A recent decision of the United States Court of Appeals, Federal Circuit holds that the pre-2004 regulation limiting willful FBAR penalties to a maximum of $100,000 is notapplicable. As many tax practitioners know, 31 U.S.C. § 5314(a) requires taxpayers who have accounts with foreign financial institutions, specifically any person with a financial interest in or signature authority over foreign financial …
7206(2): The Crime of Aiding or Assisting the Preparation of a False or Fraudulent Document
Section 7206 establishes, among other crimes, the federal tax crime of making false or fraudulent statements to the IRS, and aiding or assisting a taxpayer in making such statements. This post focuses on the crime of aiding or assisting the preparation of a false or fraudulent document that is presented to the IRS. The relevant statute provides as …
Section 7206(1): False Tax Returns and Statements
Section 7206 establishes, among other crimes, the federal tax crime of making false or fraudulent statements to the IRS, and aiding or assisting a taxpayer in making such statements. Common violations of section 7206 include falsely inflating deductions or underreporting income. However, unlike a number of other federal tax crimes, section 7206 does not technically require that the government prove …
Tax Crimes: Section 7203 and Willful Failures to File a Tax Return
Section 7203 of the Internal Revenue Code creates the federal crime of willfully failing to (1) file a tax return, (2) supply information, or (3) pay a tax. The Department of Justice’s position is that this misdemeanor offense of willfully failing to file a tax return, pay tax, keep records or supply information should only be charged when a defendant …
I.R.C. § 7212 – INTERFERING WITH THE ADMINISTRATION OF TAX LAWS
Internal Revenue Code section 7212(a) creates two separate offenses: (A) Corrupt or forcible interference, and (B) corrupt endeavors to impede. The relevant statute provides as follows: I.R.C. § 7212 – ATTEMPTS TO INTERFERE WITH ADMINISTRATION OF INTERNAL REVENUE LAWS (a) Corrupt or Forcible Interference.–Whoever corruptly or by force or threats of force (including any threatening letter or communication) …
Tax Evasion: Attempting to Evade the Assessment of Taxes
“Tax evasion” is a shorthand phrase often used to describe a wide variety of tax-related fraud. The crime under the federal tax laws, however, is a rather specific one, and requires that the government establish specific elements in order to sustain a conviction. This resource focuses on a particular strand of tax evasion: Attempting to evade the assessment …
What is Bank Fraud?
18 U.S.C. § 1344 is commonly referred to as the bank fraud statute. It is used by the Department of Justice to prosecute “any scheme to defraud” a federal bank.[1]The scope of the phrase “any scheme” is broad; it has, for example, been used to prosecute check forging, check kiting, and embezzlement, among other things. Making misrepresentations to a bank – …
Former University Professor sentenced to Prison for Hiding over $220 Million in Offshore Accounts—Pays $100 Million to Resolve FBAR Penalties
Dan Horsky, a 71-year-old retired business school professor, was sentenced to prison last week for conspiring to defraud the United States and to submit a false expatriation statement to the Internal Revenue Service. In addition to the prison term, he paid a $100 million civil penalty to resolve his FBAR penalties for failing to report the substantial offshore accounts. According …
A Focus on Healthcare Fraud
Federal prosecutors recently announced the conviction of the former office manager of a home health care company for conspiring to commit Medicare fraud. The case, which was brought as part of the Medicare Fraud Strike Force, demonstrates the way that federal government agencies coordinate through investigative partnerships to prosecute health care fraud. The defendant in the case, the manager of …
Tax Court Upholds Tax Fraud Assessment Against Incarcerated Former IRS Examiner and Disbarred Attorney
The Tax Court recently upheld the assessment of a civil fraud penalty against an incarcerated/disbarred attorney. Robert L. Schwartz v. Commissioner, TC Memo 2016-144. The petitioner, who was also a former examiner with the IRS, had maintained a successful law practice specializing in personal injury for nearly 40 years before being convicted of mail fraud and of filing a false …
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