And here I thought my days of reporting on Joe Francis were over…
It turns out that the Girls Gone Wild founder hasn’t quite put his tax woes behind him. After taking a deal to plead guilty to two misdemeanor counts of filing false tax returns – and escaping additional jail time in the process – Francis has found himself in the hot seat again.
If you believe TMZ, the IRS has liened Francis for nearly $34 million. To clarify, the IRS claims that Francis owes tens of millions of dollars in unpaid taxes. The breakdown is as follows: $17.7 million in 2001, $11.2 million in 2002 and $4.9 million in 2003. I’m not sure how much the penalties are since I haven’t seen the actual liens but those numbers put his net income somewhere close to $100 million for those three years.
I know, I know. Here I’ve blogging tax all this time when clearly, I should be producing porn.
On the plus side, though, I haven’t had to advise TMZ that my accounts have been frozen by the IRS to the tune of $100 million (no, those numbers don’t quite make sense – just reporting as I hear it). Francis has also allegedly reported that he will file for personal bankruptcy on tomorrow.
I’m not sure how this will affect Francis’ plea deal which requires him to resolve his outstanding tax issues. I mean, it is a resolution – but I’m guessing not so much what IRS had in mind. We’ll see.
(Editor’s note: I have since seen a copy of the liens as filed with LA County. As of 11/06/2009, the liens totaled $33,819,088.14)
It was a question posed to US taxpayers by the IRS in the wake of the UBS scandal: do you feel lucky?
The US offered US taxpayers the opportunity to voluntarily disclose offshore bank accounts as part of an amnesty program earlier this year. The choice? Come forward now and escape criminal prosecution or take your chances later.
It turns out that a number of US taxpayers didn’t feel quite so lucky. IRS Commish Doug Shulman has announced that more than 14,700 taxpayers came forward under the voluntary disclosure program. The disclosures were in the billions and covered accounts in 70 countries.
The number is higher than originally projected due to the numbers of taxpayers who made disclosures in the run up to the deadline. The deadline for disclosures had initially been September 23 but was extended to October 15 after input from tax professionals who were still fielding questions about the program from taxpayers.
UBS and the feds separately reached a settlement where UBS, in addition to a significant fine, agreed to release the names of over 4,500 US account holders at the bank. So far, only a handful of names has actually been released: at least two of those account holders have been sentenced to prison for their activities.
The remaining names will be disclosed over the next 10 months. Under the agreement, UBS will release the names of those account holders where there is a reasonable suspicion of “tax fraud or the like.” Generally, that includes high dollar accounts and accounts where there is a lot of movement of assets or complicated schemes. There will be procedure for appeals available in Switzerland.
ABC News is reporting that lawyers are already whining that their clients were misled by UBS about the extent of the banking secrecy. I suspect that means that lawsuits will be filed. That is, of course, how we like to solve problems in the US. It is *always* someone else’s fault, right? If the lawyers are smart, any such suits would do well to land in Switzerland and not in the US. Beyond the whole “juries likely don’t have sympathy for rich people who hide their money” issue, lawsuits based on the misdeeds of plaintiffs are not usually successful. Of course, that hasn’t stopped people from trying before…
For now, it’s a waiting game for UBS clients. The question is: do you feel lucky… now?
Suddenly, it’s not so fashionable to have your money in Swiss banks. That’s sooo February 2009. This season, all of the trendy tax evaders are heading somewhere else.
In the wake of increased activity by IRS to track down previously undisclosed assets (joined by the taxing authorities in countries like the UK and Germany), banks in Switzerland are reporting that the assets just aren’t pouring in like they used to. The slowdown started midyear, not coincidentally the time when the US government was exerting pressure on Switzerland to relax its banking secrecy laws.
In support of this trend, two BoA/Merrill Lynch analysts, Derek De Vries and Marc Brehm, have reported that at least one Swiss Banking Group, the Julius Baer Group, “was slightly more cautious than we expected on net new money.” In other words, Baer isn’t drawing the number of new accounts globally that they once were.
And the pendulum swings both ways. If it’s no longer attractive for Americans to do business in Switzerland, then many Swiss have countered that they will pull out of the US. Wegelin & Co., Switzerland’s oldest bank, is recommending that clients “exit from all direct investments in US securities… on the grounds of the threat of inheritance tax coupled with uncertainty as to whether one might not, one way or another, be turned into a US person.” Their gist, and I’m not making this up, is that our state of “moral and fiscal decline” means that it doesn’t make sense to invest in the US anymore.
So it’s time to panic, right? Not at all. Pulling out of investing in US-controlled securities is an interesting recommendation but not a terribly viable one. Like it or not, even in the midst of a recession, the US economy is a huge part of the global scene.
It’s kind of like how you’ll continue to see Paris Hilton in the papers. Even if you don’t like her, she adds value to an event – even if it’s just added publicity.
In other words, they don’t have to like us but I think the Swiss will still invite us to their parties.
“Girls Gone Wild” founder Joe Francis feels he finally got a break when a federal judge okayed a deal that Francis struck with prosecutors. Under the agreement, Francis was credited with 301 days already served and sentenced to one year of probation.
The plea deal was struck after Francis learned that a key witness, Francis’ former accountant, had withheld information from his defense team at trial. Francis was originally indicted on tax evasion charges in 2007 stemming from a number of income omissions and false deductions. He pleaded guilty to two misdemeanor counts of filing false tax returns and one count of bribing Nevada jail workers.
“I think we won that one,” Francis said after the hearing.
The former bad boy was polite during the hearing, answering questions as asked. It was quite a turn-around from the belligerent persona he had maintained since the charges were first brought against him in 2007.
After the hearing, he kissed his mother.
Apparently he really does kiss his mother with that mouth.
The Tax Justice Network has recently released its list of the most secretive financial jurisdictions in the world. And who topped the list? Luxembourg? Switzerland? Hong Kong? Caymans?
Nope, it’s the United States. Yeah, of America.
But don’t get too excited with your finger pointing. It has little to do [...]
Jeffrey Chernick, a toy salesman out of New York, was sentenced on Friday to three months in prison for hiding millions of dollars from the IRS. Upon his release, Chernick will serve six months’ house arrest and six months’ probation. The judge did not impose an additional fine as Chernick is already subject to [...]
So, who among us didn’t see this coming? IRS Commish Doug Shulman has announced the establishment of a new enforcement unit targeting the very wealthy. The group, called the Global High Wealth Industry, will specifically investigate partnerships, offshore trusts and other techniques used by the wealthy to hide income.
How wealthy is wealthy? [...]
Here’s a novel way to avoid paying tax: kidnap the tax collectors.
In what may be the oddest tax news I’ve read recently, the online paper, Sindh Today, has reported that an Indian man may be charged with kidnapping after he allegedly attempted to abduct two excise officers. According to reports, the [...]
“Survivor” winner Richard Hatch is finally a free man. The controversial TV personality, sometimes referred to as the “fat naked guy” on the show, has completed his sentence for tax evasion and related charges.
Hatch walked out of jail this morning, about 6 a.m.
But that doesn’t mean that he’s completely off the hook. Hatch [...]
Rapper and Wu-Tang Clan member Method Man was arrested Monday on tax evasion charges stemming from an alleged refusal to pay personal income taxes. Method Man, whose real name is Clifford Smith, has reportedly failed to pay taxes from 2004 to 2007. His tax bill for the period was just $32,799 plus penalties [...]
