Taxable Talk

No means no. Well, to most of us it does. But not so for Jean Marie Boursiquot, recently of Deltona, Florida but soon to be residing at ClubFed. Mr. Boursiquot was a professional tax preparer (part of the Bozo wing of our profession); he specialized in Haitian immigrants.

Mr. Boursiquot was successful, too. Of course, this may have been due to him not taking no for an answer. If a client came to him and said, “Don’t prepare my return,” he prepared those returns…and pocketed the refunds. Yes, he forged signatures on tax returns and deposited tax refund checks into his own business bank account. Isn’t amazing how these people never owe the IRS? But I digress….

He was arrested on charges of not filing a tax return for 2002, and falsifying his 2003 return. (For 2003 he claimed income of $41,000 while living in a $750,000 house.) He pleaded guilty, and he was sentenced last week.

Back in 2006 he was ordered to repay the government $858,000. I guess that lesson didn’t sink in. Perhaps this one will. Mr. Boursiquot will spend 30 months at ClubFed and must make restitution of $150,000. Sometimes no really does mean no.

Earlier today I posted my mixed opinion on regulating tax professionals. Joe Kristan has noted there are plenty of laws already on the books that tax preparers must comply with.

But the Bozos are out there. Take Georgia Gaines of Lake Worth, Florida. A helpful soul, Ms. Gaines’ clients were aided by over $1.1 million of invented deductions. All was well until the IRS found out.

Unfortunately, the IRS also looked at Ms. Gaines’ own returns. Somehow, $200,000 of income from her 2002-2005 tax preparation work didn’t appear on the return.

Ms. Gaines has now pleaded guilty to five counts of preparing false tax returns and five counts of filing her own false tax returns. Ms. Gaines will be sentenced in August and will have to make restitution and is also likely to find herself at ClubFed for just under three years (based on federal sentencing guidelines).

Two corporate tax fraud stories crossed the wires today. In one case the participant will spend over 20 years at ClubFed; the other will almost certainly spend significant time there too.

Frank Amadeo bragged that one day he’ll rule the world. Well, he didn’t send $181 million to the IRS, so perhaps he could have afforded a small country. That’s after he spends the next 22 1/2 years at ClubFed. He was sentenced yesterday and must also make $181 million in restitution. If there’s a certainty in tax prosecutions, it’s that if you don’t remit trust fund taxes you will be prosecuted. Peter Pappas has more on this story.

Meanwhile, two orders of magnitude less still is a large amount of fraud. Fisher Sand & Gravel operates twelve plants and is a big player in the aggregate industry. The IRS began an audit and discovered that one executive, Michael Fisher, had used company funds for an African safari and to renovate a truck stop he owned. Since those were personal expenses (and not “necessary and ordinary” business expenses) that’s a problem. Mr. Fisher will be pleading guilty to tax fraud later this week. Two other executives, Amiel Schaff (the former CFO) and Clyde Frank (the former comptroller) previously pleaded guilty. The company itself is under a deferred prosecution agreement and will be making restitution of $1.17 million relating to 2001-2004 corporate taxes. Additionally, the company is cooperating in a probe of 2005-2009 corporate taxes.

I’ve covered Bozo tax preparers before, but since I’m in Las Vegas (to attend the annual CSEA SuperSeminar for continuing education) I’ll look at a resident of Sin City.

Caroline Reyes operated Carol’s Tax Service (also called Central Tax Service). She was probably popular with her clients: She charged low rates and she did more than her best to make sure that her clients got refunds. Unfortunately, her methods for the latter included adding phony deductions and inflating other itemized deductions for her clients. Those are illegal, and it’s called tax fraud. Ms. Reyes pleaded guilty today to 20 counts of tax fraud.

After the IRS started to investigate her, Ms. Reyes sent the IRS false receipts to try to prove her returns were kosher. Instead, she’ll be sentenced later this year and will likely end up visiting ClubFed.

Earlier this year I reported on Thomas Jimenez. Mr. Jimenez, of Plantation, Florida, created a company, and then generated a $2.8 million capital gain in the stock of that company. Unfortunately, he forgot to report that gain on his tax return. He pleaded guilty to tax evasion earlier this year.

Last week Mr. Jimenez was sentenced to three years at ClubFed, with a year of supervised release to follow his stay.

Gene Haas won the coveted Tax Offender of the Year award for 2007. As I’ve detailed Mr. Haas lost a patent lawsuit and decided to get back at the government by committing tax fraud. He was sentenced to 24 months at ClubFed.

As reported in the Ventura County Star, Mr. Haas will be released after serving 16 months. His sentence was shortened after successfully going through a 500-hour treatment for alcoholism.

I am hopeful that Mr. Haas has realized the errors he made. He’s still the owner of Haas Automation, and hopefully he’ll be able to help that company in the future.