further hide his identity from the authorities. Thus, McCarthy set up COGS Enterprises Ltd. in Hong Kong for that purpose. All this took place over a five year spell between 2003 and 2008. By not disclosing his financial assets in the offshore account, prosecutors say that McCarthy has failed to pay at least $200,000 in taxes.
He faces a jail term of five years and a total fine of $250,000.
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.
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