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Tax Enforcement Actions

					
The Internal Revenue Service (IRS) is the United States agency with primary responsibility for enforcing federal tax laws, working with the Department of Justice. Whistleblowers with knowledge of violations of the federal tax laws can submit a claim to the IRS under the IRS Whistleblower Reward Program, and may be eligible to receive a monetary reward.


Below are summaries of recently-announced settlements or successful prosecutions by the IRS or DOJ. If you believe you have information about fraud or wrongful conduct which could give  rise to a claim under the IRS Whistleblower Reward Program, please contact us to speak with one of our experienced whistleblower attorneys.

				

			

			
						
					
			

	
		
		

			

				
				
October 18, 2016

				 Two Wayne County, West Virginia business owners pleaded guilty to federal employment tax charges. Michael Taylor, 48, pleaded guilty to one count of conspiracy to defraud the United States in the ascertainment, computation, assessment and collection of employment tax from mid-2007 through 2010.  Jeanette Taylor, 44, pleaded guilty to one count of failing to pay over employment tax for the last quarter of 2009. According to documents filed with the court, from 2000 through 2010, Michael Taylor and Jeanette Taylor owned and operated a construction business in Wayne, West Virginia, that transported steel and sold gravel and concrete throughout West Virginia and Kentucky.  The Taylors changed the name of the business several times, though the operations of the business remained the same.  From 1999 to 2004, the business operated as Taylor Contracting & Taylor Ready-Mix LLC.  In 2004, the name changed again to Taylor Contracting/Taylor Ready-Mix LLC.  In 2010, the name changed a third time to Bluegrass Aggregates. DOJ				 					 

						
Tagged in:
													  Employment Tax Fraud, 
													  Tax Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
October 12, 2016

				 Tax R Us, a Detroit-area tax return preparation business, unlawfully understates its customers’ income tax liabilities and overstates refunds by making deliberate misstatements on the returns, according to a new civil lawsuit filed by the Justice Department.  The suit, filed in federal court in Detroit, asks the court to permanently bar Tax R Us, Vannak Long, Rosalind Warnock, Jasmine Jackson and Mary Jackson from preparing tax returns for others.  The suit also asks the court to order each of them to turn over a list of all of the tax returns they have prepared. According to the complaint, Long, the owner of Tax R Us, frequently understated his customers’ gross receipts and overstated their business deductions to minimize their income subject to tax.  The complaint also alleges that Warnock, a past Tax R Us preparer, and current Tax R Us preparers Jasmine Jackson and Mary Jackson prepared returns that fabricate self-employment businesses and business losses to offset their customers’ taxable income from other sources and to increase their customers’ Earned Income Tax Credit. In addition to this improper conduct, Warnock, Jasmine Jackson and Mary Jackson claimed education credits the customers are not entitled to receive, according to the complaint. DOJ				 					 

						
Tagged in:
													  Tax Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
October 5, 2016

				 A federal jury sitting in St. Louis, Missouri, found the local owner of a tax return preparation businesses guilty of two counts of tax evasion. According to the evidence at trial, Semere Tsehaye, 39, was the owner and operator of at least 20 Instant Tax Service (ITS) franchise locations operating in and around East St. Louis, Illinois; Kansas City, Kansas; and Kansas City and St. Louis, Missouri, from 2005 to 2011.  ITS was a brand name of ITS Financial LLC, a nationwide tax preparation business headquartered in Dayton, Ohio.  Tsehaye owned and operated his ITS franchise locations using two entities named A&S Tax Service LLC (A&S) and ERI Enterprises LLC (ERI). DOJ				 					 

						
Tagged in:
													  Tax Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
October 4, 2016

				 A former Internal Revenue Service (IRS) revenue officer pleaded guilty in the U.S. District Court in the Middle District of North Carolina to one count of tax evasion and one count of corruptly endeavoring to impede the due administration of the internal revenue laws. According to documents filed with the court, Henti Lucian Baird, 60, and a resident of Greensboro, North Carolina, filed tax returns each year but has not paid his self-assessed taxes since at least 1998. During this time, Baird continued to pay the mortgage on his 4,300 square-foot home, annual fees for his timeshare in Florida and car payments on his BMW.  Baird admitted to the revenue officer and the mortgage holder that he did not keep money in bank accounts because he feared a levy or garnishment. DOJ				 					 

						
Tagged in:
													  Tax Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
September 22, 2016

				 A federal jury in Los Angeles convicted the owner of a medical clinic for his role in a health care fraud scheme and for filing false income tax returns. Evidence introduced at trial showed that Michael Huynh, 66, the office manager and part-owner of a medical clinic, provided false prescriptions to a pharmacist and co-conspirator, Farhad N. Dany Sharim, who submitted false claims to insurance companies for drugs that were never dispensed.  Once Sharim received payments from the insurance companies, he paid Huynh for the false prescriptions.  Trial evidence showed that between January 2004 and November 2009, Huynh received 82 checks from Sharim totaling over $1.1 million.   Evidence at trial also demonstrated that Huynh filed false federal tax returns for tax years 2007 through 2011 that underreported the medical clinic’s gross receipts and sales on the corporate tax returns and total income on the individual tax returns.  Trial evidence showed underreported income of over $1.6 million. DOJ				 					 

						
Tagged in:
													  Healthcare Antitrust, 
													  Medical Billing Fraud, 
													  Tax Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
September 20, 2016

				 The former executive director of the Armed Forces Foundation was indicted on federal charges stemming from a scheme in which she allegedly stole from the non-profit charity, defrauded donors, and lied to the Internal Revenue Service (IRS) and the public about her salary and benefits. The indictment was announced by the Washington Field Office of the IRS-Criminal Investigation. The indictment also includes a forfeiture allegation seeking all proceeds that can be traced to the alleged fraud scheme. DOJ				 					 

						
Tagged in:
													  Tax Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
September 19, 2016

				 A Watertown, New York, food and restaurant entrepreneur and franchisor pleaded guilty to one count of wire fraud and one count of tax evasion announced the Justice Department’s Tax Division. According to the criminal information and plea agreement filed with the U.S. District Court in Utica, New York, between 2005 and 2015, Christopher Swartz, 46, engaged in a promissory note scheme to defraud lenders and investors, as well as a scheme to evade taxes and obstruct the Internal Revenue Service (IRS). DOJ				 					 

						
Tagged in:
													  Tax Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
September 14, 2016

				 A Durham, North Carolina, tax return preparer was sentenced to 12 months and one day in prison for aiding in the preparation of false tax returns, announced the Justice Department’s Tax Division. According to documents filed with the court, Reyna Nembiu Montes, operated “Su Manu Amiga,” a tax return preparation business in Durham.  Montes admitted that she prepared multiple false individual income tax returns for clients, claiming false dependents in order to generate fraudulent refunds.  She further admitted that she failed to disclose the existence of her tax return preparation business on her personal income tax returns. DOJ				 					 

						
Tagged in:
													  Tax Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
August 31, 2016

				 A Pollock Pines, California, woman who owned a tax return preparation business and two of her employees, pleaded guilty to charges related to filing more than 250 false claims for refund, announced the Justice Department’s Tax. Teresa Marty, 56, the owner of Advanced Financial Services (AFS), a Placerville, California, tax return preparation business, pleaded guilty to conspiring to file false claims for refund and conspiring to defraud the Internal Revenue Service (IRS).  On Aug. 24, Pamela Harris, Marty’s office manager, and Rebecca Bandera-Marty, a California certified tax return preparer, also pleaded guilty to one count of conspiring to file false claims.  Marty, Harris and Bandera-Marty were indicted in June 2013 along with two other co-defendant clients, Charles and Victoria Tingler.  The Tinglers pleaded guilty to filing false claims in the spring of 2015 and will be sentenced in November. DOJ				 					 

						
Tagged in:
													  Tax Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
August 26, 2016

				 A federal court in Charleston, South Carolina, has permanently barred two women from preparing federal tax returns for others, the Justice Department announced. According to a civil complaint filed by the United States, Latasha Failey and her sister Latoya Windham prepared federal income returns in North Charleston from 2009 to 2012.  They continually and repeatedly prepared income tax returns that claimed false deductions or credits in order to understate their customers’ tax liabilities, the complaint alleged.  The defendants falsely claimed education credits; child and dependent care credits; itemized deductions on Schedule A; and dependency exemptions, according to the complaint.  In 2013, Failey and Windham each pleaded guilty to two counts of aiding and assisting in the preparation and presentation of a false income tax return and were sentenced to prison and probation, respectively, the complaint states. DOJ				 					 

						
Tagged in:
													  Tax Fraud, 
												
						

					
	
							
	
		
		
	


 			


											

						

								

									
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