If You’re Asking for Bail, Don’t Hide Your Cryptocurrency Accounts

The saga of poker playing Supreme Court litigator (and, for the attorneys who read this, SCOTUSblog founder) Tom Goldstein continues.  Mr. Goldstein was arrested late yesterday, and will be spending his time (at least for a while) at ClubFed while he awaits trial on 22 counts of tax fraud related to allegedly not claiming his poker winnings on his tax returns while taking poker losses as a business expense.

Mr. Goldstein is alleged to have moved millions of dollars in cryptocurrency (after supposedly having a negative net worth) from wallets he didn’t disclose (at the time of requesting bail).  (Mr. Goldstein denies these allegations.)  Separately, he’s allegedly attempting to prevent a potential witness from assisting in the investigation (another “Don’t try this yourself”–if true).

US Magistrate Judge Timothy Sullivan ordered Goldstein to be detained, noting:

I find…that there is clear and convincing evidence of a violation of pretrial release conditions (not telling Pretrial about two cryptocurrency wallets and transferring funds without prior Pretrial approval) and that Mr. Goldstein has violated his release conditions. Furthermore, there are no conditions and/or combination of conditions that can be established to reasonably assure compliance given the seriousness of the violations and the Court’s continued concern of risk of flight.  Mr. Goldstein is unable and/or unlikely to abide by any [conditions of release] at this time.

Ouch. But assuming the allegations (of breaking the previous conditions of release) are true, Mr. Goldstein has only himself to blame.  Not disclosing material information when you know you’re being scrutinized is not a good idea.

I don’t know if the Goldstein case will rise to the level of Wesley Snipes saga of over a decade ago, but it’s looking that way today.

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20 Years Ago Today…

…I started this blog.  I was a resident of Irvine, California back then.  It’s been an interesting 20 years.

I have no idea what the next 20 years will bring.  If you told me in 2005 that within 20 years I would see:

  • Donald Trump elected to two non-consecutive terms as President of the United States;
  • I would be residing in Las Vegas, Nevada;
  • Our office would expand 500%;
  • The IRS would have the same issues with correspondence in 2025 as they did in 2005; and
  • I would still be happy with what I’m doing as a career.

…I would likely have thought you insane.

I cannot tell you if I’ll continue this blog for the next 20 years.  As I tell all clients, I don’t have a working crystal ball.  (If I did, I’d make one bet a day at one of our local casinos.  I’m not that greedy.)  But I do hope to continue it for the foreseeable future.  Here’s a link to my first post (about myself) and the second post (why I started this blog).

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How Many Months Are There in a Year?

When you were a child you learned that a minute has 60 seconds, an hour has 60 minutes, a day has 24 hours, a month has 28 to 31 days, and that there are 12 months in a year.  Believe it or not, a client of ours is still dealing with an issue related to the IRS thinking his return was mailed in the 15th month of the year.

I wrote about this case (in brief) last year.  Here’s what I wrote about his issue last year:

Client #3 received a notice alleging his return was untimely filed. His return was required to be mailed; he was outside the United States and sent it with tracking from New Zealand (timely). It wasn’t received timely (but that’s the fault of the Postal Service, not my client) and doesn’t impact him; there’s a rule in tax called the Postmark Rule which governs this situation. My client has now received a letter from IRS Collections even though we disputed the entire issue months ago.

What I didn’t say is that his receipt from the New Zealand postal service shows his return was mailed on November 15th (but shown on the receipt as 15/11/2022; most of the world puts the day before the month on receipts).  My client had requested (and was granted) a second extension until December 15, 2022 to mail his return.  It didn’t get to Austin, Texas until 2023, but there’s a rule covering that: the Postmark rule.  When you mail something using the US postal service using certified (or registered) mail, that postmark is considered the date of filing.  That’s law; it’s Internal Revenue Code § 7502(a)(1).

But my client’s return was mailed from New Zealand.  Well, he’s covered, too; there’s a regulation covering this situation.  It’s 26 CFR § 301.7502-1 (c)(B)(1), which reads:

In general. If the postmark on the envelope is made other than by the U.S. Postal Service—

(i) The postmark so made must bear a legible date on or before the last date, or the last day of the period, prescribed for filing the document or making the payment….

The IRS is alleging my client mailed this in 2023; however, we have a picture of the envelope and the receipt (both show mailing on November 15, 2022).

We attempted to get the penalty for late filing reversed at the notice stage, but the IRS refused.  We filed an appeal in July 2024.  Appeals just wrote back (sent to us in late January 2025) telling us that the IRS did not follow its internal procedures in sending the case to Appeals; it’s been sent back by Appeals to the IRS to rectify the errors.

Meanwhile, my client remains in limbo.  Eventually, someone at the IRS will realize that we’re no longer in 46 B.C. (a year with 15 months!), and the Julian calendar introduced then has exactly twelve months (and we’ve used 12 months since then).


In 45 B.C. Julius Caesar introduced the Julian calendar.  But apparently there had been too many omitted leap months in the past, so 46 B.C. had 15 months (and 445 days).

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BOI Reporting: It’s Back (soon?)!

The US Supreme Court removed the stay that the 5th Circuit Court of Appeals had removed (after putting it on) that stayed enforcement of the Corporate Transparency Act that required Beneficial Ownership Information reporting. This means that if you have not yet filed your Beneficial Ownership Information (BOI) report you must do so likely will soon need to.  I suspect that FinCEN will give entities a couple of weeks to comply.

What does this mean? If you have not already filed your BOI report, you must do so now!  should prepare to do so.  You can find more information on BOI reporting at FinCEN’s web page on BOI reporting.

I will update this post with the actual FinCEN deadline for filing (once it’s announced).


I received an email regarding a second nationwide stay on BOI reporting.  Even though the Supreme Court released the stay in McHenry v Texas Top Cop Shop, a second nationwide stay remains in place in a case called Smith v Department of the Treasury.  However, it’s clear that if the US government appeals that stay (to the 5th Circuit), that the stay will be removed.  Of course, we now have the Trump Administration, and it’s unclear what their stand is on BOI reporting.

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Supreme Court Litigator, High-Stakes Poker Player, and Tax Felon?

This morning, a friend texted me, “Russ, you MUST read this!” with a link to this story about Supreme Court litigator Tom Goldstein.  Mr. Goldstein was indicted on numerous tax-related charged regarding how he handled his high-stakes poker playing.

Mr. Goldstein is well known in the legal community as an appellate attorney who has argued numerous cases in front of the Supreme Court.  He was successful, and one of his hobbies was playing poker.  Not just the typical games played in a casino; he played really, really high-stakes games for millions of dollars.  He spent the requisite time studying, and he appears to have been an overall winning player.

In reading through the 22-count, 50-page indictment, one can see he played in very high-stakes games in Macau, Beverly Hills, and elsewhere; he had wins and losses of $10 million or more.  But the Department of Justice alleges that when he won those winnings they didn’t find there way to his tax returns, and his losses were sometimes paid out of his firm as business expenses.  Adding in alleged lies to mortgage companies and then not paying his taxes, there are big problems facing Mr. Goldstein.  Of course, these are just allegations today.

The indictment is quite readable and, in fact, reads far more like a plot of a novel.  A very successful attorney allegedly engages in sinful behavior, cheats the government, womanizes, and gets caught.  A helpful hint to anyone who is prominent: Just pay those taxes!  Mr. Goldstein, who certainly knows a lot about the law, allegedly forgot that lesson.

Posted in Gambling, Tax Evasion, Tax Fraud | Tagged | Leave a comment

IRS Extends California Fire Disaster Area Deadlines Until October 15th

The IRS announced this afternoon that taxpayers in Los Angeles County impacted by the current wildfires have all tax deadlines extended until October 15th. This includes:

  • Individual and C-Corporation Tax Returns (and payments of tax) due on April 15th;
  • Partnership and S-Corporation Tax Returns (and payments of tax) due on March 17th;
  • Estate and Trust Tax Returns due (and payments of tax) on April 15th;
  • Tax-exempt Organization Returns due on May 15th;
  • First, second, and third quarter Estimated Tax Payments due on April 15th, June 16th, and September 15th; and
  • Payroll and excise tax returns due on January 31st, April 30th, and July 31st.

This extension is automatic. It’s possible this will also be extended to taxpayers in Ventura County (the “Kenneth Fire” is burning in that county).  UPDATE: Luckily, the Kenneth Fire appears to be 100% contained with minimal damage.

California’s Franchise Tax Board will conform to this extended deadline (California law mandates this).  UPDATE: Governor Newsom announced the extension on Sunday.

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Personal Tax Return Filings to Begin on January 27th

The IRS announced today that, as expected, efiling of tax returns will begin on Monday, January 27th.  Individual tax returns are due on Tuesday, April 15th.

We strongly advise efiling your tax returns (if possible), and we also strongly advise you obtain an IP PIN (an IRS Identity Protection PIN) if you have not already done so.  You can obtain one on the IRS website.  Do note that you must have an account on IRS.gov in order to obtain an IP PIN (an IRS online account requires you to use id.me).  An IP PIN prevents anyone without that PIN from efiling a return with your social security number.

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New Jersey Division of Taxation Wishes to Add More Identity Theft

One of our clients received a notice from the New Jersey Division of Taxation asking for additional documentation for a previously filed tax return (copies of W-2s, 1099s, and the federal tax return).  New Jersey gave two options for responding:

  • Email to [omitted]@treas.nj.gov
  • By mail

Is New Jersey aware of the risks of identity theft by emailing documents?  Is the Division of Taxation aware of their own guidance on thisUnder the section on “How to Prevent Identity Theft and Protect Your tax Refund” the NJ Division of Taxation helpfully notes:

Do not provide personal information through e-mail, text messaging, or social media.

Yet the Division of Taxation asked someone to email personal information.  I realize that the letter my client received is a form letter, and it’s the New Jersey Division of Taxation’s policy that’s the issue (not the specific representative my client is dealing with).  The New Jersey Division of Taxation needs to both remove the option of emailing in response to notices and add a secure website upload for responding to notices.

If a tax agency asks you to email personally confidential information, just say no.  Go to the Post Office and send the response by certified mail.

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The 2024 Tax Offender of the Year

One year, perhaps, there won’t be so many nominees for my annual Tax Offender of the Year award…but this isn’t the year.  We even have a repeat nominee (and I strongly considered giving that nominee the award).  As a reminder, to win this award you have to do more than just cheat on your taxes; it needs to be big-time cheating or a series of Bozo actions.

First, we have some dishonorable mentions:

  • The Train to Nowhere, California’s high-speed rail project, that voters were told in 2008 would cost just $9.95 billion and would create 450,000 jobs, won our 2018 award. Well, the cost keeps growing (at least $130 billion, maybe more) and there’s no opening in sight.  Yes, it’s a California project but it’s receiving federal funds (for now; I suspect that might change on January 21, 2025).
  • Joseph Schwartz of Suffern, New York, owned nursing homes and withheld payroll taxes but didn’t remit them. If you want to commit a crime that has a long-term 0% chance of success and will always be investigated, employment tax fraud is the place to go! Employees will file their W-2s, the IRS won’t see the money, and it just never works.  And this case involved $38 million in tax fraud.
  • Michael Meyer of Davie, Florida, an attorney from Davie, Florida, used his legal knowledge to create “The Ultimate Tax Plan.”  And what a plan it was!  High-income individuals could donate expensive property to charities, keep the assets for their own use through tax-free loans, and then buyback the assets at a discount!  Hmm, to donate something to charity you must actually give it to that charity (you can’t keep it or buy it back at a discount).  Did I mention that the charities were bogus?  If someone ever approaches you with a scheme like this to save money on your taxes, run (don’t walk) in the other direction!  Mr. Meyer is enjoying 8 years at ClubFed and will have to make restitution.
  • Our final dishonorable mention is local (to me).  Raul Gil owned three Casa Don Juan restaurants here in Las Vegas.  He practiced “cash and carry” for his books: he carried away the cash and gave instructions to his bookkeeper to leave it off his financial statements (which were subsequently used for preparing his tax returns).  He also instructed his accountant to provide a Profit & Loss statement that matched the falsified records, and he lied to both the IRS Revenue Agent conducting an audit and IRS Criminal Investigation.  This being Las Vegas, we’re talking millions in cash ($5.1 million) with a tax loss of $1.6 million.  Mr. Gil is spending 37 months at ClubFed and must make restitution.

From San Antonio we learn of our third place finisher, Janet Yamanaka Mello.  Ms. Mello was a financial program manager for the US Army at Fort Sam Houston.  She formed a business called “Child Health and Youth Lifelong Development” (CHYLD).  The problem was that CHYLD did only one thing: fraudulently obtain grant funds from the 4-H Military Partnership Grant Program.  Ms. Mello obtained over $108 million over six years.  As is typical, the money didn’t go toward children’s development; rather, it went for clothing, cars, real estate, and other personal items.  Of course, the $108 million didn’t make it to her tax returns.  She is spending 15 years at ClubFed.

Jack Fisher, a CPA, and James Sinnott, an attorney, finished in second place for their roles in fraudulent syndicated conservation easements.  “Using inflated appraisals, backdated documents and other sham actions, these conspirators generated more than $1.3 billion in fraudulent syndicated conservation easement tax deductions, causing hundreds of millions of dollars in losses to the U.S. Treasury,” said Stuart Goldberg, the Acting Deputy Assistant Attorney General of the Justice Department’s Tax Division.  And what a program it was! For the cost of the program, you got 4.5 times the tax write-off!  It sounds too good to be true (and it was)!  They each were sentenced to over 20 years at ClubFed and must make restitution of over $400 million each.


Back in 2022, I highlighted a scheme that (at that time) had no tax impacts:

Before I get to the winner, I want to highlight a case that unfortunately has no tax charges.  Had it had any such charges, this would be tops on my list for 2022.  Instead, this is a pure fraud case.  Karl S Greenwood pled guilty to wire fraud and money laundering related to “OneCoin” earlier this month.  Mr. Greenwood allegedly earned €2.735 billion in fraudulent profits from this scheme.  He, and alleged co-conspirator Ruja Ignatova (aka “the Cryptoqueen”) did not have a high opinion of their victims:

“In an August 9, 2014, email between Greenwood and Ignatova, Ignatova described her thoughts on the ‘exit strategy’ for OneCoin. The first option that Ignatova listed was, ‘Take the money and run and blame someone else for this . . . .’ And in a September 11, 2016, exchange with Ignatova’s brother, Konstantin Ignatov, Greenwood referred to OneCoin investors stating, ‘These ppl are idiots,’ to which Ignatov responded, ‘as you told me, the network would not work with intelligent people ;)'”

If you haven’t figured it out, OneCoin never had any value and was deliberately designed as a worthless cryptocurrency.  Well, that same scheme has now gotten tax-related charges for a participant.  Mark Scott was an attorney for a well-known international law firm.  Mr. Scott had boasted of earning “50 by 50”–that’s $50 million by the time he turned 50.  And he did!

Back in 2015, he was introduced to Ms. Ignatova. It would be one thing to get Ms. Ignatova and OneCoin as clients and provide legitimate legal advice. It’s quite another to create fake private equity investment funds in the British Virgin Islands, disguise transfers of $400 million into those funds, and then launder the funds both in the Cayman Islands and Ireland.  Mr. Scott did earn more than $50 million for his money laundering; he spent some of the funds on a Ferrari, several Porsches, and seaside homes on Cape Cod.

Unfortunately for Mr. Scott, the IRS found out about this.  He was convicted in 2019, and just sentenced to 10 years at ClubFed, a “money judgement” of over $392 million, and forfeiture of other personal items.  Yet another worthy winner of our “Tax Offender of the Year” award!


With that, I wish you and yours a Happy, Healthy, and Prosperous New Year!  We’ll see you in 2025!

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I’m Not Making This Up: BOI Is Stayed Again

I swear I’m not making this up: Tonight, the 5th Circuit Court of Appeals has reversed the previous ruling, and once again the Beneficial Ownership Information (BOI) reporting requirements of the Corporate Transparency Act (CTA) are again stayed nationally.

This so reminds me of a comedy, with our heads being forced to turn first to the left and then to the right.  In any case, while this most recent decision could be appealed to the Supreme Court, it’s far more likely nothing will happen until after the appeal is heard.

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