The pluses and minuses of understating one’s income on a tax return include, on the plus side, one’s tax bill will be smaller. But, on the minus side, such an understatement is a crime with serious consequences.
One enterprising criminal tax fraud promoter has put a new twist on the concept of “robbing Peter to pay Paul,” in a scheme which might be described as robbing Uncle Sam to pay citizens of the Great White North: persuading Canadian citizens to file fake United States tax forms to collect real refunds from these fraudulent claims.
A Canadian tax fraud promoter who was extradited from Canada and convicted at trial was sentenced to nine years in prison for conspiracy and three counts of wire fraud. The sentencing judge cited the “audacious nature” of his scheme.
All too often business owners find all that money they have withheld from employees’ paychecks much too tempting. Instead of paying it to the IRS, as they are obligated, they keep it, and use it for other things, like the electric bill, or a supplier whose supplies are necessary for the business to stay in business. Other people’s money used for things for which it was not supposed to be used. This can lead to problems. For example:
The mayor of Mount Vernon, N.Y., just north of Manhattan, has pleaded guilty to failing to file corporate and personal income tax returns. Failing to file tax returns is the same crime for which Hollywood film star Wesley Snipes famously was convicted and for which he spent nearly three years in federal prison.
Mayor Ernest D. Davis, 76, faces up to two years in prison as a result of his plea agreement.
For all the fear and anxiety people suffer in the run up to April 15th and the filing of tax returns, lots of taxpayers look forward to the refund to which they are entitled from the IRS as reported in their tax return. But, imagine you were not entitled to that so desirable refund, but a refund was coming to you anyway?
It would be like Christmas in April. Imagine that (indeed, rumor has it that John Lennon’s hit song, Imagine, left out the line “Imagine all the tax refunds….”)
“Man is not like other animals in the ways that are really significant: animals have instincts, we have taxes.”
— Erving Goffman
Letter from the Editor (Post-Mayan Apocalypse Fizzle): A New Life for the Newsletter, Life, Law & Taxes
(From the vault: A slightly different version of this post was published in the paper newsletter, sent to subscribers through the regular U.S. mail, in January 2013, on the occasion of the paper newsletter being revived to monthly publication, after a hiatus.)
It has been a while since the last edition of the through-the-regular-snail-mail Life, Law and Taxes, was completed and mailed out to you.
Affirming the Appellate Division of New York State Supreme Court, the New York Court of Appeals (the state’s highest court) rejected Amazon.com and Overstock.com’s challenge to the New York State tax law allowing New York to require the internet retail giants to collect and pay sales tax from sales made through affiliates posting links on their websites. Amazon and Overstock argued the statute was unconstitutional on its face. Chief Judge Lippman wrote for the majority. Judge Smith dissented, with an opinion..
It’s coming up next week, Tuesday January 15, 2013: a live program discussing tax obligations in New York State at New York County Lawyers’ Association. below is a copy of the flyer:
A Florida dentist faces up to three years in prison after pleading guilty to making a false statement on a federal income tax return.