Accounting
Tax Fraud Blotter: No class
Pushing 100 notices; nothing but the tooth; checking out; and other highlights of recent tax cases.
Le Roy, Minnesota: Tax preparer Craig Jacobson, 67, has been sentenced to two years of probation after pleading guilty to two felony counts of failure to collect and remit taxes, according to published reports.
Jacobson was reportedly charged after the Minnesota Department of Revenue revealed that he failed to file multiple withholding returns, filed false withholding and federal returns, and failed to pay withholding taxes for four years.
In late 2020, the state began investigating Jacobson after learning about criminal tax violations occurring from 2015 to 2018, according to published reports. During that time, reports said, Jacobson was CEO of two companies — M&I Tax Accounting and C&C Tax Service Inc., both of which were registered with the state for corporation tax, sales and use tax, and withholding tax accounts.
From 2015 to 2016, M&I reportedly withheld taxes from employees’ wages but never turned those taxes in. The state of Minnesota sent more than 60 notices to M&I, reports added. From 2017 to 2018, C&C withheld taxes from its employees’ wages, but again, the state reportedly said no withheld taxes were paid despite tax authorities sending another 30 notices.
During the same period, Jacobson reportedly had substantial gambling winnings and losses but his returns showed no federal taxes reflecting this. A tax specialist for the state compared Jacobson’s individual returns that he filed for Minnesota with those he filed with the IRS. The two didn’t match, reports said.
News outlets added that before the plea deal Jacobson was charged with 10 felony counts of failing to file withholding tax returns, 10 felony counts of failing to pay withholding tax, four felony counts of filing false or fraudulent individual income tax returns and one felony count of filing a false withholding return.
Ft. Worth, Texas: A U.S. District Court has permanently barred tax preparer Ruben Gonzalez and anyone acting with him or at his direction from preparing federal returns for others. Gonzalez consented to the injunction.
Gonzalez is banned from using his business, “Sin Barreras Income Tax,” to prepare returns for others. The government’s complaint alleged that Gonzalez or those working for him significantly overstated clients’ refunds in a substantial number of returns prepared at the business from 2021 to 2023 by fabricating or inflating business losses, by fabricating charitable donation deductions and by falsely claiming energy credits and COVID family sick leave credits. The complaint alleges Gonzalez cost the U.S. more than $20 million in lost tax revenue from 2021 to 2023.
The injunction requires Gonzalez to notify each person for whom he or preparers at Sin Barreras prepared federal returns, amended returns or refund claims from 2021 to the present. Gonzalez must also post a copy of the injunction where he conducts business and post a statement on social media accounts and websites that he is barred from preparing returns.
Princeton Junction, New Jersey: Professor and pharmacy co-owner Gordian A. Ndubizu, 69, has been convicted of evading federal income taxes and filing false returns.
During tax years 2014 through 2017, he was a professor of accounting at a university in Pennsylvania as well as the co-owner of Healthcare Pharmacy in Trenton, New Jersey. Healthcare Pharmacy was organized as an S corporation, the income of which flowed through to Ndubizu and his wife and was to be reported on their personal income tax returns.
He prepared fraudulent books and records for Healthcare Pharmacy, inflating costs of goods sold to reduce and underreport the pharmacy’s profits flowing through to him and his wife. Among other falsehoods, Ndubizu identified certain wire transfers as payments to purchase goods sold by the pharmacy when these wire transfers were made to personal bank accounts under his control and to bank accounts in Nigeria associated with an automotive company under his control.
Ndubizu’s returns for tax years 2014 through 2017 underreported his income and falsely reported that he had no financial interest in or signature authority over any foreign bank accounts. He failed to report some $3.28 million in income from the pharmacy, resulting in the evasion of some $1.25 million in tax.
Each count of tax evasion carries a penalty of up to five years in prison and a fine of $250,000. Each count of filing a false tax return carries a maximum of three years in prison and a fine of $250,000.
Hastings, Minnesota: Tax preparer Tania Fay Pryor, 37, has been sentenced to six months in jail for felony tax evasion, according to published reports.
Pryor, who reportedly once owned five H&R Block franchises and a daycare center, must also pay restitution and serve five years of probation.
Pryor was initially charged with 18 tax-related counts between 2006 and 2008 and owed more than $43,000 in unpaid taxes, reports said, adding that she pleaded guilty last May to four counts of failing to file returns or report her income and to two more charges of failing to pay taxes.
She reportedly failed to file returns or pay taxes, including for her former employees, though she deducted the money from their paychecks. According to cited state records, Pryor did not file withholding returns and tax deposits for her tax-preparing business for 2007 and 2008. A criminal complaint filed in a local county district court said Pryor owed more than $7,500 in withholding tax for 2006 for that business, according to reports.
Newark, New Jersey: Business owner Alain Rodrigues, 49, has admitted evading taxes through a check-cashing scheme.
Rodrigues owned and operated a construction company in Newark and Old Bridge, New Jersey, and beginning around 2017 deposited a portion of the payments from his customers into a business bank account; he then converted the balance to cash and money orders that he deposited in a personal bank account or used to pay cash wages to employees.
Rodrigues only reported the portion of the company’s revenue that was deposited in the business bank account on his business taxes and did not report the business revenue deposited directly into his personal bank account as income on his personal income taxes. The company, under his direction, also did not report to the IRS the cash wages it paid to employees nor collect or pay over employment taxes on these wages.
Rodrigues and his company paid $554,873 less than they owed in income taxes and failed to collect and pay over $793,139 in employment taxes, a total of some $1.35 million.
Sentencing is Dec. 19. Each count of tax evasion and failure to collect and pay over taxes carries a maximum of five years in prison and a $250,000 fine. As part of his plea agreement, Rodrigues has agreed to pay the government $1.35 million in restitution and to file amended returns.
Pickerington, Ohio: Office manager Eric Moesle has pleaded guilty to failing to pay more than $750,000 in employment taxes and to failure to file returns.
From 2014 through 2020, Moesle was the office manager for Elemental Dental in Pataskala, Ohio, where he oversaw payroll, bookkeeping and tax return prep. At Moesle’s direction, Elemental withheld Social Security, Medicare and income taxes from employees’ wages but did not pay over those taxes to the IRS nor file employment returns. During that time, the business also failed to pay over the employer’s share of those taxes.
Interviewed by the IRS in 2022, Moesle lied that he didn’t know that the employment taxes hadn’t been paid and that Elemental’s employment tax returns and W-2s hadn’t been filed; he also falsely stated these failures or omissions were unintentional.
Moesle caused a federal tax loss of $760,255.
On the record
Chicago: Attorney Michael Abramson, of Wilmette Illinois, has been convicted of tax fraud, attempting to tamper with a witness and violating a court order.
Abramson filed and caused to be filed false individual returns for himself and false corporate returns for a company in which he held an ownership interest, Illinois-based Leasing Employment Services Co. Inc.
Abramson also provided more than $1 million for personal expenses to a woman with whom he was romantically involved, then deducted what were falsely characterized as commissions or loans and included the fraudulent loans as an asset on the company’s returns. The expenses included money for a condo, luxury automobiles and travel, shopping and restaurants.
Following the indictment in this case, the court ordered Abramson not to contact witnesses, including his bookkeeper. Weeks before trial last February, Abramson gave the bookkeeper a copy of her previous court testimony on which he had handwritten notes changing or otherwise scripting her answers. The bookkeeper turned the transcript over to law enforcement.
Sentencing is May 1.
Mustang, Oklahoma: Education official Kim Weinrich has pleaded guilty to wire fraud and to making and subscribing a false return.
Between 2014 and April 2022, Weinrich was employed by Mustang Public Schools District as payroll supervisor and was promoted to director of payroll services in 2021.
Beginning in 2016, Weinrich manipulated the district’s payroll accounting software to increase her net pay each period, depositing the stolen money into her personal bank account. Weinrich’s scheme also resulted in several district employees underreporting federal and state withholdings.
Between July 2016 and April 2022, Weinrich defrauded the district of some $471,657.91.
She also manipulated the payroll software to make it appear as if she’d paid substantial federal income taxes when she’d had no federal income taxes withheld. In April 2022, she filed a federal return reporting income of $91,295, substantially lower than her real income from the scheme.
She faces up to 23 years in prison and fines up to $350,000.
Newark, New Jersey: A federal court has held in contempt tax preparer Abraham Taylor, a resident of Florida and formerly of New Jersey, for continuing to prepare returns after the court permanently barred him and his business, Chentay Consulting Services LP (d.b.a. CCS Tax Services) from preparing federal income tax returns for others.
According to the court’s order, Taylor concealed his violations of the permanent injunction by using e-filing privileges assigned to Fredrick Gibson, of Uncle Sam Tax Services in Pennsylvania. Taylor agreed to the entry of the contempt order and a disgorgement judgment; Gibson agreed to forfeit his e-filing privileges.
Taylor was held in contempt in 2021 for using e-filing privileges assigned to his son O’Neal Taylor and his son’s business. Through the contempt order, Taylor agreed to a disgorgement judgment and O’Neal agreed to forfeit his e-filing privileges.
The most recent contempt order requires Taylor to provide the U.S. with a list of his clients and to send a copy of the court’s injunction order to all clients for whom he prepared returns. It also provides that the court can order the sale of Taylor’s house to satisfy the two disgorgement judgments if he continues to prepare returns.
Washington, D.C.: CPA Timothy Trifilo has pleaded guilty to making a false statement on a mortgage loan application and to failing to file an income tax return.
Trifilo worked in tax compliance for several large accounting and finance firms. In recent years, he was managing director at a tax firm where he specialized in transaction structuring and advisory service, tax compliance and tax due diligence.
For a decade, Trifilo did not file federal income tax returns or pay all his taxes despite earning more than $7.7 million during that time. He caused a tax loss to the IRS of $2,057,256.40.
In February 2023, Trifilo sought a $1.36 million bank-financed loan to purchase a home in the District of Columbia. After the mortgage company told him that the bank would not approve the loan without copies of his filed returns, Trifilo provided the mortgage company with fabricated documents to make it appear as if he had filed returns and provided copies of 2020 and 2021 returns that Trifilo in fact had never filed with the IRS.
On these returns and other documents, Trifilo listed a former colleague as the individual who prepared the returns and uploaded them for filing with the IRS. This individual did not prepare the returns, had never prepared returns for Trifilo and did not authorize Trifilo to use his name on the returns and other documents. Based on false representation, the bank approved the loan and Trifilo purchased the home.
Sentencing is May 19. Trifilo faces up to 30 years in prison on the charge of making a false statement on a loan application and a maximum of a year on the charge of failure to file a tax return. He also faces a period of supervised release, monetary penalties and restitution.
San Diego: Business owner Wahead Raz has pleaded guilty to paying an IRS officer $35,000 to erase a six-figure tax debt.
On July 23, Raz offered the bribe to an IRS revenue officer during a meeting at the San Diego IRS office to discuss his outstanding tax debt of some $500,000. After the meeting, the IRS officer reported the bribe to the Treasury Inspector General for Tax Administration and agreed to be part of an undercover operation.
The next day, TIGTA video-recorded a meeting between the IRS officer and Raz during which Raz told the officer that he could pay in cash so the bribe would not be traceable. On July 25, the IRS officer recorded a call during which Raz said, “If you save me money, then I’ll take care of you,” and asked the officer to name a price. When the officer asked for $30,000, Raz countered with $20,000. After the IRS officer insisted on $30,000, Raz agreed, offering to pay $10,000 up front and the remaining $20,000 when the debt was cleared.
On July 30, TIGTA recorded a meeting between the IRS officer and Raz during which the latter provided the $10,000 cash and asked the officer to eliminate some $50,000 in tax debt owed by Raz’s business; Raz offered to pay the officer an additional $5,000 to have that debt cancelled.
On August 22, TIGTA recorded another meeting during which Raz gave the officer $15,000 in cash and told the officer he did not have the entire $25,000 originally agreed upon. On August 29, Raz paid $10,000 cash to complete the bribe. During two of the recorded meetings, Raz also offered to introduce to the officer other “clients” who also owed federal taxes and said he would introduce the agent once Raz’s tax debt was cleared.
Sentencing is March 19.
Accounting
IRS, Treasury finalize rules for clean energy investments in low-income communities and Indian land
The Treasury Department and the Internal Revenue Service have released
The 48E(h) program expands the 48(e) bonus credit designed to lower home energy costs and accelerate clean energy investments in low-income communities and helping low-income households, on Indian Land, or as part of affordable housing developments. A
Approved applications for the tax credit are expected to generate $3.5 billion in investments in low-income communities and on Indian Lands and are estimated to generate $270 million in offset energy costs annually. During the second year of the 48(e) program, the program received over 57,000 applications, totaling over 1.9 gigawatts of clean energy generation.
The approved applications are also expected to generate approximately $4 billion in public and private investment into communities and almost $350 million in offset energy costs annually.
The rules released Wednesday highlight the expanded list of program-eligible technologies beyond wind and solar to zero-emissions technologies like hydropower and geothermal. The full set of program-eligible facilities and how that list will be updated in the future is defined in the Section 48E Clean Electricity Investment Credit
“Expanding the Clean Electricity Low-Income Communities Bonus Credit will help lower energy costs in communities that have been overlooked and left out for too long and empower developers to work alongside communities to provide tailored solutions to meet their energy and economic needs,” said U.S. Deputy Secretary of the Treasury Wally Adeyemo in a statement Wednesday. “The final rules announced today will help ensure that all Americans benefit from the growth of the clean energy economy.”
The 48E(h) program will allocate bonuses to 1.8 gigawatts of clean electricity generation serving low-income communities each year, from 2025 through at least 2032. For the 2025 Program Year, the application period will open on Jan. 16, 2025 at 9:00 a.m. ET and close on Aug. 1, 2025 at 11:59 p.m. ET. For the 2026 Program Year and subsequent program years, the application period will open the first Monday of February at 9:00 a.m. ET and close the first Friday of August at 11:59 p.m. ET.
The final rules announced Wednesday make some notable changes from the 48(e) program, including changes due to the statutory transition to the 48E Clean Electricity Investment Credit along with incorporation of feedback received through public comment and lessons learned from previous years. The final rules highlight the list of eligible facilities defined in the updated 48E Clean Electricity Investment Tax Credit regulations from solar and wind to also include facilities that utilize zero-emission technologies like hydropower, marine and hydrokinetic, geothermal and nuclear.
The final rules clarify eligibility requirements for some of the main categories, including expanding the list of housing programs that are eligible to participate as a qualified low-income residential building project and clarifying the financial value that certain projects must provide to low-income households.
The final rules also offer a pathway for emerging clean energy businesses to receive priority in applying for the program.
The guidance released by the Treasury outlines the annual capacity limitation available for allocation, divided across the four facility categories. For the 2025 program year, around 174,243 kilowatts (DC) are being carried over from previous program years and distributed evenly between the four categories. Individuals interested in learning more about the program or submitting an application should visit the program’s landing page on the IRS website
The deal is expected to close in early 2025. Financial terms were not disclosed.
HDA was founded in 2011 and has two partners and a staff of over 65 professionals. EisnerAmper has 450 partners and approximately 4,500 staff members. The firm’s Eisner Advisory Group ranked No. 17 on Accounting Today‘s 2024 list of the Top 100 Firms, with $848.7 million in annual revenue.
HDA provides services exclusively to dental practice owners and has over 800 dental practice clients across all 50 states. The firm offers tax compliance and planning, monthly accounting, benchmarking, profitability analytics and revenue advice, using proprietary software tailored to dental practices.
“This combination with EisnerAmper will allow us to enhance our clients’ experience through additional expertise, technology, and service offerings,” said HDA managing partner Morgan K. Hamon in a statement Thursday. “We can now offer our dental practice clients value-added advisory services such as cybersecurity, real estate, business valuation, wealth management and much more. We’re really excited about this big leap forward.”
EisnerAmper sees dental practices as an important niche for outsourced accounting. “As the outsourced accounting sector becomes ever more focused on industry-tailored solutions, HDA represents a strategic move in both a key practice area and niche,” said Dan Gardiner, managing partner of outsourced solutions at EisnerAmper, in a statement. “We warmly welcome HDA and look forward to the exciting growth opportunities with EisnerAmper’s Health Care Group.”
Koltin Consulting Group CEO Allan Koltin advised both firms on the deal. “One reason for EisnerAmper’s continued growth has been its ability to add new, in-demand practice niches,” Koltin said in a statement. “This strategic pairing of EisnerAmper and HDA is all about the cultural fit along with the client-focused resources that each brings to the table.”
EisnerAmper has been busy on the M&A front since it
Tax Fraud Blotter: On the record
IRS, Treasury finalize rules for clean energy investments in low-income communities and Indian land
M&A roundup: EisnerAmper, BDO and Brady Martz expand
New 2023 K-1 instructions stir the CAMT pot for partnerships and corporations
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