The New York Times says yes. The Justice Department says no.
I’m not sure what to believe but it does make you wonder what’s going on… The Times has suggested that the DOJ may back off its investigation of more than 52,000 über rich Americans who held secret accounts at the Swiss bank, UBS, citing concern over Swiss-American relations.
Ah, the Swiss. Purveyors of chocolate, cheese and secret US bank accounts. Are we really that concerned what they think about our efforts to resolve our own tax issues?
The Justice Department says no and has issued a statement saying that they will move ahead with asking the court to enforce the summons next week.
The bank, meanwhile, has already agreed to pay hundreds of millions of dollars for its part in helping US taxpayers evade taxes. As part of that settlement, UBS has also admitted its guilt. Guilt. As in they said they did it. It would be odd at this point for the DOJ to just walk away with no names.
While I don’t believe the US intends to prosecute individual taxpayers, I do think they will chase those taxpayers for back taxes, penalties and interest. To decide against it now makes the IRS’ recent “voluntary compliance” efforts all a joke.
We’ll know more next week. Keep reading…
I’m no defense attorney but even I know that making threats to the prosecutor is never a good idea.
Jack Chang, a tax preparer and president of Unitax Planners in New York, is facing charges of stealing tax payments from his clients for personal use. He has pleaded not guilty.
But that seems to be the least of his worries. He’s now been arrested on new charges of threatening to kill the prosecutor on his case. The charges include coercion, placing a false bomb or hazardous substance, stalking, and aggravated harassment.
Chang is accused of sending at least two threatening letters to Gilda Mariani, a prosecutor in the tax crimes unit. Chang and Mariani had met before in 1995, when Mariani prosecuted Chang on a grand larceny indictment. In that case, also tax-related, Chang pleaded guilty to stealing nearly a million dollars from 30 of his tax clients. Chang was sentenced to jail time as a result of those charges but served less than half of his sentence and was released in 1996.
According to prosecutors, Chang continued to steal from his tax clients. Following the new charges, Chang sent Mariani two letters which contained foul language and referred to her as “evil.” Chang also specifically threatened Mariani, saying in one letter:
I finally got my 9 mil gun and I am insane, you are responsible for my insanity and I will make sure that you get at least one for each and every year I spent incarcerated. I could hire someone to do the job for me or have someone from the cartel come in from the outside to do the job and leave, but I want to have the pleasure of doing it myself and if I am caught to make headlines.
The letter also contained white powder, which was later determined to be corn starch.
Another threat warned that Mariani’s body would be dissolved in hydrochloric acid and a video of the event sent to her loved ones, according to prosecutors.
The fact that he’s clearly crazy aside, it boggles the mind that people would continue to use a tax preparer who had been jailed for stealing from his clients. He plead guilty to that offense – it wasn’t even a question. Kind of screams out in favor of regulating tax preparers, does it not?
Editor’s Note: I’ve given a lot of thought to whether I believe this post is appropriate. I’ve decided that it is. History is important. Context is important. If we don’t expose lies and hatred for what they are, they grow, kind of like a fungus. Ignorance leads to more intolerance.
So below the fold is a story about James von Brunn, the white supremacist who, today, killed a man and terrorized others inside the US Holocaust Memorial Museum and how he believed that the Jewish population is responsible for our income tax. If you don’t want to read it, that’s okay. Just stop by tomorrow for more taxgirl goodness.
But for today, I think it needed to be said.
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I know, I know. This doesn’t even feel like news. We’ve seen it coming for awhile now, ever since this little gem appeared on the Jenkens & Gilchrist web site in 2007:
At the time of the closing, Jenkens agreed to pay a civil penalty of $76 million and cooperate with the IRS and the feds in exchange for the firm not being prosecuted. The firm. We all knew what that meant: individual members of the firm were going down. We just weren’t sure who, though we had a pretty good idea.
Now, we have the official word. Seven tax professionals were charged yesterday in a massive tax evasion scheme. The Jenkens attorneys who were indicted are Paul Daugerdas, Erwin Mayer and Donna Guerin. Also indicted were Denis Field and Robert Greisman, originally from BDO Seidman and Raymond Craig Brubaker and David Parse, formerly of “Bank A.” Though no one is naming “Bank A” in the indictment, where it is identified only as a “foreign bank with U.S. headquarters in New York”, most believe the bank to be Deutsche Bank.
The indictment charges all defendants with conspiracy to defraud the IRS and to evade taxes. Additionally, each of the defendants but Parse is charged with multiple counts of tax evasion in connection with tax shelters. Daugerdas and Mayer are also accused of using these tax shelters to illegal reduce their personal income taxes.
Why these tax professionals? Why now? Lev L. Dassin, the acting U.S. Attorney for the Southern District of New York, has written:
We are dedicated to holding accountable tax and financial professionals whose deceit and fraud cost this country millions in tax revenues. The allegations contained in the indictment reflect a brazen disregard for the law.
In other words, the feds want to use these guys as an example. And considering the amount of money thought to be at stake, they’re pretty high profile examples.
My guess is that the timing of the indictment stems from mistakes made in the KPMG case. I am sure that the feds are determined not to let that happen again.
If you’re curious (admit it, you are), you can read the entire indictment here. It downloads as a pdf – and it’s 78 pages long. You’ve been warned.
