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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.

				

			

			
						
					
			

	
		
		

			

				
				
August 28, 2018

				 The U.S. has entered in to a deferred prosecution agreement with Swiss bank Basler Kantonalbank (BKB), with BKB agreeing to pay over $60 million in penalties and cooperate with ongoing investigations regarding U.S.-related accounts.  The bank held over 1,000 accounts for U.S. customers, with an aggregate value over $800 million; many of these accounts were not declared to U.S. taxing authorities by the account-holders; the bank provided specific services to its undeclared clients to promote concealment of assets and income from U.S. taxing authorities.  DOJ				 					 

						
Tagged in:
													  Abusive Tax Shelters, 
													  Tax Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
August 24, 2018

				 Executives of Utah-based biodiesel company Washakie Renewable Energy, and another individual associated with NOIL Energy Group in California, were indicted for falsely claiming over $500 million in renewable fuel tax credits. The individuals allegedly created false production records and other paperwork to make it appear that fuel transactions that qualified for the tax credit were occurring.  The indictment also included allegations of money laundering.  DOJ				 					 

						
Tagged in:
													  Environmental Fraud, 
													  Tax Credit and Deduction Fraud, 
													  Tax Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
July 27, 2018

				 Mirelis Holding S.A., a Swiss financial and asset management firm, entered in to a non-prosecution agreement with a penalty of $10.25 million.  Mirelis also agreed to cooperate with U.S. investigations in to its U.S. clients who used Mirelis to conceal assets and evade U.S. tax obligations.  DOJ				 					 

						
Tagged in:
													  Abusive Tax Shelters, 
													  Tax Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
June 22, 2018

				 Joseph Racine and Arnouse Merlien, two Atlanta-based tax preparers, have pleaded guilty to conspiracy to violate federal tax laws by misrepresenting to the IRS that their clients were qualified to receive certain credits and deductions. The misrepresentations caused $3.5M in lost tax revenue for the US. USAO Northern District of Georgia				 					 

						
Tagged in:
													  Tax Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
May 30, 2018

				 The owner of general contracting business pleaded guilty to filing a false tax return, announced the Justice Department’s Tax Division. According to court documents, Wade Ybarzabal, of Mandeville, Louisiana, owned a general contracting business, Ybarzabal Contractors LLC.  On his 2012 tax return, Ybarzabal underreported his business’s gross receipts by more than $475,000, resulting in an additional tax liability of more than $160,000.  Ybarzabal also underreported his business’ gross receipts on his 2013 and 2014 tax returns.  The total tax loss resulting from Ybarzabal’s fraudulent conduct for is more than $250,000. DOJ				 			
	
		
		
	


 			




	
		
		

			

				
				
May 24, 2018

				 A federal grand jury sitting in the Western District of Virginia returned an indictment charging a Collinsville, Virginia pharmacist with failing to account for and pay over employment taxes, announced the Justice Department’s Tax Division. According to the indictment, Jerry R. Harper, Jr., owned and operated Family Discount Pharmacy, Inc. (FDP) in Stanleytown, Virginia, with multiple locations in Stuart, Rocky Mount, Chatham, and Brosville, Virginia.  As owner of FDP, Harper was allegedly responsible for collecting and paying over FDP’s employment taxes.  The indictment charges that during 2011 to 2014, FDP accrued employment tax liabilities of more than $1.2 million and that Harper withheld those taxes from FDP employees’ wages.  He then allegedly failed to fully pay over the amounts withheld to the Internal Revenue Service (IRS). DOJ				 			
	
		
		
	


 			




	
		
		

			

				
				
May 23, 2018

				 A resident of Queens, New York, pleaded guilty to failing to collect and pay over employment tax, announced the Justice Department’s Tax Division. According to court documents, Kae Wook Lee was the sole owner and chief executive officer of Mona Lisa 7 Corporation, through which he operated a karaoke bar in the Flushing neighborhood of Queens.  Between 2011 and 2013, Lee diverted part of his karaoke business’s receipts to bank accounts in the names of shell corporations he created.  Lee then withdrew funds from those bank accounts to pay employees’ wages in cash without collecting or paying over employment taxes to the Internal Revenue Service (IRS).  Lee concealed the cash payroll from his accountant and signed and filed false tax returns that underreported employee wages.  The tax loss to the IRS caused by the defendant’s conduct was $612,500. DOJ				 			
	
		
		
	


 			




	
		
		

			

				
				
May 22, 2018

				 A grand jury sitting in the Eastern District of Michigan returned an indictment yesterday charging a former healthcare consultant with wire fraud, mail fraud, corruptly endeavoring to obstruct the internal revenue laws, and tax evasion, announced the Justice Department’s Tax Division. According to the indictment, from 2011 through August 2014, Sonja Emery falsely represented her professional status, educational background, and work experience to secure and maintain highly paid consulting positions in the health-care industry. Emery allegedly falsely represented to her employers that she was a registered nurse, had worked in health-care management positions, and had various degrees, including a bachelor of science in nursing, master’s degrees in health administration, and a doctor of philosophy degree.  The indictment further alleges that, from 2011 to 2014, Emery earned six-figure salaries, failed to file timely tax returns and failed to pay the substantial income tax due and owing on her income. DOJ				 			
	
		
		
	


 			




	
		
		

			

				
				
May 16, 2018

				 A federal grand jury returned an indictment against a Rogersville, Tennessee resident charging him with obstruction of the internal revenue laws, filing fraudulent multi-million dollar liens against government employees, and filing false claims for tax refunds, announced the Justice Department’s Tax Division. According to the indictment, Brian Leo Snow obstructed the internal revenue laws over a period of at least nine years by, among other things, filing false tax returns; filing false UCC Financing Statements against individuals seeking to collect his back taxes; and by filing a document with Hawkins County Register of Deeds in an attempt to terminate tax liens filed against him by the IRS. The indictment also charges that Snow filed three false claims with the IRS claiming over $144 million in tax refunds to which he was not entitled. DOJ				 			
	
		
		
	


 			




	
		
		

			

				
				
May 8, 2018

				 A Wilson, North Carolina tax return preparer was sentenced to 24 months in prison for filing a false claim for refund with the Internal Revenue Service (IRS), announced the Justice Department’s Tax Division. According to documents and information provided to the court, in early 2015 Tawanda Denise Pitt, managed Integritax, a tax preparation business in Wilson, North Carolina.  Pitt falsified taxpayer client returns by claiming phony dependents and education credits and reporting fake businesses in order to seek refunds to which her clients were not entitled.  Pitt also admitted that she trained other preparers to file fraudulent returns.  She caused a tax loss between $550,000 and $1.5 million; the total tax loss resulting from false education credits alone exceeded $780,000. DOJ				 			
	
		
		
	


 			


											

						

								

									
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