Taxable Talk

It’s a gorgeous day here in Las Vegas today, a perfect day for a round at one of the many golf courses in town. It apparently was just as nice Wednesday in Colorado when three individuals chose to a play 18 holes rather than get sentenced for 18 counts of tax fraud. They got in front of the judge Thursday. As Joe Kristan reported, they’ll likely have plenty of time to ponder their life when their sentenced in a couple of weeks.

Your salary is taxable, of course. What about your bonus? Of course, that’s taxable. One business owner in Texas thought that wasn’t the case.

Robert Earl Carter is the owner and Chief Executive Officer of Enterprise Advisory Services Inc. From their website, it’s clear they specialize in government work, including contracts at NASA.

When you work with the government, you have to open your books to them. Apparently Mr. Carter forgot about that portion of dealing with the government. It also appears that the NASA Inspector General saw something on the books of EASI.

Back in 2009 Mr. Carter received a bonus check at year-end for $195,000. There’s nothing wrong with that, but there’s a lot wrong with calling it a “reimbursement.” It’s likely that caught the Inspector General’s eye, and that caused a referral to the IRS Criminal Investigation (CI) unit. And when CI discover another $309,821 of bonuses were paid to a company controlled by a family member who returned $286,821 to him one month later an indictment followed. Mr. Carter pleaded guilty two months later.

With a plea deal, you can hope for a sentence less than the maximum. That wasn’t the case yesterday.

It seems that Mr. Carter donated $500,000 of art to Texas Southern University. Mr. Carter claimed that deduction on his 2005 tax return, with carryover deductions extending to 2010. There was one minor problem: Texas Southern hadn’t received any art. Yes, to make a charitable donation you do have to actually donate something. Oops.

Judge Keith Ellison wasn’t amused by this faux pas. He found that Mr. Carter had not accepted responsibility for his criminal conduct and that his sworn testimony regarding the art wasn’t credible; he was sentenced to the maximum three years (36 months). He also was ordered to pay a $75,000 fine.

As always, it’s easier to just pay your taxes in the first place…but that usually doesn’t register with the Bozo tax contingent.

But we already knew that, right? Nor are home improvements are your home itself. A Florida doctor learned that the hard way.

Dr. Krishna Tripuraneni pleaded guilty this week to evading tax on $18,128,066 million of income. Dr. Tripuraneni provided his tax professional with profit and loss statements used to prepare his returns for his businesses (he has a professional corporation and a partnership) and his personal return. The P&L’s had inflated expenses and, thus, understated his income from 2004-2008.

Not stated in the DOJ press release is that Dr. Tripuraneni has made restitution on about $10.2 million of the $11.8 million in tax and penalties he owes.

A helpful hint to potential fraudsters out there: Conspicuous consumption is not a good idea. Even better, skip the tax fraud. As I’ve said many times before (and will say many times in the future), it’s always a lot easier to just pay your taxes in the first place.

Francisco Legaspi didn’t want to go to jail. Back in November 1992, he pleaded guilty to tax evasion. Instead of showing up for his sentencing in January 1993, he headed to Mexico and then Canada to avoid prison. That worked for 20 years. In 2012, the State Department found him when the Bureau of Diplomatic Security found his Facebook page. (A helpful hint to any fugitives out there: Avoid posting anything on the Internet. Law enforcement reads the Internet, too.) They forwarded his information to the Royal Canadian Mounted Police who arrested him; the Mounties always get their man.

It was justice delayed last week as Mr. Legaspi received 21 months at ClubFed. He also received one year of supervised release following his term at ClubFed.