New York Paralegal Blog

When it comes to big new laws, the headlines often tout broad benefits. But a closer look at what's being called "The One, Big, Beautiful Bill" reveals a more complex picture, especially for those making $30,000 or less per year. While there are some perks like deductions for tips and overtime, a deeper dive suggests potential downsides that could hit low-income households hardest in the long run. The Good (But Not Totally Free) News: Tips and Overtime You might have heard about the bill's promise of "no tax on tips and overtime." This is a big draw, especially for service industry workers and those who put in extra hours. The reality is that it's more of a tax deduction than a complete tax elimination. Think of it this way: these earnings will be subtracted from your income before your federal income tax is calculated. This means you'll owe less in income tax. However, a crucial point to remember is that Social Security and Medicare taxe...

Paramus, NJ – A New Jersey Certified Public Accountant (CPA), Ofer Gabbay, has admitted to his role in a scheme that helped wealthy clients cheat on their taxes. Gabbay pleaded guilty yesterday to conspiring to defraud the United States by promoting illegal tax shelters, which allowed his clients to claim massive, unwarranted tax breaks. What Happened? Between 2018 and 2019, Gabbay, along with others including Jack Fisher, James Sinnott, and their assistant Kate Joy, pushed what are known as "syndicated conservation easement" tax shelters. So, what's a "syndicated conservation easement"? Normally, a "conservation easement" is a legitimate way for landowners to get a tax break. It involves donating the development rights of their land to a charity, ensuring the land remains undeveloped and preserved. In return, they can claim a charitable contribution tax deduction, which reduces their taxable income. However, the "syndicated" vers...

DOLORES TEJADA and NORMA JIMENEZ, Manhattan-based tax preparers, pled guilty today in Manhattan federal court to charges related to their participation in a scheme to file false tax returns using stolen identities. TEJADA and JIMENEZ pled guilty before U.S. Magistrate Judge Debra Freeman.

Preet Bharara, the United States Attorney for the Southern District of New York, Janice K. Fedarcyk, the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), Toni Weirauch, the Acting Special Agent-in-Charge of the New York Field Office of the Internal Revenue Service, Criminal Investigation (“IRS-CI”), Robert L. Panella, Special Agent-in-Charge for the New York Regional Office of the U.S. Department of Labor’s Office of the Inspector General, Office of Labor Racketeering and Fraud Investigations (“DOL-OIG”), and Jonathan Kay, the Director for the New York Regional Office of the U.S. Department of Labor, Employee Benefits Security Administration (“DOL-EBSA”), announced that PETER MADOFF, the former Chief Compliance Officer and Senior Managing Director of Bernard L. Madoff Investment Securities LLC (“BLMIS”), pled guilty

Preet Bharara, the United States Attorney for the Southern District of New York, Douglas H. Shulman, the Commissioner of the Internal Revenue Service (“IRS”), and John A. DiCicco, the Principal Deputy Assistant Attorney General for the Tax Division of the Department of Justice, announced today that BDO USA, LLP (formerly BDO Seidman LLP, hereafter “BDO”) admitted to criminal wrongdoing and agreed to pay $50 million to the United States in connection with its participation in a tax shelter fraud scheme that generated at least $6.5 billion in phony tax losses for wealthy clients.

Howard Levine, owner of a Dix Hill, N.Y., tax preparation business was sentenced to 37 months in prison for tax crimes, the Justice Department and Internal Revenue Service (IRS) announced today. On Jan. 5, 2012, Levine pleaded guilty to obstructing the internal revenue laws and aiding in the preparation of false income tax returns for clients.

RICHMOND, VA—Justin Glynn French, 40, of Richmond, Va., was sentenced today to 196 months, followed by three years of supervised release, for stealing millions from federal and state tax credit programs intended to rehabilitate historic buildings. Neil H. MacBride, United States Attorney for the Eastern District of Virginia; Ken Cuccinelli, Attorney General of Virginia; Michael F.A. Morehart, Special Agent in Charge of the FBI's Richmond Field Office; Rebecca Sparkman, Special Agent in Charge of the Internal Revenue Service Criminal Investigation's Washington, D.C., Field Office; and Colonel W. Steven Flaherty, Superintendent of Virginia State Police, made the announcement after sentencing by United States District Judge John A. Gibney, Jr. "Justin French lined his pockets with millions in stolen tax dollars and defrauded more than 100 investors," said U.S. Attorney MacBride. "Mr. French exploited the rich history of the commonwealth to cheat taxpayers and in...

Company’s Owners Lived Lavish Lifestyle, Targeted Financially Distressed Consumers At the request of the Federal Trade Commission, a federal judge has halted a national operation that allegedly bilked consumers out of more than $60 million by falsely claiming it can reduce people’s tax debts – the company’s California state business license was suspended last year for not paying its own taxes, the FTC alleges. The FTC is seeking to make the defendants pay restitution to victims. “We’ve made it a top priority to go after scammers who try to exploit the financial hardship of others,” said David C. Vladeck, Director of the FTC’s Bureau of Consumer Protection. “For people having a tough time paying their taxes, the last thing they need is to lose more money to a fraud.”

WASHINGTON - Ricardo A. Nunez of Lindenhurst, N.Y., pleaded guilty to conspiring to defraud the United States and filing a false tax return, the Department of Justice and the Internal Revenue Service (IRS) announced today. According to court documents, Nunez owned and operated a tax preparation business called Monstruo Tax Service in Copiague, N.Y. Nunez prepared customers’ tax returns with fraudulent deductions, including fraudulent medical and dental expenses, personal property taxes, gifts to charity, and unreimbursed job expenses. The fraudulent tax returns generated inflated tax refunds for Nunez’s customers, which in turn attracted more customers and tax preparation fees. Additionally, according to court documents, Nunez failed to report $69,000 in income on his own tax return for 2005.

WASHINGTON – Roberto Cittadini of Bellevue, Wash., pleaded guilty today to filing a false tax return, the Justice Department and Internal Revenue Service (IRS) announced. Cittadini appeared today before Magistrate Judge Mary Alice Theiler in Seattle and accepted responsibility for concealing nearly $2 million in Swiss bank accounts. According to court documents and statements made in court, Cittadini, a retired sales manager for Boeing, failed to report income from bank accounts under his control at UBS AG in Switzerland on his individual income tax returns from 2001 through 2003. Additionally, Cittadini failed to file a Report of Foreign Bank and Financial Accounts (F-BAR) for each of these years. According to court documents and statements made in court, Cittadini initially opened an account with UBS in the early 1990s in his own name. In approximately 2001, Swiss banker Hansruedi Schumaker, who was indicted in August 2009 for conspiring to defraud the United States, assisted Cittadi...

Edward H. Okun, the former owner of The 1031 Tax Group LLP (1031TG), was sentenced today to 100 years in prison for his leading role in a scheme to defraud and obtain approximately $126 million in client funds held by 1031TG. Okun was also ordered to forfeit $40 million by U.S. District Judge Robert E. Payne. After a three-week trial in federal court in Richmond, Va., a jury found Okun, 58, of Miami, guilty on March 19, 2009, of conspiracy to commit mail and wire fraud, wire fraud, conspiracy to commit money laundering, money laundering, bulk cash smuggling and perjury. "Edward Okun’s investors trusted that he would keep their funds safe," said Assistant Attorney General Lanny A. Breuer. "But evidence introduced at trial showed that Mr. Okun instead used those investor dollars to finance a lavish lifestyle and to grow his own business holdings. Today's sentencing provides a measure of justice for those who lost so much to Okun’s deceit." "Because o...

WASHINGTON - Jeffrey P. Chernick, of Stanfordville, N.Y., pleaded guilty today to charges of filing a false tax return, the Justice Department and Internal Revenue Service (IRS) announced. Chernick, who owns a corporation which represents toy manufacturers in China and Hong Kong, appeared today before Judge James I. Cohn in Ft. Lauderdale, Fla., and accepted responsibility for concealing more than $8 million in Swiss bank accounts. According to court documents and statements made in court, on or about Oct. 14, 2008, Chernick electronically filed a U.S. Individual Income Tax Return Form 1040 for tax year 2007, which failed to report that he had an interest in or a signature authority over a financial account at UBS AG, one of Switzerland’s largest bank. He also failed to report income earned on the UBS account. The UBS account was opened in the name of Simba International Ltd., a nominee Hong Kong corporation. According to court documents, beginning in the mid-1970’s, the defendant set ...

WASHINGTON – Raoul Weil, a senior executive of a large Swiss bank with offices worldwide, including the United States, has been charged with conspiring with other executives, managers, private bankers and clients of the banking firm to defraud the United States, the Justice Department and Internal Revenue Service (IRS) announced today. According to the criminal indictment, between 2002 and 2007, Weil oversaw the Swiss bank’s cross-border private banking business that provided services to some 20,000 U.S. clients who reportedly concealed approximately $20 billion in assets from the IRS. Weil, who allegedly referred to this business as "toxic waste," mandated that Swiss bankers grow the cross-border business, despite knowing that this would cause bankers to violate U.S. law. More...

WASHINGTON – Helio Castroneves, a U.S. resident and two-time winner of the Indianapolis 500, was indicted by a grand jury today on charges of conspiracy to defraud the United States of income taxes and with six separate counts of income tax evasion for tax years 1999 through 2004, announced the Justice Department, U.S. Attorney for the Southern District of Florida R. Alexander Acosta and Internal Revenue Service-Criminal Investigation (IRS-CI) Special Agent-in-Charge Michael E. Yasofsky Jr. Also charged in the indictment were Helio Castroneves’ sister and business manager, Katiucia Castroneves of Miami, and his attorney, Alan R. Miller of Michigan. Count one of the indictment charges Helio Castroneves, Katiucia Castroneves and Miller with conspiring to defraud the United States by using an offshore Panamanian shell corporation – Seven Promotions Corporation (Seven Promotions) – to fraudulently conceal from the IRS income received from two sources: Coimex Internacional SA (Coimex) and P...

WASHINGTON – The United States has sued a Houston tax preparer, seeking to put him out of business, the Justice Department announced today. The civil injunction suit, filed in U.S. District Court for the Southern District of Texas, seeks to permanently bar Kyle C. Kasten and his business, KJ & J Tax Services, from preparing federal returns for others. According to the government complaint, Kasten prepares federal income tax returns with fabricated claims for the federal fuel tax credit. The credit is available only in limited circumstances for off-highway business use. Kasten allegedly claimed that one customer used 44,005 gallons of gasoline in 2007 when the customer’s return showed he earned only $802 that year. The complaint states that, assuming a cost of $2 per gallon, the customer would have had to spend $88,010 to purchase that amount of gasoline. In another example identified in the complaint, Kasten allegedly claimed that a customer used 55,083 gallons of gasoline in 2007....