Accounting
Tax Fraud Blotter: Beat this
Let me pay that; W-2-timer; the early bird gets a cell; and other highlights of recent tax cases.
Kansas City, Missouri: Anthony M. Alford, 46, has been charged with making a hoax call that led to an IRS employee being detained and a local IRS office being locked down.
The federal criminal complaint alleges that Alford placed a call to emergency services, falsely claiming that an individual was armed and was threatening to shoot people in an IRS building. According to an affidavit filed in support of the complaint, Alford called 911 on Sept. 10, 2024, and reported that a person identified in court documents as “Victim One” had a gun and was threatening to shoot up the IRS building at 333 W. Pershing Road in Kansas City. The victim is an IRS employee.
Police were dispatched to the building, where they contacted IRS security and federal officers. The victim had been detained and searched for weapons based on the 911 call. Following the call, a wing of the IRS building was locked down and the IRS announced that there was an active shooter in the building.
The victim, who was unarmed, told investigators she had been dating Alford for about a month and was trying to break up with him. Alford had never been violent, she said, but had exhibited controlling, possessive and jealous behavior. Alford had repeatedly called and messaged her the previous night, she said, and earlier that morning sent her messages threatening to involve the police.
Investigators interviewed Alford afterward and he told them the victim did not threaten to shoot up the IRS Building, as he had said in the 911 call. His stated intention was to instigate trouble for the victim at work.
Alford remains in custody pending a detention hearing on Oct. 4.
Rolling Meadows, Illinois: Tax preparer Adam R. Oliva has admitted that he stole more than $1.1 million from more than 10 clients under the pretense that the money would be sent to the IRS and state revenue authorities to satisfy tax liabilities.
Oliva held himself out as a tax professional who did business under various names, including Oliva and Associates LLC and The Oliva Group LLC. Oliva admitted in a plea agreement that from 2015 to 2020, he fraudulently induced the clients to provide him with money for the purported purpose of paying their income taxes. Oliva instead kept the money for himself.
Oliva also admitted that he filed false returns on behalf of some of the clients, reflecting no or lower tax liabilities to make it less likely that the IRS would contact the clients about their unpaid tax liabilities.
Earlier this year, Oliva pleaded guilty in a separate fraud case for duping investors who had provided him with money to fund purported short-term loans to clients. Oliva promised the investors that they would receive returns of 10% to 20% on their investments when Oliva actually never intended to make any short-term loans. Instead, he pocketed the investors’ money and used it for personal expenses, including gambling, restaurants and retail purchases. Oliva faces up to 20 years in prison in this case when sentenced on Oct. 18.
He pleaded guilty to one count of wire fraud and one count of preparing a false return. The wire fraud count is punishable by up to 20 years in prison; the tax count carries a maximum of three years. Sentencing is Jan. 24.
Palm Springs, California: Resident William Mandel Musgrow has pleaded guilty to scheming to defraud the IRS out of more than $2.1 million via the issuing of fake W-2s and to fraudulently obtaining nearly $1 million of COVID-19 economic relief loans.
Musgrow used one of his business entities to issue fraudulent W-2s that represented to the IRS that the recipients were employed by his various businesses, received wages and had federal tax withheld from their paychecks, when, in fact, the W-2s either overstated the recipient’s income or were wholly fraudulent as the recipient either did not work for the business at all or had no federal income tax withheld from paychecks. Musgrow then would help the recipient file fraudulent federal income tax returns that utilized the bogus W-2s to generate an undeserved refund.
In total, Musgrow issued at least 87 fraudulent W-2s and assisted in the filing of at least 87 false income tax returns. These returns requested a total of $2,769,600 in refunds, and the IRS paid out $2,136,630.
From March to August 2020, Musgrow also submitted 14 fraudulent applications to the U.S. Small Business Association and banks for Paycheck Protection Program loans and Economic Injury Disaster Loans. In these applications, Musgrow lied about the number of employees to whom were paid wages, falsely certifying that the loan proceeds would be used for permissible business purposes, and, in some cases, that the businesses were legitimate, when in fact they were not operating in any fashion and had no employees.
Musgrow submitted a total of 14 fraudulent loan applications that requested more than $1.9 million. The SBA and lenders approved and funded many of the loans; Musgrow obtained some $970,000 in fraudulent proceeds.
Sentencing is Jan. 16. Musgrow will face up to 20 years in prison for wire fraud and three years for the tax fraud.
Austin, Texas: Resident Frank Richard Ahlgren III has pleaded guilty to filing a return that falsely underreported the capital gains he earned from selling $3.7 million in bitcoin.
Between 2017 and 2019, he filed returns that underreported or did not report the sale of $4 million worth of bitcoin in which he had substantial gains. Ahlgren was an early investor in bitcoin: In 2015, he bought some 1,366 bitcoin when the virtual currency was valued at no more than $500 each. In October 2017, Ahlgren sold some 640 bitcoin for $3.7 million.
He then filed a federal return for 2017 that substantially inflated the cost basis of the bitcoin, underreporting his capital gain. In 2018 and 2019, Ahlgren also sold more than $650,000 worth of bitcoin and did not report those sales on either year’s return.
He caused a federal tax loss exceeding $550,000.
Ahlgren faces up to three years in prison as well as a period of supervised release, restitution and monetary penalties.
Albuquerque, New Mexico: David Wellington has been sentenced to 40 months in prison for devising and operating a tax evasion scheme, and has been ordered to pay more than $5.5 million in restitution.
In January 2005, Wellington and Stacy Underwood founded National Business Services in New Mexico, specializing in creating LLCs for clients seeking to “beat the IRS” by evading taxes. Wellington focused on marketing and client development; Underwood managed corporate filings and bank accounts. The company obtained EINs for clients and opened bank accounts under Underwood’s signature authority.
From 2005 to 2015, they created 192 LLCs and opened 114 bank accounts, with some $41.7 million deposited into accounts under Underwood’s control, representing concealed income. One client, Jerry Shrock, had three LLCs formed by National Business while undergoing an IRS audit. Despite the audit, Shrock transferred his home into one of the LLCs to shield it from the government. Between 2011 and 2015, he deposited nearly $4.9 million into a bank account opened for one of his LLCs, concealing more than $4.3 million in income without ever filing returns.
Underwood
Upon his release from prison, Wellington will be subject to three years of supervised release and is prohibited from ever running any business advising clients or dealing with the IRS.
New York City-based Citrin Cooperman is acquiring Teplitzky & Co. PC, expanding its presence in Connecticut, and continuing its private equity-fueled spate of acquisitions.
Based in Woodbridge, Connecticut, Teplitzky is an accounting, consulting and tax firm that specializes in the health care industry. It was originally founded in 1928.
“We are thrilled to add the preeminent health care accounting firm in the state of Connecticut to the Citrin Cooperman family,” said Citrin Cooperman Advisors CEO Alan Badey, in a statement. “What struck us most about Teplitzky is the team’s long history of exceptional client service and deep-rooted relationships in the Connecticut market, which is a perfect fit for our firm and growth strategy in the state and the broader New England region.”
Financial terms of the deal, which is expected to close in November, were not disclosed. Teplitzky’s five partners and more than 20 staff will be joining Citrin Cooperman, which ranked No. 18 on Accounting Today’s 2024 Top 100 Firms list, with $700 million in revenue, 490 partners, and more than 2,700 personnel.
“Joining Citrin Cooperman broadens our ability to provide our clients with enhanced services and resources without sacrificing our personalized, hands-on approach,” said Teplitzky managing partner Jeffrey Teplitzky, in a statement.
Daniel Astrachan, president of Astrachan Legacy Consultants, advised on the transaction.
Since
With its PE funding, Citrin Cooperman has been active on the M&A front over the past few years. In June, it acquired Worcester, Massachusetts-based
In 2022, Citrin acquired
Accounting
Acumatica launches version supporting professional services like engineers and consultants
Cloud solutions provider
“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
The Professional Services Edition joins Acumatica’s existing suite, which includes the Construction Edition, Manufacturing Edition, Distribution Edition, Retail Edition and General Business Edition.
Tristan Wheelock/Bloomberg
Scammers are using fake charities in the wake of
“You should never feel pressured by solicitors to immediately give to a charity,” said Commissioner Danny Werfel in a statement from the IRS, which issued the warning. “Verify if they’re authentic first.”
Tips to verify charities and spot fake ones:
- Scammers frequently use names that sound like well-known charities to confuse people. Fake charity promoters may also use bogus emails or fake websites or alter or “spoof” their caller ID to make themselves look like a real charity. Ask the fundraiser for the charity’s name, website and mailing address. Check the
Tax-Exempt Organization Search tool on IRS.gov to help find or verify legitimate charities. - Never work with charities that ask for donations by giving numbers from a gift card or wiring money. It’s safest to pay by credit card or check, and only after verifying the charity is real.
- Scammers want both money and personal information. Never disclose Social Security numbers, credit card numbers or personal identification numbers
- Scammers often pressure people into making an immediate payment. In contrast, legitimate charities are happy to get a donation at any time.
The IRS has other background on its
Citrin Cooperman acquires Teplitzky in Connecticut
Uber reportedly weighed buying Expedia. Analysts have reservations.
Democrats struggle to limit the loss of black voters in Georgia
Are American progressives making themselves sad?
U.S. Beneficial Ownership Information Registry Now Accepting Reports
CPA licensure program off to ‘promising’ start
-
Personal Finance6 days agoInvestors face delays moving certain assets from TreasuryDirect
-
Stock News7 days agoBeleaguered Stellantis ousts CFO, other top execs in bid to ‘redouble’ its focus
-
Economics7 days agoHurricane Milton inundates Florida
-
Economics1 week agoInflation rate at 2.4%, topping expectations
-
Finance6 days agoWells Fargo WFC Q3 2024 earnings
-
Economics1 week agoThe Democrats will struggle to retain the Senate
-
Economics6 days agoProducer price index September 2024:
-
Personal Finance6 days agoOzempic drives up health-care costs, whether you can get it or not