July 2008 Archives

Taxes Problems for Actor Paul Hogan

July 31, 2008,

Australian actor Paul Hogan, better known as Mick Dundee from the popular Crocodile Dundee movies, apparently has tax problems in Australia. He recently filed a motion in the Central District of California to fight a move by the Australian Tax Office (ATO) to have the Internal Revenue Service (IRS) collect information about his personal finances.

The IRS issued five summonses to three U.S. banks for transaction information on Paul Hogan’s personal and business accounts from 1997 through 2006. Tax attorneys for Hogan claim the summonses are not authorized under the U.S.-Australian income tax treaty and the summonses have not been issued for an authorized purpose under Internal Revenue Code section 7602. Hogan claims none of the businesses in question operate with or in Australia and that he was a resident of the United States six out of the nine years under investigation.

The ATO began their investigation in 2006 after reports surfaced that Hogan and his business partner John Cornell committed tax fraud in Australia by hiding millions of dollars in film royalties in offshore trusts and companies they owned in Chile and the Netherlands Antilles.

Hogan currently lives in Santa Barbara, California and plans on returning to Australia this fall to film a movie. In an interview with Australia’s Network Ten, Hogan jokingly said, “I’ll be arrested the minute I land on the shore, of course, but I have a gun; so be warned.”

If you have tax problems contact the IRS tax attorneys at Brager Tax Law Group, A P.C

Tax Evasion and Swiss Banking Giant UBS

July 18, 2008,

Swiss banks have long held a reputation for being the place to go for secrecy. The mystique may, however be crumbling. Last month a District Court judge in Miami, Florida granted an Internal Revenue Service John Doe summons request. The court ordered UBS to turn over records with the names of US taxpayers who requested their accounts be kept hidden from the IRS. Undoubtedly the IRS believes that these taxpayers may have committed tax evasion by failing to report income. U.S taxpayers who have foreign bank accounts are generally required to report income from those accounts on their U.S. tax returns. In addition, they are required to declare the existence of these offshore bank accounts on their tax returns, and they are required to file Form TDF 90-22.1. Failure to file the Form TDF 90-22.1 can result in both criminal tax penalties, and civil tax penalties. The criminal tax penalties can result in a fine of not more than $ 250,000, or five years in prison, or both. 31 U.S.C. 5322(a).

The IRS has long had a voluntary disclosure program which provides some assurances to taxpayers who wish to go confess their sins to the IRS, before the IRS knows they have comitted tax fraud . It is questionable whether taxpayers who are clients of UBS meet the requirements of the voluntary disclosure program. Nevertheless there still may be room for avoiding tax evasion charges.

Still the civil tax penalties can be quite onerous. For willful violations occurring prior to October 23, 2004, a penalty not to exceed the greater of an amount equal to the balance of the account at the time of the violation (not to exceed $100,000) or $25,000.

For willful violations occurring after October 22, 2004, the maximum penalty is increased to the greater of $100,000, or 50 percent of the amount equal to the balance of the account at the time of the violation. 31 USC 5321(a)(5).

If you have questions regarding the IRS voluntary disclosure program, or have any other tax problems, contact the IRS tax attorneys at Brager Tax Law Group, A P.C.

Income Tax Evasion Scheme Thwarted By IRS

July 10, 2008,

Michael Fuller, an accountant from Florida, and Carl Perry, a food broker from Greenville, South Carolina, were sentenced on May 5, 2008 in federal court for tax evasion. Fuller was found guilty by a jury in July of 2007 and Perry pleaded guilty in May 2007 for conspiracy to defraud the United States pursuant to 18 U.S.C. 371. United States Circuit Judge William Wilkins sentenced Fuller and Perry to twelve months and one day in prison and three years probation, respectively.

Fuller and Perry committed tax evasion during a period from the late 1990's till 2001. According to the Department of Justice, Perry used offshore accounts and other entities, which were set up by Fuller, to hide income from the Internal Revenue Service (“IRS”). A credit card was also set up with another offshore bank which was funded with Perry’s untaxed income. Fuller filed false income tax returns and other documents with the IRS to hide their tax evasion scheme.

If you have been accused of tax evasion contact the Southern California tax lawyers at Brager Tax Law Group, A P.C.

Tax Evasion and Tacos

July 2, 2008,

Apparently there must be a lot of money in tacos. Karl James, a former owner and operator of more than 50 Taco Bell franchises in Southern California and Arizona, was sentenced to serve 36 months in jail and three years of supervised release months for bankruptcy fraud and tax evasion. James was also ordered to pay $1,121,829 to creditors who were victims of the bankruptcy fraud and $1,169,957 to the Internal Revenue Service (IRS) for unpaid taxes.

James, president and CEO of Golden West Tacos, Inc., pled guilty to charges of bankruptcy fraud and tax evasion on October 19, 2005. According to a press release issued by the Department of Justice, James' tax fraud involved failing to report over $3 million in diverted corporate funds on his personal income tax returns. James concealed the transactions by moving company assets to other company accounts and accounts in the name of others.

If you have been accused of tax fraud or tax evasion contact the Southern California tax lawyers at Brager Tax Law Group, A P.C.