Connect with us

Accounting

Tax Fraud Blotter: On the record

Published

on

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.

Hands-in-jail-Blotter

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.

Continue Reading

Accounting

Trump berates Republicans to ‘Stop talking,’ pass tax cuts

Published

on

Donald Trump listens to a question while speaking to members of the media before boarding Marine One on the South Lawn of the White House in Washington, D.C.
Donald Trump

Al Drago/Bloomberg

President Donald Trump called on members of his party to unite behind his economic agenda in Congress, putting pressure on factions of lawmakers who are calling for last-minute changes to the legislation to drop their demands.

“We don’t need ‘GRANDSTANDERS’ in the Republican Party,” Trump said in a social media post on Friday. “STOP TALKING, AND GET IT DONE! It is time to fix the MESS that Biden and the Democrats gave us. Thank you for your attention to this matter!”

Trump sent the post from Air Force One after departing the Middle East as the House Budget Committee was meeting to approve the legislation, one of the final steps before the bill can move to the House floor for a vote.

House Speaker Mike Johnson has set a goal to pass the bill next week before the House recesses for its Memorial Day break.

However, the the bill failed the initial committee vote — typically a routine, procedural step — with members of the party still sparring over the scope of the cuts to Medicaid benefits and how much to raise the limit on the state and local tax deduction.

Narrow majorities in the House mean that a small group of Republicans can block the bill. Factions pushing for steeper Medicaid cuts and for an increase to the SALT write-off have both threatened to defeat the bill unless their demands are met.

“No one group gets to decide all this stuff in either direction,” Representative Chip Roy, an ultraconservative Texas Republican advocating for bigger spending cuts, said in a brief interview on Friday. “There are key issues that we think have this budget falling short.”

Trump’s social media muscle and calls to lawmakers have previously been crucial to advancing his priorities and come as competing constituencies have threatened to tank the measure.

But shortly after Trump’s Friday post, Roy and fellow hardliner Ralph Norman of South Carolina appeared unmoved — at least for the moment. Both men urged continued negotiations and significant changes to the bill that could in turn jeopardize support among moderates.

“I’m a hard no until we get this ironed out,” Norman said. “I think we can. We’ve made progress but it just takes time”

Continue Reading

Accounting

97% say CPA firms not using tech efficiently says survey

Published

on

While CPA firms far and wide have made major technology investments over the years, the vast majority of accountants say they’re not being used to their full potential. 

This finding comes from a recent survey undertaken by CPA.com and payment solutions provider Bill. The 400-person poll found that nearly all respondents, 97%, say they use technology inefficiently and that additional training is needed to maximize return on investment. Further illustrating the point, 43% of respondents said that technology is making them do more manual work, not less, something. Becky Munson, an Eisner Amper partner specializing in outsourced accounting services, believes this reflects a failure of training and change management, as she has seen many who disliked a technology change develop manual workarounds specifically to avoid using the new solutions. 

“We see employees make workarounds with tech stacks, which makes headaches that I think align with this 43%. We train people on new things, we ask them to use them, and they keep doing what they were doing before and only use the technology as much as they have to [in order to] move things along while you have people well trained on the software keeping up,” she said in a webcast on Thursday about the survey. 

Inefficient

Ariege Misherghi—senior vice president and general manager of accounts payable, accounts receivable and the accountant channel—said the issue isn’t just because of firms but also vendors that don’t provide enough support, and may not necessarily understand the profession in the first place. 

“Too often I think tools aren’t fully aligned with the workflows they’re meant to support. In SaaS they talk about product-market fit, but in this profession it’s not just that but also product-firm fit, and maybe product-profession fit. Not every tool marketed to accountants was built by people who truly understand how this profession works: the rhythms, the regulations, the stakes, the relationships, all of that. And even the greatest tools can fall short if they’re not implemented with a deep understanding of how firms really operate,” she said. 

And sometimes the inefficiencies come from both sides at once: the survey found that only 37% of firms require clients to use their tech stack, something that Munson said “breaks my heart” as “it is so low.” A streamlined, established tech stack is needed to achieve true economies of scale, but to get there firms need to standardize their data, and to do that firms need to make sure their clients’ data is also standardized, which usually means integrated tech stacks. 

“If you have all these different clients with all these different technologies, even if your own tech stack is standardized the systems they use is different, so the kind of data you will get will be different, and the work you need to do to make it work with your data is different, and your team spends a lot of time spinning their wheels,” she said. “Once you get standardized, where everything back and forth from clients is the same, you get to see how well the teams can do their work.” 

One source of inefficiencies is a rushed implementation. Munson said that, too many times, firms are so eager to get a solution working that they don’t pay attention to all its capacities, just the ones they need right now, but once the basics are down firms still don’t circle back on the rest of the features and how they can be used to drive efficiency. 

“Most of us have been through an implementation, either in the practice or with a client, where you’re just like ‘anything to get it working. Forget about all the fancy things it does. We just needed to do the basics right,’ and then we never circle back on those better, more efficient processes. We get to sort of minimal viable, and then we forget to come back and give it an extra polish. And so what we see there is the processes get written for that basic piece, and we never update,” she said. 

But this is part of what both speakers believed was the larger problem of firms getting lost in the details of their tech stacks and not taking a broader, more holistic approach, which would enable more efficiencies. The key component to managing technology effectively, Munson said, is looking not at individual solutions here and there but thinking of the system as a whole. 

“Often, what happens is something’s wrong or something is troublesome in some way. And so [we say] what can we do to fix that one thing? And we don’t think about it holistically and get all the right folks in there so that we’re solving for the right pain points,” she said. 

Misherghi agreed, and added that this holistic extends not only to the technology a firm already has but the solutions they plan to purchase in the future. When evaluating what technology they need, she said leaders need to think not in terms of specific point solutions to particular problems but things that can support the entire workflow—plus, the onboarding, training and ongoing support from the vendor. 

“Don’t just look for features, right? Look for solutions that support your workflows from providers that understand you. For firms, onboarding and training and optimization can’t be an afterthought. They’re essential to realizing value. I think this is where vendor partnerships matter. Firms seeking the strongest results aren’t just using software, they’re collaborating with their providers, they’re staying educated, they’re making sure their tools evolve alongside their needs. The best outcomes happen when your technology partner acts like part of your team, not just part of your toolkit,” she said. 

Misherghi said that the more successful firms she’s seen think less in terms of performing particular tasks but designing an entire system that, through automation, can do those tasks for them. It is less about plugging holes and more about developing a full infrastructure. The survey found that 74% of participants have a detailed plan to add new services in the next 12 month; Misherghi noted that, among these firms, 86% have a detailed technology roadmap, which is “a wonderful mark on the evolution of the profession we’re seeing.” 

She said a good tech roadmap is more like a service design blueprint versus a shopping list. Successful firms, she said, are not just chasing features but designing intentional workflows and systems capable of scalable service delivery. Similarly, she stressed that the provider should be more than just a vendor but a strategic co-architect that can help with growing pains. 

Misherghi said this approach will become especially relevant as AI becomes more common, as integrations will be key to their effective use, which means thinking in terms of the whole system to understand where those integrations should take place. Right now, she said, people think of AI in terms of analyzing data or extracting fields, but with the rise of AI agents will require firms to focus more on coordinating between them. 

“I think the next big leap is when those systems don’t just talk to each other, they act on each other’s behalf. I think the next big inflection point will be moving from automated steps to autonomous workflows, where AI agents aren’t just analyzing data or extracting fields but actually orchestrating tasks across tools based on firm policies and context and that will change the role of the accounting profession: its less time doing the work and more time designing the system for how everything works together. So the firms that will be thriving are those who are building strong infrastructure now because that is what AI needs to deliver on its core value,” she said.

Continue Reading

Accounting

Trump tax bill fails in House panel

Published

on

A key House committee on Friday failed to advance House Republicans’ massive tax-and-spending bill after hard-line conservatives bucked President Donald Trump and blocked the bill over cost concerns.

The House Budget Committee rejected the bill 21-16, with Republican Reps. Chip Roy, Ralph Norman, Josh Brecheen, and Andrew Clyde joining Democrats to vote against it. The four hardliners demanded deeper cuts to Medicaid and other government programs.

It’s incredibly rare for bills to fail at this step in the process, with the committee vote typically serving as a rubber-stamp to the bill before it moves to the House floor. 

Representative Chip Roy
Rep. Chip Roy

Stefani Reynolds/Photographer: Stefani Reynolds/B

The setback could be temporary and the panel can still approve the bill once the GOP differences are resolved. 

Republican Lloyd Smucker, who switched his vote to “no” to allow the committee to bring it up again, told reporters the committee will hold another vote on Monday. 

Trump, whose social media muscle and calls to lawmakers have previously been crucial to advancing his priorities, inserted himself in the debate less than two hours before the vote, berating dissidents and urging them to fall into line. 

“We don’t need ‘GRANDSTANDERS’ in the Republican Party,” Trump said in a social media post on Friday. “STOP TALKING, AND GET IT DONE! It is time to fix the MESS that Biden and the Democrats gave us. Thank you for your attention to this matter!”

The bill’s failure exposes the power a small group of lawmakers can wield as Republicans seek to push Trump’s “one big, beautiful bill” through the House with very narrow margins. GOP infighting threatens to kill the bill, or at least significantly delay Republicans’ plans to pass the bill next week.

(Read more:‘One big beautiful bill’ full of tax surprises.”)

Republican holdouts spelled out their demands during Friday’s committee meeting, including accelerating new work requirements for able-bodied adults on Medicaid to take effect immediately rather the 2029 deadline set in the legislation. The ultraconservatives also want a faster phase-out of clean energy tax credits.

It wasn’t immediately clear how House Republicans will re-group to address the divisions and advance the bill.

“I’ll let you know this weekend if we’re going to return first thing Monday. That’s the goal at this point,” Budget Chairman Jodey Arrington said after the vote. 

House Majority Leader Steve Scalise, who is helping to broker a deal among Republicans, said party leaders are in touch with the Trump administration to address some of the changes demanded by hardliners.

“We are all in agreement on the reforms we want to make,” Scalise said. “We want to have work requirements. We want to phase out a lot of these green subsidies. How quickly can you get it done?”

House Speaker Mike Johnson on Thursday pledged he would work through the weekend to broker a compromise between moderates, who are seeking an increase in state and local tax deductions, and ultra-conservatives, who say they won’t support it without more spending cuts.

(Read more:Here are the winners and losers in the Republican tax bill.“)

Members from both factions — the SALT Republicans representing high-tax districts and the fiscal hawks who want steeper budget reductions — have threatened to block the bill if House leaders don’t acquiesce to their demands. 

“No one group gets to decide all this stuff in either direction,” Roy, an ultraconservative Texas Republican advocating for bigger spending cuts, said in a brief interview on Friday. “There are key issues that we think have this budget falling short.”

Both Roy and Norman urged continued negotiations and significant changes to the bill that could in turn jeopardize support among moderates.

“I’m a hard no until we get this ironed out,” Norman said. “I think we can. We’ve made progress but it just takes time.”

If the legislation passes the House, it would then head to the Senate where it would likely undergo significant changes. Several members, including Senator Josh Hawley of Missouri, have stated opposition to the Medicaid cuts in the House bill.

Continue Reading

Trending