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Archive for the ‘Estate Tax Fraud’ Category

K&M Presents Testimony on Whistleblower Program

Wednesday, May 18th, 2011

The IRS Building in Washington, D.C.

Linda Stengle of Kenney & McCafferty, P.C. presented testimony before the IRS on May 11, 2011, on its proposed definition of “collected proceeds.” The definition, if approved, would form the basis of calculating whistleblower awards.

The IRS had four people on a panel to hear the comments. They were Tom Kane, Senior Legal Counsel; Stephen Whitlock, Director of the Whistleblower Office; Alexandra Minkovich, Attorney-Advisor; and Kirsten Witter, Chief of the Service’s Ethics and General Government Law Branch. The panel asked questions of a few presenters, including Stengle. Tom Kane stated that NOLs should be considered to be ordinary deductions and were not relevant to an award calculation. Kane also said there should be no 2 year waiting period imposed in cases involving a closing agreement and that further guidance would be issued with regard to whether whistleblowers can obtain a portion of criminal fines.

Stengle pointed out irregularities in the public comment process ordinarily required when the IRS changes a major regulation. Specifically, the IRS issued its Whistleblower Manual in June 2010 without public comment and narrowed the definition of “collected proceeds.” Senator Grassley, the author of the statute mandating IRS whistleblower awards, criticized the Manual and said that several sections worked to deter whistleblowers from reporting large scale tax underpayment. Stengle echoed Grassley’s request that the manual be held in abeyance while substantive sections undergo public comment.

Four other attorneys presented testimony on the topic. Among other comments, Richard Rubin observed that the proposed rule addressed the inclusion of specific categories of recovery into the definition, but no actual definition for “collected proceeds” exists anywhere in the regulations.

All those who presented stated that the proposed definition for collected proceeds needed to be broadened. The panel members gave no indication of when the IRS plans to publish the final version of the definition.

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Posted in Abusive Tax Shelters, Corporate Tax Fraud, Employment Tax Fraud, Estate Tax Fraud, IRS Whistleblower Office, Money Laundering Tax Fraud, Offshore Accouts Fraud, Tax Fraud, Uncategorized, Whistleblower Protection | Comments Off

Tax Whistleblowers Must File within 30 Days of No Answer Letter

Tuesday, April 26th, 2011

30 Days to File IRS AppealsIn Friedland v Commissioner (T.C. Memo 2011-90), the United States Tax Court dismissed the IRS whistleblower’s appeal because it was not filed within thirty days of the date of the “no answer letter” sent to Friedland by the IRS Whistleblower Office.  The Tax Court reiterated its ruling in Cooper – the “no answer letter” constitutes a final determination of a whistleblower claim.

Murray Friedland, a CPA, reported two corporations for tax violations in September 2009.  On November 13, 2009, the IRS Whistleblower Office sent Friedland a letter explaining that it had reviewed and evaluated the claim and then said that prevailing law prevented it from explaining why a claim would be denied.  Friedland found the letter confusing.  He sent additional information about his claim to the Whistleblower Office, and he called for an explanation.  The WO responded with three letters, one memorializing a conversation in which Friedland was told that he could write to the US Court of Federal Claims.  The letters also confirmed that the WO would not change its determination about Friedland’s claim.

Friedland followed the suggestion of the WO and appealed to the Court of Federal Claims.  The Court of Federal Claims dismissed the appeal on May 26, 2010, because the CFC does not have jurisdiction to hear IRS whistleblower appeals.  On June 18, 2010, Friedland filed an appeal with the Tax Court.

Friedland filed his appeal 217 days after the date of the first letter, the “no answer letter.”  As decided in previous Tax Court rulings, the “no answer letter” is notice of a final determination that the IRS is denying the claim.  Whistleblowers have thirty days from the date of the no answer letter to file their appeals.  Because Friedland filed 217 days after the date of the no answer letter, the Tax Court ruled that it had no jurisdiction over the claim because it was filed too late.

With regard to Friedland’s obvious confusion about the appeal process, the Tax Court said, “We recognize that petitioner may have relied on the erroneous advice of the Whistleblower Office in filing his initial appeal with the Claims Court. . . We sympathize with the petitioner.  We cannot expand our jurisdiction, however, even where the Commissioner provided bad advice.”

Kenney & McCafferty, P.C., has successfully represented IRS whistleblowers, even before the passage of the 2006 whistleblower statute. For knowledgeable and trustworthy representation, contact K&M for a free assessment today.

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Posted in Abusive Tax Shelters, Corporate Tax Fraud, Employment Tax Fraud, Estate Tax Fraud, IRS Whistleblower Office, Money Laundering Tax Fraud, Offshore Accouts Fraud, retaliation, Tax Fraud, Uncategorized, Whistleblower Protection | Comments Off

IRS Goes Viral?

Thursday, April 14th, 2011

One of many IRS YouTube offerings.

Not exactly, but the IRS has introduced its own YouTube channel, along with an array of audio products to help taxpayers take advantage of tax benefits available in the American Recovery and Reinvestment Act. People can visit the site at www.youtube.com/irsvideos. The IRS YouTube channel caters to people of different backgrounds by offering videos in English, Spanish, and American Sign Language.

One video teaches viewers how to use the IRS Withholding Calculator. The IRS suggests that people who have more than one job or working spouses should especially check their withholding to ensure neither too much nor too little is being withheld. People can use the calculator to help determine if they should make adjustments. Another video of interest discusses the role of an interim appeals office and what taxpayers can expect from that office.

In another attempt to make the tax code more transparent to today’s filers, the IRS has also launched an ITunes podcast site featuring information about ARRA tax credits.

Unfortunately, the IRS tax whistleblower program has not been the subject of a YouTube video, at least not one produced by the IRS. However, interested tax fraud followers can go to YouTube and type in “irs whistleblower.” One of the results listed will be a video of an IRS Whistleblower Conference panel discussion starring K&M’s lead partner Brian Kenney.

Of course, if you would like to learn more about the IRS whistleblower program, there’s no need to look at YouTube at all. Call Kenney & McCafferty at 215-367-4333 for a free consult today.

 

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Posted in Abusive Tax Shelters, Corporate Tax Fraud, Employment Tax Fraud, Estate Tax Fraud, IRS Whistleblower Office, Money Laundering Tax Fraud, Offshore Accouts Fraud, Tax Fraud, Uncategorized | Comments Off

SEC Announces Whistleblower Fund Totals Over $450 Million

Thursday, December 2nd, 2010

The Securities and Exchange Commission has announced that it has set aside over $450 million for payments to outside whistleblowers whose information results in the conviction or penalization of companies or individuals of securities fraud.  A report issued recently by the SEC shows that the agency has put $451.9 million into a new fund to pay whistleblowers. The Dodd-Frank Act stipulated that this fund must comprise at least $300 million.  To be eligible to receive an award, a whistleblower’s information must lead to a successful SEC or CFTC (Commodities Futures Trading Commission) recovery.  Specifically, the whistleblower must have voluntarily provided the SEC with “original information about a violation of the federal securities laws that leads to the successful enforcement of a covered judicial or administrative action, or a related action.”

The SEC set up the program in accordance with The Dodd-Frank Wall Street Reform and Consumer Protection Act enacted in July.  This financial overhaul law also creates a new whistleblower office at the SEC.  The law follows intense public criticism of the agency for the breakdown that allowed Bernard Madoff’s multibillion-dollar fraud to go undetected for more than 15 years, despite numerous red flags raised by whistleblowers, but ignored by the SEC.

Thanks to the generous new program which rewards tipsters for providing “original information” with anywhere from 10% to 30% of any sanctions levied by the SEC in cases involving at least $1 million in penalties, whistleblowers have stepped up their efforts.  According to the SEC, the Act is leading to an increase in high-quality tips. Kenney & McCafferty possesses the necessary experience in both civil and criminal tax matters to safely navigate the whistleblower through the difficult process of reporting tax fraud.

Posted in Corporate Tax Fraud, Estate Tax Fraud, SEC Whistleblower Program | Comments Off

Estate Tax Fraud: Prime Area for Whistleblowers

Wednesday, October 21st, 2009

Some commentators are noting that the recent prosecution of an individual for filing a false federal estate tax return may signal the Service’s new “get tough” policy on estate and gift tax fraud. Prior to the Whistleblower Rewards Act of 2006, prosecutions in the area have been lean.

The recent criminal case involved a woman who was the executrix of her mother’s estate. She admitted that she intentionally omitted assets worth $400,000 from the Form 706, the federal estate tax return. The executrix faces possible imprisonment, supervised release, and large fines and penalties.

Previously it was thought that the Service might be trying to adhere to the Bush administration’s wishes that estate taxes simply disappear. While Bush supported the elimination of the estate tax entirely, administrative proposals met with little support. Some feel that the administration then decided to gut the ranks of IRS employees to de facto eliminate enforcement of estate tax collection. In March 2008, outraged IRS employees sounded off about the Agency’s decision to terminate 157 of its 345 estate tax lawyers. The IRS itself had noted that 85 percent of the large taxable gifts it audited were fraudulent and intended to cheat the public. For every hour that the Service’s estate tax lawyers work, they uncover an average of $2,200 in taxes that Americans worth $1 million or more illegally withheld from the government. The Service’s estate tax attorneys uncover about $1.4 billion in lost tax revenues per year. While the Service appears to be recruiting again, it’s unclear whether those lost, and profitable, estate attorneys will be restored to the IRS rolls.

Estate and gift tax claims present an area of opportunity for whistleblowers. With a decrease in IRS estate tax attorneys, the Service will need to increase its reliance on informants to point out fraudulently reported Form 706 claims. Old tax returns and appraisals can help. The more credible the claim, the more likely it will be that the Service will decide to devote resources to the claim’s investigation.

If you believe you have a viable estate or gift tax evasion claim, call KEMY for a free assessment today.

Posted in Estate Tax Fraud | Comments Off

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