Accounting
Tax Fraud Blotter: ‘Ship em out
Published
4 months agoon

Brace yourself; more Ultimate crimes; good enough; and other highlights of recent tax cases.
Providence, Rhode Island: Mortgage broker Joseph Giuttari has admitted to stealing from investors, to filing fraudulent applications for Economic Injury Disaster Loans, and to failing to report an income of more than $540,000.
Giuttari, owner and operator of Hybrid Capital Group, The Fens Co. and Realty Funding Advisors, among others, pleaded guilty to wire fraud, theft of government property and filing a false return. He allegedly misrepresented to investors the amount a borrower was interested in obtaining; misrepresented that documents were in place to secure the investment funds; inflated how much borrowers owed; used borrowers’ names without their authorization to obtain funds from investors; and created fraudulent promissory notes and real estate documents bearing forged signatures of borrowers. He also admitted that he appeased certain earlier investors and lenders by paying them back using money from new investors.
The government claims the loss is between $3.5 million and $9.5 million.
Giuttari admitted that he also fraudulently applied for and acquired more than $160,000 in EIDLs for Hybrid Capital and Fens, claiming on the applications that his companies were not engaged in lending or investments.
He also admitted to falsely stating on his 2019 federal personal income tax return that his total income was $22,176, when in fact it was at least $541,000.
Sentencing is Jan. 30.
Oakland, New Jersey: Business owner Walter Hass, 62, of Hewitt, New Jersey, has admitted to a $3.5 million payroll tax evasion.
Hass owned and operated a shipping/logistics company and since 2014 has operated the company under three different names. From 2014 to 2022, he failed to pay over to the IRS at least $3.5 million in payroll taxes. Instead, he used company money to fund his personal lifestyle, including the purchase of luxury vehicles, high-end watches and jewelry, designer clothing items and accessories, tickets to sporting events, home renovations, vacations, water sports vehicles and extravagant meals.
The charge is punishable by up to five years in prison and a $250,000 fine, or twice the gross gain or loss from the offense, whichever is greater. Sentencing is April 22.
Fresno, California: Former resident Pilar Rose has pleaded guilty to tax evasion and obstructing an IRS audit.
From 2012 through 2015, Rose prepared false financial statements for her husband’s orthodontics practice that significantly underreported profits. Rose evaded more than $870,000 that she and her husband owed in federal taxes.
In June 2015, Rose had sought a $1.5 million home mortgage refinance loan on the couple’s mansion. She submitted copies of her and her husband’s federal returns that showed significantly greater income than was reported on the actual returns they filed with the IRS. The bank declined the loan after discovering the discrepancies.
A month later, Rose applied to a second bank for a home mortgage refinance loan and represented that their bank accounts had a combined balance of more than $250,000 when they had less than $3,000. She also submitted copies of her and her husband’s federal returns and a P&L that significantly exaggerated the profitability of her husband’s orthodontics practice. The second bank approved the loan.
In early 2016, Rose obstructed an IRS audit of her and her husband’s taxes. She altered hundreds of checks for the couple’s non-deductible personal expenses such as their mortgage, utilities, landscaping, pool cleaning, cars, credit cards and children’s college tuition, to make it appear as though the checks were for deductible business expenses. She also created false financial statements for her husband’s orthodontics practice to match the altered checks.
In 2017, Rose purchased a new BMW for some $90,000, financing $65,000 through a loan from a third bank. On that loan application, she represented that she was an attorney who made more than $600,000 per year. She was not an attorney, and she used the Social Security number of her husband’s former dental school classmate because she knew that using her real Social Security number would reveal a low credit score. The loan was approved.
Sentencing is March 17. She faces up to five years in prison and $100,000 fine for the tax evasion charge and an additional three years and a $5,000 fine for the obstruction charge. Rose agreed to forfeit her interest in more than $2.5 million of proceeds from the sale of her and her husband’s mansion and BMW that authorities previously seized.

Strongsville, Ohio: Dr. Suman Jana has pleaded guilty to corruptly endeavoring to obstruct the due administration of internal revenue laws.
Jana was a client of fraudulent tax shelter promoter Michael Meyer and his sub-promoter Rao Garuda, who used Meyer’s scheme called the “
Meyer and his co-conspirators marketed the scheme as a way for high-income clients to reduce their taxes by claiming they had donated valuable property to charities Meyer controlled while retaining complete control and use over their “donated” assets. Jana used the funds he claimed to have donated to charity to, among other things, purchase several cars for himself and his wife.
In 2017, after claiming five years’ worth of charitable contribution deductions, Jana bought back the company he had “donated” to Meyer’s charity for $10,000, reclaiming his purported donation and exiting the plan.
In April 2018, the Justice Department filed a civil complaint for a permanent injunction against Meyer and the following month served a civil subpoena on Jana requesting that he produce records in connection with the Ultimate Tax Plan. Meyer and Garuda instructed Jana to pretend that the buyback did not occur. Meyer prepared backdated transaction documents, written acknowledgements and promissory notes for Jana to sign and submit in response to the civil subpoena, the false documents making it look as if Jana signed the promissory notes at the time that he and his wife paid personal expenses out of the purported charity. Jana signed the documents.
Sentencing is March 7. Jana faces a maximum of three years in prison, as well as a period of supervised release, restitution and monetary penalties.
Athens, Georgia: Tax preparer Jessica Crawford has admitted to filing more than $3 million in fraudulent returns on behalf of clients.
FBI agents investigating a multistate unemployment benefit scheme conducted during the COVID-19 pandemic discovered text messages between individuals involved in the scheme and Crawford, a preparer with Crawford Tax Services. Crawford filed for pandemic unemployment assistance benefits on behalf of those individuals, who had created fake businesses or submitted false information to fraudulently obtain benefits. Crawford received a percentage of the benefits.
In April 2022, an undercover IRS agent met Crawford to have taxes prepared and Crawford asked if the agent did anything on the side. At first the agent responded no. When Crawford said that expenses could be deducted if he did, the agent replied that he mowed an aunt’s lawn sometimes and Crawford said that was “good enough,” authorities said.
Despite the agent providing no income or expense amounts, Crawford created a Schedule C business for landscaping on the agent’s federal income tax return based solely on that interaction. Crawford prepared a 1040, including a fictitious Schedule C loss of $19,373, and claimed the Earned Income Tax Credit, the Child Tax Credit and qualified business income deduction that were affected by the fraudulent Schedule C loss. As a result, the agent’s return claimed a fraudulent federal refund of $12,359.
The IRS reviewed 1,261 returns filed by Crawford in 2020 and 2021 and determined that Crawford fraudulently filed returns for clients that resulted in losses to the IRS exceeding $3 million from falsely claimed 7202 credits for sick leave and family leave, tax credits and dependent care credits.
Crawford faces a maximum of 30 years in prison to be followed by five years of supervised release and a $1 million fine. Sentencing is March 19.
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Donor-advised funds are continuing to grow while enjoying substantial tax deductions for charitable giving even as many contributions go to other DAFs and private foundations instead of actual charities, according to a new report.
The
National sponsor assets have grown at by far the fastest pace, increasing 92% from 2020 to 2023. (National sponsors are those with no specific geographic or cause-based mission, such as Fidelity Charitable, the National Philanthropic Trust and the American Endowment Foundation.) While they represent only 3% of DAF sponsors, national sponsors held 70% of all DAF assets, took in 73% of all DAF contributions, and gave out 61% of all DAF grant dollars in 2023.
The median DAF account size across all sponsors was $135,086 in 2023. National sponsors had the largest accounts, at $390,910. Donation processor accounts were by far the smallest, at $305. (Donation sponsors administer mass-scale contributions, such as workplace giving, payroll deduction or crowdfunding programs. Some examples include PayPal Charitable Giving Fund, Network for Good and American Online Giving Foundation.)
The median DAF payout rate across all sponsors was 9.7% in 2023. This payout has stayed around 9 to 10 percent for the past four years. Donation processors have by far the highest payout rates of any sponsor type, granting out around 82% in any given year. Community foundation sponsors have the lowest rates, granting out around 8 to 9%. (Community sponsors mainly support charities in a specific geographic region such as a state, county or city. Examples include the Silicon Valley Community Foundation, the Chicago Community Trust and the Community Foundation of the Ozarks).
DAF-to-DAF grants accounted for an estimated $4.4 billion in 2023. Some of these go-between gifts are the commercial sponsors’ largest. In 2023, for example, Schwab Charitable’s third-largest grant was to Fidelity Charitable, for $122 million. That same year, Fidelity Charitable’s largest grant was to National Philanthropic Trust, at $195 million, with Schwab Charitable in second place at $183 million.
Private foundations gave at least an estimated $3.2 billion dollars in grants to national donor-advised funds in 2022. Private foundations’ 5% annual payout requirement is supposed to ensure their grants go to operating charities in a timely way, but because DAFs have no payout or account-level disclosure requirements, foundation-to-DAF grants can undermine the foundation payout rules and transparency rules as well.
The report argues for more transparency. “The public only has access to aggregate sponsor-level information about DAF grants and payout rates,” said the report. “This means that individual DAF accounts that pay out at high rates may be providing statistical cover for DAF accounts that pay out very little, or nothing at all. And there is no way for regulators or the public to trace significant donations back to major donors, as is possible for private foundations.”
The report noted that every year, more charitable dollars are diverted to donor-advised funds while nonprofits on the ground struggle harder to get funding. “Donors reap significant tax savings from DAF giving, and those savings are subsidized by other American taxpayers with no guarantee of commensurate public benefit,” said the report. “In the absence of adequate transparency, DAFs are ripe for mistreatment by donors and for-profit actors. Congress could ensure that DAFs are more accountable to the public and move funds in a timely manner to charities on the ground.”
Accounting
What clients expanding businesses into other states should know about SIT and SUI
Published
9 hours agoon
April 7, 2025
It’s an exciting time for business owners when they take their small businesses to the next level, expanding to other locations.
While there are many moving parts when opening a new office or store in the same state, business clients have additional tasks to tackle when branching out into other states. As a trusted accounting and tax resource, you will likely be their go-to for answers when they have questions about what’s involved in those efforts.
In this post, I will cover three important compliance components of setting up shop in another state.
Foreign qualification
Foreign qualification is the process of registering an existing entity in one state as a foreign entity in another state to legally allow it to conduct business there. Different states have different
After a company has foreign qualified, it must fulfill the state’s business compliance requirements — e.g., obtain licenses, file annual reports, comply with employment laws, and pay applicable state (and possibly local) taxes.
State income tax
State income tax is a state-mandated tax that most states collect on business income and employees’ pay. Any business with employees in the state is responsible for withholding SIT from employees’ gross wages or salaries and remitting that money to the correct state tax agency. Typically, state tax rates vary by state and differ for business entities and individuals.
Currently, nine states do not levy an individual income tax, and a few also do not have a corporate income tax:
- Alaska (no individual income tax, but has a graduated corporate income tax);
- Florida (no individual income tax, but has a corporate income tax);
- Nevada (no individual income tax; no corporate income tax, but levies a gross receipts tax on business entities with gross revenue exceeding $4 million in a fiscal year);
- New Hampshire (doesn’t tax individual’s wage income and is eliminating the tax on dividends and interest income for the 2025 tax year; has a Business Profits Tax and entities with gross receipts over $298,000 are subject to a Business Enterprise Tax);
- South Dakota (no individual or corporate income tax);
- Tennessee (no individual income tax; no corporate income tax, but has a business tax, a privilege tax for doing business by making sales of tangible personal property and services, which usually consists of two taxes: a state business tax and a city business tax);
- Texas (no individual income tax; no corporate income tax, but has a franchise tax, a privilege tax on business entities formed in or doing business in the state);
- Washington (no individual income tax; no corporate income tax, but imposes a business and occupation or public utility tax on gross receipts);
- Wyoming (no individual income tax or corporate income tax, but has a Business Entity License Tax).
Note that cities and counties in some states charge their own income tax as well, even if the state does not levy income tax.
Before withholding SIT and local income tax from employees’ pay in a state, an employer must register for a state-issued employer identification number and follow the local government’s rules for registering to withhold and remit its income tax. Businesses must pay close attention to meeting the state and local payroll reporting and payment deadlines to avoid fines and penalties.
State unemployment insurance
Businesses with employees in a state with its own unemployment insurance program must also register to contribute to that program. Like the federal unemployment program, SUI (also known as SUTA) provides temporary payments to workers who become unemployed due to no fault of their own. A few states — Alaska, New Jersey and Pennsylvania — require employees to pay a portion of the SUI. The laws of the state establish the taxable wage threshold and the unemployment tax rate.
Employers must pay federal and state unemployment insurance for each employee based on the employee’s wages or salary. The 6% FUTA tax applies to the first $7,000 paid (after subtracting any FUTA-exempt payment amounts) to each employee during a calendar year. Please note most states have a credit reduction amount that reduces the 6% FUTA tax; the credit reduction rates can change each year for each state. States’ SUI rates vary, with each state determining the wage base, or threshold, for when SUI kicks in. Businesses can anticipate that SUI tax rates might change from year to year in response to economic conditions.
To register for SUI, businesses must register with the state department (e.g., Department of Revenue or Department of Employment Security) responsible for unemployment taxes. Businesses need an Employer Identification Number from the IRS to set up an account with the state for filing and remitting SUI taxes. Generally, states require businesses to report and pay their SUI quarterly.
There’s more
Also, inform business clients that some states require employers to pay or withhold additional payroll taxes. For example, employers in California must pay an Employment Training Tax, which provides money to train employees in specific industries and withhold or pay State Disability Insurance from employees’ paychecks, which temporarily pays workers when they’re ill or injured due to non-work activities or for pregnancy, and Paid Family Leave benefits. In Kentucky, many counties and cities impose an Occupational License Fee on individuals’ payroll and the net profits of a business.
Also, businesses with workers on payroll in a state must pay for workers’ compensation insurance; no portion of that cost may be deducted from employees’ pay.
The bottom line
As your clients’ trusted tax advisor, I encourage you to provide the most clear and comprehensive expertise that your licensing allows so your clients understand their tax and payroll obligations when they expand their operations to other states and localities. Also, make them aware that states’ rules and regulations vary for companies registering as foreign entities within their jurisdictions. It’s critical that your business clients research the requirements that apply to them and get the professional legal guidance they need to fully understand and comply with their responsibilities.
Accounting
Trump tax cut, debt limit plan advances amid tariff turmoil
Published
11 hours agoon
April 7, 2025
Senate Republicans took a major step toward enacting President Donald Trump’s tax cut agenda and increasing the U.S. debt ceiling, potentially injecting a small degree of certainty into financial markets roiled by the president’s tariff policies.
The Senate early Saturday morning passed the budget resolution by a 51-48 margin after an overnight marathon of votes on amendments. Two Republican senators, Susan Collins of Maine and Rand Paul of Kentucky, joined all Democrats in opposing the budget resolution.
The
It also permits for $1.5 trillion in new tax cuts over a decade, and calls for a $5 trillion increase to the federal borrowing limit to avert the Treasury Department hitting the debt ceiling this summer.
The vote comes at a perilous moment for the economy after Trump unveiled tariffs on nearly every country this week, causing global stock markets to tumble and sparking fears of a worldwide recession.
Republicans have described the tax cuts — a proposed total of $5.3 trillion over 10 years in the Senate version and $4.5 trillion in the House’s — as the next phase of Trump’s two-part economic agenda after the tariffs. The president’s allies argue that a fresh round of levy reductions will boost markets and provide certainty for businesses to invest. However, it’s not clear if the scope of the tax package counter the tariff fears gripping investors.
Congressional Republicans say renewing the expiring portions of Trump’s first-term cuts are imperative to avert a tax hike on U.S. households next year.
“A typical family of four making $80,000 a year would end up sending an additional $1,700 to the government next year,” Senate Majority Leader John Thune said.
The budget also calls for $150 billion in new funds for the military and $175 billion for immigration efforts, two top spending priorities for Trump, despite broader efforts to slash the federal workforce and budget.
Political posturing
Democrats said the GOP plan will skew tax benefits toward affluent households, at a time economists say lower-and-middle class individuals are poised to bear the brunt of the price hikes from tariffs on imported goods.
“This is the Republican agenda, plain and simple: billionaires win, American families lose,” said Senate Minority Leader Chuck Schumer of New York..
The budget resolution heads to the House next week where Speaker Mike Johnson will be faced with the challenge of wrestling the measure through his fractious group of Republicans, where he can only afford to lose a handful of votes.
“I look forward to working with House leadership to finish this crucial first step and unlock legislation that strengthens our economic and fiscal foundations,” Treasury Secretary Scott Bessent, who was involved in developing the Senate plan, said in a statement.
Some fiscal hawks among House Republicans, including Kentucky’s Thomas Massie and Ralph Norman of South Carolina, have grumbled about the plan for not calling for enough spending cuts.
Texas Representative Chip Roy, a spending hawk and Freedom Caucus member, said he’d vote against the Senate budget if it were brought to the House floor. In contrast, the House version “establishes important guardrails to force Congress to pump the brakes on
The Senate budget resolution provides for at least $4 billion in spending reductions over a decade. That’s significantly lower than the $2 trillion target envisioned in an earlier House version.
Spending squabble
“The Senate response was unserious and disappointing, creating $5.8 trillion in new costs and a mere $4 billion in enforceable cuts, less than one day’s worth of borrowing by the federal government,” House Budget Chairman Jodey Arrington of Texas said Saturday in a statement. He said he’ll work to ensure the final package has large spending cuts.
Senate leaders drastically scaled back the spending cut parameters after several Republicans warned that widespread reductions would likely harm benefits for their constituents, including Medicaid health coverage for low-income households and those with disabilities.
If the House rejects the Senate budget, a new compromise would need to be worked out between the two chambers before they can begin crafting the tax legislation.
Republicans have a series of hard — and potentially divisive — choices to make to squeeze their long list of tax cut proposals into the $1.5 trillion ceiling they set for themselves.
Senate Finance Committee Chairman Mike Crapo has said he has received more than 200 requests for tax cuts to include in the bill.
Atop the list are several campaign trail pledges from Trump, who’s called for eliminating taxes on tipped wages and overtime pay. The president has also said he wants to create a new deduction for car buyers and seniors.
A group of House lawmakers have demanded an increase in the $10,000 cap on the state and local tax deduction, and most Senate Republicans back a repeal of the estate tax.
The budget also calls for using a gimmick to count the extension of Trump’s 2017 tax cuts — estimated to cost nearly $4 trillion — as $0 for official scoring purposes.
This decision will have to get the approval of the Senate parliamentarian before the legislation goes for a final vote, a risky gambit that could leave the GOP rushing at the last-minute to scrounge for offsets for the tax cuts.
Republicans agree on a relatively narrow universe of spending cuts to include in the legislation, including reductions to food stamps, Pell Grants and renewable energy subsidies.
The Trump administration is also weighing a handful of tax increases to offset the costs — a surprising development for a party that was once universally opposed to any levy hikes.
Among the measures under consideration are introducing a new income tax bracket for those earning
Lawmakers envision enacting the final tax package sometime between May and August. As long as legislation adheres to the rules detailed in the budget resolution, it can pass with just Republican votes.

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