Every year, the IRS Criminal Investigation unit releases an annual report detailing how they pursue and prosecute tax-law violations. It’s full of the usual dry statistics you would expect from any IRS report: investigations launched, tax preparers indicted, identity thieves sent to prison, and even average sentences for different crimes (29 months for tax preparers, 64 months for money launderers). But it also includes some surprisingly entertaining stories about the people the Criminal Investigations unit targets — the kind of stories that make feel better about our own choices in life. Having a bad day? You’ll cheer up when you read about these geniuses!
- Back in 2006, the IRS offered a special “Telephone Excise Tax Refund” program for certain calls incorrectly taxed according to time and not distance. Taxpayers could claim the actual tax paid, or take a simplified amount ranging from $30 for a single filer to $60 for a return with four or more exemptions. But where you and I might have seen a few extra bucks, or maybe a dinner out for the family, Ronald Wilkerson saw gold. Wilkerson, who owned a tax-prep service in Baton Rouge, filed 635 false returns claiming a total of $1,415,388 in telephone refunds. He collected $485,939 in fees for his efforts before the IRS caught on to him. Now Wilkerson is living in a gated community — unfortunately, it’s the kind where the gates are designed to keep people in, not out.
- Chicago has always had a reputation for “voting the dead.” Well, if dead people can vote, why shouldn’t they get tax refunds, too? At least, that’s what Chicago tax preparer Katrina Pierce thought. Pierce used stolen identities of deceased individuals to file 180 fraudulent returns for tax years 2006 and 2007. She scammed $500,770 from the IRS, plus $146,433 from the Illinois Department of Human Services and even $25,000 in false food stamp benefits. Prosecutors wrote that “stealing was [her] full time occupation and she was good at it,” before giving her nine years to discover whether orange really is the new black.
- Kim Jenkins Brandveen operated Healthcare Solutions Medical Supply in Richmond, Virginia. She withheld federal employment taxes from her employees’ paychecks, just like she was supposed to. But somehow, she forgot to send the money to the IRS. When collection agents stepped in to claim payment, Brandveen shut down the business and abandoned its bank accounts. Then she set up Healthcare Solutions Service Corporation, a virtually identical business serving the same customers with the same employees. And once again, she failed to pay over her employees’ withholding taxes to the IRS! Let’s see if 60 months in time-out jogs her memory for her next venture.
- The IRS also investigates tax and money laundering violations involving false insurance claims. In Houston, City Nursing recruited Medicare and Medicaid beneficiaries to sign blank treatment forms, then completed the forms to bilk the government for more than $45 million in “physical therapy.” (It might have been more plausible if City Nursing actually had a physical therapist on staff!) U.S. District Court Judge Melinda Harmon sentenced the owners, along with two employees who managed the fraud, to a total of 55 years in a place where they’ll have plenty of time to work on their own weight-lifting and exercise programs.
If you’re feeling especially clever today, you might detect a pattern. None of these stories end well for the schemers who thought they found the easy way to riches. Look, we know you hate paying tax. But you don’t have to flirt with the IRS “Hall of Shame” to pay less. You just need the right plan. The Tax Code is so complicated that there are actually more ways to save legitimately than there are to cheat. So let us give you the plan you need to save tax and sleep well, too!
Peter J Tarantino CPA
Tarantino & Company, CPAs
704 Macy Drive
Roswell, GA 30076
At Tarantino & Co, CPA also stands for Close Personal Attention ®
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