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How American tax breaks brought a Chinese solar energy giant to Ohio

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Nestled among the corn fields of Pataskala, Ohio, Illuminate USA’s sprawling new solar factory is buzzing. Hundreds of freshly hired local employees are hoisting pallets, soldering equipment and inspecting their work as sheets of glass are transformed into state-of-the-art photovoltaic panels. They’re collecting hourly wages that start at double the state minimum. The factory has also delivered contracts to area electricians and suppliers.

From the outside, these are the hallmarks of the 21st century clean energy manufacturing boom promised by the Biden administration, the result of sweeping incentives designed to restore national prowess in a market dominated by China. 

In reality, what looks like a domestic triumph is also a win for America’s primary industrial and geopolitical rival. Invenergy, America’s biggest private renewable power developer, owns 51% of the plant. Longi Green Energy Technology Co., the Chinese solar giant, owns the other 49%, and it’s Longi’s panel-making expertise, technology and supply chain that are churning out tariff-free equipment for the U.S. market. 

Inside the plant, signs in both English and Mandarin admonish workers to clean up trash. Machine displays also toggle between the two languages. More than 100 Chinese nationals are on site working alongside more than 1,000 American colleagues, and bridging the language barrier requires lots of hand gestures and smartphone-enabled translation. Illuminate says much of this is temporary, and most of the Chinese workers will leave once the Americans are up to speed. 

But long after they return home, Longi will continue to profit. The joint venture benefits from millions in economic development incentives and federal tax credits for domestic clean energy manufacturing. For its part, Longi avoids anti-China tariffs and deepens its foothold in one of the world’s fastest-growing solar markets.

Companies based in or linked to China are replicating the strategy across the U.S. They are building or planning to build at least a dozen plants with 30 gigawatts of module-making capacity, according to a Bloomberg review of public statements, filings and other documentation. All told, the facilities would be able to supply roughly three-quarters of today’s U.S. panel needs. (BloombergNEF projects U.S. domestic demand for solar panels will be 45.5 gigawatts in 2024 and 50.4 gigawatts in 2025.)

American manufacturers are crying foul, saying these factories undermine their quest to build a domestic solar supply chain. Although other countries have taken advantage of the IRA’s subsidies, political objections have focused on Chinese investment. Bipartisan momentum is building in Congress to block China-backed firms from claiming tax credits for manufacturing anything central to the energy transition — a category that extends beyond solar panels to electric vehicles and batteries.

In Ohio, retired middle-school science teacher Eileen DeRolf has become an outspoken critic of Illuminate and the policies that brought it to Pataskala. She points to a 15-year tax abatement from the city and $4 million in incentives from a state economic development agency, to say nothing of the $350 million in potential annual tax subsidies from the Inflation Reduction Act. 

“To me, this is betraying America, to allow an uneven playing field,” DeRolf said. “I happen to not particularly want our geopolitical No. 1 enemy to benefit off our economic system.”

Illuminate and its American and Chinese parent companies see it differently. They point to an influx of well-paying jobs and to a resurrection of manufacturing in a fast-growing sector of the economy. 

“We’re a majority-owned American company,” said John Duer, Illuminate’s chief legal officer. “We have a minority partner based in China. We’re not a Chinese company trying to do business in the U.S.”

Executives at Invenergy and Longi had been talking about collaborating for years, but it took the Inflation Reduction Act — the 2022 law meant to jumpstart U.S. clean energy manufacturing — to spur them to action. Less than seven months after President Joe Biden signed the IRA, they announced plans for the Pataskala plant, and by early 2024, panels were rolling off the assembly line.

In addition to the tax credits Illuminate can claim for its U.S.-made panels, its parent companies reap significant benefits from the tie-up. Invenergy is the factory’s first and biggest customer, earning additional credits for using domestically produced components in its solar arrays. And Longi, like other Chinese panel-makers, brings advantages gained through decades of experience and generous support from Beijing. 

China identified solar panels as a priority more than a decade ago, handing subsidies and low-cost financing to developers and manufacturers, while pushing utilities to use more renewable power. Chinese firms also benefited from cheap electricity and cheap labor.

In addition, the industry has been dogged by allegations that some suppliers used forced labor from the country’s westernmost province, a mostly-Muslim region called Xinjiang. Beijing has repeatedly denied these accusations.

What no one disputes is that today Chinese companies dominate the market for solar panels and all of their component parts.

For environmental advocates, China’s cheap panels have been a boon, driving a more than 50-fold increase in emissions-free solar power generation globally since 2010. But to American rivals, something more nefarious was at work. They argued Chinese solar companies were selling their products below cost to unfairly corner the market, and trade authorities agreed, kicking off a cycle of tariffs meant to level the playing field.

Today, steep U.S. tariffs have effectively killed domestic demand for made-in-China solar panels. Companies, including Longi, first responded by shifting operations to other Asian nations, spurring another round of trade probes and enforcement. By producing panels in Ohio, Longi steps out of this game of Whac-a-Mole — and avoids at least $155 million in annual tariffs.

(The estimate is based on the average price in September for panels exported to the U.S. ($0.25 per watt), Longi’s share of Illuminate’s planned annual production capacity (5GW) and a potential combined antidumping and countervailing duty rate for Malaysian modules exported to the U.S. of 25%. Note: Any final antidumping and countervailing duty rates would be set as part of a U.S. trade probe of imports from Malaysia and three other Southeast Asian nations expected to conclude next year.)

Combined with the incentives from the IRA, Longi and other panel-makers can “make huge profits,” said Yana Hryshko, chief solar analyst at consulting group Wood Mackenzie. After surviving two decades of industry turbulence, these “are not stupid companies,” she said. “They will not make a move without being confident.”

On a June Friday morning, job-seekers started to gather at the Perry County, Ohio, career center well before Illuminate’s recruitment event was scheduled to begin. Many of the plant’s workers come from outside Pataskala, including areas hit hard by the collapse of coal mining. 

A job at the plant would mean a longer commute for Tricia Tilley, a 47-year-old janitor and church secretary. It would also nearly double her income and provide health insurance for her and her teenage son. 

As for the company’s ties to China? “I know they’re from another country, but they’re here trying to put money into our country,” she said. “As long as it’s a good job and they’re paying everybody — keeping on the up-and-up — I don’t see any problem with it. Follow the rules like everybody else, we’re cool.”  

Right now, Illuminate depends on the expertise of Chinese workers who’ve spent years handling specialized module-making machinery and brittle crystalline silicon cells. For many, it’s their first time outside of China, drawn by higher salaries and a sense of adventure.

“We’re here just to teach the American workers,” said Li, a production line technician who asked to be identified by her family name because she wasn’t authorized to speak to reporters. “When they can start a production line by themselves, there’ll be no need for us to be here anymore.” 

Li’s days begin with a video chat around 5 a.m., a chance to talk with her children in China before a company shuttle takes her from suburban Columbus to the factory. Many of the Chinese workers at Illuminate work 12-hour shifts, six days a week, logging 60% more hours every month than the plant’s typical American employees. 

Longi’s expats went through language training, though most rely on translators to communicate with their trainees. They also got a crash course in American culture, with advice to avoid commenting on race, skin color or body type. Li said her American colleagues have been kind.

“I hadn’t been out of China before. Now I get to come out and take a look,” she said. Li pegged her timeline at “two or three years. After that I’ll go back. Then I can say I’m a person who has been to the United States!” 

Illuminate is leaning into its heartland identity. Its website touts its role “investing in Ohio” and “onshoring America’s supply chains.” It’s partnering with local high schools for a robotics challenge and also has sponsored the city’s summer fireworks and its roughly 60-year-old fall festival.

DeRolf and other local skeptics deride these efforts as a charm offensive, albeit an effective one. It’s made it “ever so much more difficult to get this town and the people to pay attention to what we’ve got in that building,” DeRolf said.

Like DeRolf, activists in Mesquite, Texas, are taking aim at a $270 million plant that began producing panels late last year. Some 1,400 Texans now work at the factory owned by Canadian Solar Inc. — and while the company’s corporate headquarters are in Ontario, most of its directors and much of its manufacturing reside in China. 

Foreign direct investment has always been critical to countries trying to build domestic industry. In the late 1990s, China, for its part, welcomed Western automakers, providing access to its growing market while learning from their decades of experience. 

“Most of the companies that are building solar panels right now that have the know-how or skills are Chinese,” said Ilaria Mazzocco, a senior fellow at the Center for Strategic and International Studies. They also have well-established supply chains outside the U.S. At Illuminate, for example, panels are made with photovoltaic cells and glass from Malaysia and aluminum frames from Vietnam.

Many key materials aren’t yet produced domestically, and Illuminate says it’s actively working to expand its U.S. supply base.

The promise of the Inflation Reduction Act was that “you’re restoring the American industrial base,” said Nathan Picarsic, the founder of consulting group Horizon Advisory, which has investigated Chinese supply chain dominance and the use of forced labor. But as more Chinese-backed solar companies operate on U.S. soil, it betrays “the story that we’re telling ourselves about the manufacturing renaissance.”

The clash reverberates beyond solar to the fast-growing field of electric vehicles and battery manufacturing, also subsidized by the Inflation Reduction Act. In rural northwest Michigan, the town government is opposing an electric vehicle battery factory planned by a subsidiary of China’s Gotion High-tech Co. Ltd. The project is still mired in legal fights.    

In Virginia, Governor Glenn Youngkin discouraged Ford Motor Co.’s interest in building an electric vehicle battery plant with China’s Contemporary Amperex Technology Co. Ltd. in the state, calling it a “Trojan horse” for Beijing. The move drew praise from Youngkin’s Republican base. Ford is now building the plant in Michigan and will license CATL’s technology in lieu of a deeper partnership. 

Licensing is one way the U.S. can tap Chinese manufacturing expertise and technical know-how while retaining more control over operations, said Mazzocco. Regardless, the issue is a flashpoint for politicians — and is fueling bipartisan efforts in Congress to bar companies with ties to China and other so-called “foreign entities of concern” from claiming the IRA’s manufacturing tax incentives. (It’s also a way lawmakers could try to offset spending in the next budget fight.) The Treasury Department could also move unilaterally to impose restrictions on what projects qualify for the credit. 

Cory Ford, a school bus mechanic in the Pataskala area, doesn’t share his community’s embrace of the Illuminate plant. He doesn’t want U.S. taxpayer dollars to benefit Chinese industry; he’s also concerned that the firms could leave as quickly as they arrived. After all, Chinese companies have become expert at rapidly relocating in response to unfavorable tariffs or taxation. 

“We’ve given so much in subsidies and government funding,” he said. “When that runs dry, how quickly is that building going to empty out?” And, he asks, what happens to the local American workers left behind? 

Illuminate isn’t going anywhere, Duer said, even if Washington puts the manufacturing subsidies outside of reach: “We would adjust. Nothing is fatal. Nothing can’t be overcome. The fact of the matter is, we’re here to stay.”

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How to Mastering Accounts Receivable Management to Maximize Cash Flow

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Accounts Receivable Management for Maximum Cash Flow

Effective accounts receivable (AR) management is vital for maintaining a company’s cash flow, profitability, overall financial stability and is considered to be best practice for accounting management . By implementing strategic AR practices, businesses can reduce payment delays, minimize financial risks, and improve relationships with customers. Below are in-depth strategies for enhancing AR performance, ensuring financial health, and maintaining strong client relationships.

Establishing Formal Policies and Procedures

A well-defined set of policies and procedures is the foundation of effective accounts receivable management. Clear guidelines ensure consistency across the entire order-to-cash cycle, from invoicing to collection. These guidelines should outline the specific steps involved in generating invoices, tracking payments, and handling overdue accounts. Clearly defined roles and responsibilities for team members contribute to accountability, while setting payment terms and due dates helps streamline the process.

Creating a documented standard operating procedure (SOP) that employees can refer to ensures that everyone follows the same approach, minimizing errors and reducing confusion. Policies should also specify the consequences for late payments, including any penalties or fees. Establishing escalation protocols—such as follow-up reminders, late payment notices, and legal actions if necessary—keeps the collection process organized and efficient.

Leveraging Advanced Technology for Efficiency

Incorporating technology into accounts receivable management can significantly enhance efficiency. Advanced AR software platforms offer a range of features designed to automate and optimize the process, reducing the manual workload and minimizing errors. These platforms often include automated invoicing, payment tracking, customer communication, and collections management.

Automated systems can send reminders for upcoming payments and follow up on overdue accounts without human intervention. This automation saves time and ensures consistency in communication with clients. Many platforms also offer integrated billing systems that sync with existing account receivable software, providing a seamless flow of information across financial operations. Customer portals allow clients to access statements, make payments online, and review their payment history, fostering a more convenient and user-friendly experience. Some of the best account receivable software are: QuickBooks Online, Xero, Sage Intacct and NetSuite ERP.

Implementing Regular Accounts Receivable Reviews and Aging Analyses

Regular reviews of accounts receivable are essential to maintain a healthy cash flow. Implementing a schedule for periodic AR reviews allows businesses to monitor the status of outstanding balances and identify potential problems early. Aging analyses categorize receivables based on how long they have been outstanding—30, 60, or 90+ days—highlighting overdue accounts that require immediate action. These reports are valuable tools for assessing the health of cash flow and making informed decisions about which accounts to prioritize for follow-up.

Analyzing AR data helps identify patterns and trends that may indicate broader issues, such as recurring late payments from specific clients or seasonal fluctuations in cash flow. Businesses can use this data to refine their credit policies and improve collection strategies. A disciplined review process also enables organizations to proactively address cash flow challenges before they escalate, ensuring financial stability.

Strengthening Customer Relationships for Improved Collections

Maintaining positive relationships with customers is a crucial aspect of effective AR management. Accurate and up-to-date customer information, including contact details and payment histories, enables personalized service and facilitates smoother transactions. Keeping comprehensive customer profiles with relevant data helps businesses address issues quickly and negotiate payment plans when necessary.

Clear and transparent communication builds trust with clients, making them more likely to prioritize timely payments. Sending invoices promptly, following up with friendly reminders, and providing clear payment instructions are all practices that enhance client relationships. By understanding customers’ payment behaviors and preferences, businesses can tailor their approach to improve cash flow without jeopardizing long-term partnerships.

Implementing Credit Risk Management Strategies

For companies that extend credit to customers, managing credit risk is a critical part of AR management. Implementing structured credit assessment processes allows businesses to evaluate the risk associated with each customer before offering credit terms. Conducting thorough credit checks and setting credit limits based on each client’s financial history and creditworthiness can significantly reduce the likelihood of non-payment.

Businesses should regularly review credit terms and limits to ensure they remain aligned with evolving market conditions and customer circumstances. Implementing dynamic credit policies that adapt to changes in a customer’s payment behavior or overall economic environment helps minimize risks and protect cash flow. A well-executed credit management strategy reduces the impact of late payments and uncollected debts on the company’s finances.

Utilizing Aging Reports for Strategic Analysis

Aging reports are essential tools for understanding the status of outstanding invoices. These reports categorize receivables based on the duration since the invoice was issued, making it easier to identify overdue accounts. Regularly analyzing aging reports helps businesses prioritize follow-up efforts, allocate resources effectively, and take targeted actions to minimize delinquencies.

A data-driven approach to AR management not only enhances the efficiency of collections but also provides valuable insights into the company’s financial health. Recognizing patterns in payment behavior can inform adjustments to invoicing procedures, credit policies, and follow-up strategies. Accurate and timely aging reports are crucial for maintaining cash flow and ensuring that overdue accounts are addressed promptly.

Balancing Automation with Human Oversight

While automation offers numerous benefits for accounts receivable management, human oversight remains indispensable. Automated systems excel at handling routine tasks like invoicing, sending reminders, and updating payment statuses, but they cannot replace the expertise and judgment of experienced professionals. Human involvement is necessary for analyzing data, handling complex payment disputes, and maintaining customer relationships.

Businesses should strike a balance between automation and manual oversight. Leveraging automation for repetitive tasks allows AR teams to focus on higher-value activities, such as negotiating payment plans and resolving disputes. A well-rounded approach that combines technology with human expertise ensures that AR management remains adaptable and responsive to changing circumstances.

Proactive Collections and Follow-Up Procedures

A proactive approach to collections is crucial for maintaining healthy cash flow. Sending invoices as soon as work is completed and issuing payment reminders well before the due date can significantly reduce payment delays. Establishing a structured follow-up schedule for overdue accounts—such as sending gentle reminders at 15 days and more assertive notices at 30 days—helps businesses maintain consistent cash flow.

Maintaining detailed records of all payment communications provides a clear audit trail and ensures that the collection process remains professional and well-documented. Professional yet firm follow-up procedures demonstrate the company’s commitment to timely payments while preserving the relationship with clients.

Monitoring Key Performance Indicators (KPIs) for Continuous Improvement

Tracking key performance indicators (KPIs) is essential for assessing the effectiveness of AR management strategies. Metrics such as Days Sales Outstanding (DSO), average collection period, and the percentage of overdue accounts provide valuable insights into cash flow health. Setting specific goals for these KPIs encourages continuous improvement and helps identify areas where adjustments are needed.

By regularly monitoring and analyzing these metrics, businesses can refine their AR processes, implement targeted strategies, and optimize collections. Effective AR management not only improves cash flow but also strengthens the organization’s financial foundation, supporting sustainable growth and long-term success.

Accounts receivable management services

Several reputable accounts receivable management services are available to help businesses enhance cash flow and streamline collections. TSI (Transworld Systems Inc.) specializes in customized debt collection and payment reminders, reducing delinquency rates through targeted analytics. Atradius Collections offers global AR management, focusing on credit insurance and tailored solutions for international clients. Dun & Bradstreet Receivable Management Services provides comprehensive AR solutions, including credit risk assessments and data-driven strategies. Gulf Coast Collection Bureau supports industries like healthcare and utilities with services ranging from AR outsourcing to debt recovery. ABC-Amega delivers global commercial debt collection and AR outsourcing, assisting clients in managing complex cases and reducing payment delays. These services are designed to enhance financial stability and improve payment practices across various industries.

Conclusion

Optimizing accounts receivable management is a critical step toward ensuring consistent cash flow and financial stability. By establishing clear policies, leveraging technology, conducting regular reviews, and maintaining strong customer relationships, businesses can minimize risks and improve payment efficiency. A combination of automated tools and human oversight, alongside a proactive collections strategy, allows organizations to manage their receivables effectively. Prioritizing AR management is not just about getting paid—it’s about securing the financial health and longevity of the business.

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Accounting

Tax Fraud Blotter: Partners in crime

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Captive audience; some disagreement; game of 21; and other highlights of recent tax cases.

Barrington, Illinois: Tax preparer Gary Sandiego has been sentenced to 16 months in prison for preparing and filing false returns for clients. 

He owned and operated the tax prep business G. Sandiego and Associates and for 2014 through 2017 prepared and filed false income tax returns for clients. Instead of relying on information provided by the clients, Sandiego either inflated or entirely fabricated expenses to falsely claim residential energy credits and employment-related expense deductions.

Sandiego, who previously pleaded guilty, caused a tax loss to the IRS of some $4,586,154. 

He was also ordered to serve a year of supervised release and pay $2,910,442 in restitution to the IRS.

Ft. Worth, Texas: A federal district court has entered permanent injunctions against CPA Charles Dombek and The Optimal Financial Group LLC, barring them from promoting any tax plan that involves creating or using sham management companies, deducting personal non-deductible expenses as business expenses or assisting in the creation of “captive” insurance companies.

The injunctions also prohibit Dombek from preparing any federal returns for anyone other than himself and Optimal from preparing certain federal returns reflecting such tax plans. Dombek and Optimal consented to entry of the injunctions.

According to the complaint, Dombek is a licensed CPA and served as Optimal’s manager and president. Allegedly, Dombek and Optimal promoted a scheme throughout the U.S. to illegally reduce clients’ income tax liabilities by using sham management companies to improperly shift income to be taxed at lower tax rates, improperly defer taxable income or improperly claim personal expenses as business deductions. As alleged by the government, Dombek also promoted himself as the “premier dental CPA” in America.

The complaint further alleges that in promoting the schemes, Dombek and Optimal made false statements about the tax benefits of the scheme that they knew or had reason to know were false, then prepared and signed clients’ returns reflecting the sham transactions, expenses and deductions.

The government contended that the total harm to the Treasury could be $10 million or more.

Kansas City, Missouri: Former IRS employee Sandra D. Mondaine, of Grandview, Missouri, has pleaded guilty to preparing returns that illegally claimed more than $200,000 in refunds for clients.

Mondaine previously worked for the IRS as a contact representative before retiring. She admitted that she prepared federal income tax returns for clients that contained false and fraudulent claims; the indictment charged her with helping at least 11 individuals file at least 39 false and fraudulent income tax returns for 2019 through 2021. Mondaine was able to manufacture substantial refunds for her clients that they would not have been entitled to if the returns had been accurately prepared. She charged clients either a fixed dollar amount or a percentage of the refund or both.

The tax loss associated with those false returns is some $237,329, though the parties disagree on the total.

Mondaine must pay restitution to the IRS and consents to a permanent injunction in a separate civil action, under which she will be permanently enjoined from preparing, assisting in, directing or supervising the preparation or filing of federal returns for any person or entity other than herself. She is also subject to up to three years in prison.

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Los Angeles: Long-time lawyer Milton C. Grimes has pleaded guilty to evading more than $4 million in federal taxes over 21 years.

Grimes pleaded guilty to one count of tax evasion relating to his 2014 taxes, admitting that he failed to pay $1,690,922 to the IRS. He did not pay federal income taxes for 23 years — 2002 through 2005, 2007, 2009 through 2011, and 2014 through 2023 — a total of $4,071,215 owed to the IRS. Grimes also admitted he did not file a 2013 federal return.

From at least September 2011, the IRS issued more than 30 levies on his personal bank accounts. From at least May 2014 to April 2020, Grimes evaded payment of the outstanding income tax by not depositing income he earned from his clients into those accounts. Instead, he bought some 238 cashier’s checks totaling $16 million to keep the money out of the reach of the IRS, withdrawing cash from his client trust account, his interest on lawyers’ trust accounts and his law firm’s bank account.

Sentencing is Feb. 11. Grimes faces up to five years in federal prison, though prosecutors have agreed to seek no more than 22 months.

Sacramento, California: Residents Dominic Davis and Sharitia Wright have pleaded guilty to conspiracy to file false claims with the IRS.

Between March 2019 and April 2022, they caused at least nine fraudulent income tax returns to be filed with the IRS claiming more than $2 million in refunds. The returns were filed in the names of Davis, Wright and family members and listed wages that the taxpayers had not earned and often listed the taxpayers’ employer as one of the various LLCs created by Davis, Wright and their family members. Many of the returns also falsely claimed charitable contributions.

Davis prepared and filed the false returns; Wright provided him information and contacted the IRS to check on the status of the refunds claimed.

Davis and Wright agreed to pay restitution. Sentencing is Feb. 3, when each faces up to 10 years in prison and a $250,000 fine.

St. Louis: Tax attorneys Michael Elliott Kohn and Catherine Elizabeth Chollet and insurance agent David Shane Simmons have been sentenced to prison for conspiring to defraud the U.S. and helping clients file false returns based on their promotion and operation of a fraudulent tax shelter.

Kohn was sentenced to seven years in prison and Chollet to four years. Simmons was sentenced to five years in prison.

From 2011 to November 2022, Kohn and Chollet, both of St. Louis, and Simmons, who is based out of Jefferson, North Carolina, promoted, marketed and sold to clients the Gain Elimination Plan, a fraudulent tax scheme. They designed the plan to conceal clients’ income from the IRS by inflating business expenses through fictitious royalties and management fees. These fictitious fees were paid, on paper, to a limited partnership largely owned by a charity. Kohn and Chollet fabricated the fees.

Kohn and Chollet advised clients that the plan’s limited partnership was required to obtain insurance on the life of the clients to cover the income allocated to the charitable organization. The death benefit was directly tied to the anticipated profitability of the clients’ businesses and how much of the clients’ taxable income was intended to be sheltered.

Simmons earned more than $2.3 million in commissions for selling the insurance policies, splitting the commissions with Kohn and Chollet. Kohn and Chollet received more than $1 million from Simmons.

Simmons also filed false personal returns that underreported his business income and inflated his business expenses, resulting in a tax loss of more than $480,000.

In total, the defendants caused a tax loss to the IRS of more than $22 million.

Each was also ordered to serve three years’ supervised release and to pay $22,515,615 in restitution to the United States.

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Accounting

On the move: KSM hired director of IT operations

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Hannis T. Bourgeois celebrates 100 years with charitable initiative; KPMG and Moss Adams release surveys; and more news from across the profession.

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