Unaltered behavior; playing chicken; out on a rail; and other highlights of recent tax cases.

West Palm Beach, Florida: A federal district court has issued a permanent injunction against tax preparer Gregory Salgado, both individually and d.b.a. GMJ Real Investments Inc. and Cuba Salgado Tax & Real Estate.

Salgado is barred from preparing returns, working for or having any ownership stake in a tax prep business, assisting others to prepare returns or set up business as a preparer, and transferring or assigning customer lists to any other person or entity. The court also ordered him to pay $85,000 in gains from his tax prep business. Salgado agreed to both the injunction and the order to pay.

The complaint alleged that Salgado pleaded guilty in 2012 to filing a false personal return and filing a false return for another taxpayer and that the IRS assessed more than $500,000 in civil penalties against him for willfully underreporting tax on returns he prepared for clients.

According to the complaint, neither Salgado’s conviction, 33-month incarceration nor civil penalties altered his behavior. After his release from prison in 2015, Salgado continued to prepare thousands of returns for clients that either reduced their tax liability or inflated their refund claims. He did this largely by falsifying or overstating itemized deductions, fabricating or overstating business income and expenses and falsifying filing statuses and dependents.

Salgado must send notice of the recent injunction to each person for whom he or his business prepared federal returns, amended returns or claims for refund between Jan. 1, 2019, to the present. The court also ordered him to post a copy of the injunction at all locations where he conducts business and on his business’s website.

Cincinnati: Restaurateur Richard Bhoolai, 65, has been convicted of failing to pay taxes he withheld from employees’ wages.

He owned and operated Richie’s Fast Food Restaurants Inc., an S corp used to operate three area fried chicken restaurants since 1991. Bhoolai employed 22 to 34 employees between at least 2017 and 2018 and during that time withheld taxes from employees’ wages but did not pay them over to the IRS. Prior to that period, Bhoolai had not paid over such taxes from earlier years and the IRS had assessed a penalty against him.

Bhoolai instead used money from the businesses for his personal benefit, including gambling.

He faces up to five years in prison for each count of failure to pay taxes.

Bakersfield, California: Miguel Martinez, a Mexican national, has been sentenced to six years in prison for leading a $25 million fraud against the IRS.

From November 2019 through June 2023, Martinez, who previously pleaded guilty, led a scheme to file hundreds of fraudulent returns that claimed millions of dollars in refunds. He used stolen IDs to create fake businesses and report phony wage and withholding information for the businesses to the IRS. He then submitted hundreds of individual federal income tax returns in the names of still other individuals whose identities he had also stolen, claiming that those individuals worked for the fake businesses and were owed refunds based on the phony wage and withholding information.

Martinez used several people to allegedly help carry out the scheme, including a local tax preparer and a former IRS tax examiner who advised Martinez. In exchange, Martinez paid them thousands of dollars and took them out to lavish dinners.

The IRS paid out $2.3 million in refunds. When federal agents arrested Martinez and searched his three homes, he was found with $750,000 in fraudulent refund checks, ID cards for more than 200 individuals and multiple firearms that he could not lawfully possess due to his illegal status in the United States.

He also lied to government agents in the beginning of the investigation, initially saying that he had no knowledge of or involvement in tax prep for others and that he just sold gold and ran a party rental business. He also said that he did not know others who were involved in the scheme and had no relevant evidence.

Kansas City, Missouri: Tax preparer Ebens Louis-Loradin has been sentenced to 20 months in prison and ordered to pay $722,121 in restitution for a fraud in which he filed clients’ federal income tax returns that contained false information.

Louis-Loradin, a tax preparer since 2012 and who pleaded guilty earlier this year, prepared and filed 154 fraudulent returns that inflated his clients’ refunds by a total of nearly $1 million and boosted the fees he charged them.

He admitted that he engaged in the scheme from 2013 to 2020. Phony claims on the returns included dependents, inflated withholding amounts, credits for child and dependent care expenses, American Opportunity Credits and the Earned Income Tax Credit, itemized deductions and business losses.

The fraud caused a total federal tax loss of $953,873. Many of his clients, who told investigators they weren’t aware of the false items he placed on their tax returns, have been paying back the IRS for the refund overpayments.

Louis-Loradin also failed to file personal federal income tax returns for 2016 to 2018 and fraudulently used multiple IDs, including those of children, in his scheme.

Springbrook, Wisconsin: Gregory Vreeland, who owns and operates Wisconsin Great Northern Railroad of Spooner, Wisconsin, which provides recreational train rides and rail car storage and rail switching services, has been sentenced to a year and a day in prison for failure to pay employment taxes.

Vreeland, who previously pleaded guilty and who also co-owned and operated the Country House Motel and RV Park, was Great Northern’s president and the motel’s managing partner and was responsible for the companies’ financial matters, including the filing of employment returns. He failed to file employment tax forms for Great Northern from the end of 2017 through all of 2021 and failed to pay over the associated employee withholdings for that same period. Vreeland also failed to file employment tax forms for the motel from the third quarter of 2015 through the third quarter of 2020 and failed to pay over the associated employee withholdings for that same time. He used the withholdings to instead expand Great Northern’s operations and to buy a personal residence.

Vreeland received civil notices from the IRS for non-payment, which he initially ignored and made no attempt to cooperate with the service until it began levying his bank accounts.

Raleigh, North Carolina: Tax preparer Fwala Serge Muyamuna, 55, of Wake Forest, North Carolina, has pleaded guilty to 24 counts of aiding or assisting in the preparation of fraudulent returns and one felony count of obstructing justice.

Muyamuna was sentenced to 16 to 29 months in prison; the sentence was suspended and Muyamuna was placed on supervised probation for two years. Muyamuna was also ordered to serve four days in custody, pay $34,257.10 in restitution, perform 150 hours of community service and no longer prepare North Carolina tax returns.

Muyamuna, the manager, operator and tax preparer of Tax Experts/D & V Taxes and Accounting/DV Taxes, aided or assisted in the preparation of 24 false North Carolina individual income tax returns for clients for 2018 to 2021. Muyamuna also told a client to not cooperate with the investigation or speak with IRS agents.

Hanson, Massachusetts: Business owner Kenneth Marston has pleaded guilty to failing to pay employment taxes.

From 2015 through 2018, Marston owned and operated Bowmar Steel Industries, which engaged in steel fabrication, and Teleconstructors Inc., which provided installation services on cellular phone towers. During that time, Marston falsely treated his employees as independent contractors and failed to withhold employment taxes on more than $3.8 million in combined wages. Marston avoided reporting and paying $1 million in employment taxes owed to the IRS.

Failure to pay over taxes provides for up to five years in prison, three years of supervised release and a fine of $250,000 or twice the gross gain or loss, whichever is greater. Sentencing is Jan. 3.

Cloud solutions provider Acumatica announced the release of its Professional Services Edition, made to help support accounting and project management tasks for consultants, engineers, architects and other professionals. 

“These industry trends and direct feedback from the Acumatica Community were the main drivers for creating the Professional Services Edition, with customers, partners and developers voting it a must-have solution,” said Jeremy Larsen, vice president of product management at Acumatica. “The professional services industry is an underserved market for technology companies, providing a significant opportunity for innovation. As the fourth-largest vertical of customers we already serve, our partners have expressed strong enthusiasm about the potential impact of this release.”

The business management solution was built to address the unique challenges faced in the professional services industry, such as inefficiencies in quote-to-project setup, industry-specific billing rate structures, and customer support management. Features includes project accounting, compliance management, and AI-driven workflow automation. 

Specifically, users have access to Acumatica Financial Management, which has standard financial processes (GL/AP/AR) and reports, with additional options for multi-company, multicurrency, intercompany accounting, fixed assets, and cash management. They can also access accounts payable cost transactions related to progress billing lines from the pro forma side panel for timely vendor payments and increased billing accuracy, and tie revenue recognition to project milestones or deliverables.

It can also progress billing by percentage of completion or by quantity. Users can also manage AP workflows, from entering an invoice through approval routing and checks. Meanwhile, customer billing capacities, driven by real-time project costing, provide up-to-date labor, material, equipment, and other costs, letting users identify problem areas in current jobs and improve future project estimates.

The Professional Services Edition also boasts the ability to capture time and expense from any device, entries for which then flow to project accounting for costs and expenses related to projects or specific project tasks. Billable activities can also be marked up depending on the project, task, employee, or activity performed. The solution also has integrated payment capacities that automates accounts receivable processing to reduce back-office workloads and get paid faster.

Other payment-related features include click-to-pay links, and a self-service portal which streamlines communication with push notifications, giving customers access to support cases and payment options. The software can also specify tax calculations directly in the project and automatically retrieve and calculate all invoices, purchase orders, subcontracts, and expenses.

Project management capacities include the ability to access a complete view of project details, letting users manage and track all activities, issues, and changes, including daily field reports, actual costs, and cost projections from one central area. They can also ensure resource availability to allocate staff, equipment, and technology by team, department, and timeframe, letting users assign tasks and workflows to manage project resources and tie the costs to the project budget. Field reporting and mobility features help ensure everyone has the same project data from the field or anywhere they work and remotely enter time and expense details. There are also project productivity and insights features which use side panels for a quick and comprehensive view of key project data without navigating out of the current window. 

The new edition also features embedded customer relationship management solutions that help firms to keep detailed records of client interactions, proposals, manage contracts, payments, renewals, and compliance documents. They can also control cost overruns by automating project commitments and change order processes, meaning users can manage back charges or reduction in vendor commitments through the entry of a negative change order, as well as  streamline change orders for multiple projects with unit rate changes, custom retainage, and cost-only change requests. 

“Professional services firms face intense competition and require advanced business management technology to enhance operations and drive future growth,” said Jason Leveson, principal at Revive ERP, an Acumatica partner. “Acumatica’s Professional Services Edition is a smart step in providing these firms with the tools they need to stay agile, scale effectively and maintain a competitive edge in an ever-evolving market.”

The Professional Services Edition joins Acumatica’s existing suite, which includes the Construction Edition, Manufacturing Edition, Distribution Edition, Retail Edition and General Business Edition.