November 7, 2009

How to Defraud the IRS-.and Not Get Away

This is the one that did NOT get away. Jesse Ayala Cota, a former district director of the IRS pleaded guilty to one count of conspiracy to defraud the agency in April 2007 by teaching his home-based business clients how to cheat on their taxes. He has been sentenced to 2 years in prison.

Cota worked for a company called Renaissance, the Tax People Inc., a Topeka based tax advisory business that provides tax preparation, tax advice and 'tax audit protection' services to its clients. The company had pledged to decrease clients' tax liabilities through its various programs and services. Renaissance's audit protection service was called the 'Tax Advantage System', an advisory service that gave instructions to home business owner clients on how to present their personal expenses to the IRS as business expenses and claim for the relevant deductions. Although knowing full well their methods were duplicitous because it was based on presenting fraudulent information to the IRS, Cota and other employees at Renaissance assured clients that what they were doing was perfectly legal.

Cota, 68 had worked in the IRS and rose from the rank and file to become district director. In 33 years, he served in various capacities including revenue agent, audit training coordinator, large case examination manager, assistant service center director, assistant district director and finally district director. He retired in July 1999 and subsequently joined Renaissance.

Besides Cota, other defendants in the case are employees and owners of Renaissance, some of whom like Cota were also ex-employees of the IRS. Thomas Steelman, another long-time employee with the IRS who went on to work for Renaissance, was sentenced to 46 months in prison on August 10th this year. Renaissance founder and president, Michael Craig Cooper is due to be sentenced on November 18th while vice president Todd Eugene Strand will be sentenced on September 28th. A few other tax Renaissance preparers were also given either prison or probation sentences.

The IRS has been relentlessly pursuing Renaissance and other related offenders who commit these types of crimes. So if you are even thinking of defrauding the IRS, don't! You might be the next one at the end of the IRS hook.

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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