Devil’s in the details; the court date; smackdown; and other highlights of recent tax cases.
District Heights, Maryland: Tax preparer Renita Jenifer has been sentenced to two years in prison for aiding and assisting in the preparation of a false return.
Jenifer, who pleaded guilty earlier this year, operated a prep business in the District of Columbia between 2013 and 2016 under the name RAJen Business Tax Service. She prepared returns for clients claiming fraudulent and inflated itemized deductions, including charitable contributions and unreimbursed employee expenses, as well as with fraudulent and inflated business expenses.
In 2016, after the IRS searched RAJen’s office and revoked Jenifer’s EFIN, she operated a new business in Maryland called DS Professional Tax Service. She used the name of a different individual to obtain an EFIN for DS Pro and listed this individual’s name on returns she prepared. She again prepared false returns for clients then and after moving the business to D.C. in 2018.
She also filed false income tax returns for herself for 2013 and 2014, failing to report all of the income generated by her business; she filed no income tax returns for herself for 2017 and 2018, despite earning income from her operation of DS Pro.
The loss to the government was $373,090.
Jenifer was also ordered to serve a year of supervised release and pay $357,819 in restitution to the IRS.
Jefferson County, Alabama: Tax delinquent John P. Cooney has been sentenced to a year in prison for tax evasion.
Cooney disclosed to the IRS in December 2011, through late-filed returns, that he owed some $780,000 to the federal government for the 2008 to 2010 tax years. He never paid those taxes, but instead sought to conceal income by setting up a nominee corporation, GVA Advisors, and arranging for payments to be made to GVA rather than directly to him. From 2013 through 2016, Cooney deposited more than $435,000 into the GVA account.
Cooney, who earlier this year pleaded guilty to one count of tax evasion, owes more than $1.3 million in outstanding balances, penalties and interest to the IRS.
He was also ordered to serve three years of supervised release and pay $1,311,904.70 in restitution to the IRS.
Battle Ground, Washington: Businessman Thomas A. Rennie, formerly of Portland, Oregon, has been sentenced to a year in prison and three years of supervised release and been ordered to pay $1.5 million in restitution to the IRS for evading payment of employment taxes and personal income taxes.
Rennie operated a car-detailing business for 28 years and a dog-training business since 2015. He evaded payment of nearly $1.5 million in taxes for the years 2005 through 2017: employment taxes for his businesses, personal income taxes and corporate taxes.
His efforts to dodge his taxes included failure to maintain proper business books and records; using business bank accounts and a nonprofit entity’s bank account to pay personal expenses; concealing ownership of personal assets by placing title to these assets in the names of nominee entities; concealing the income from the sale of one of his companies by placing the proceeds in bank accounts held in the names of nominees; and making false statements to an IRS revenue officer.
Miami: Male escort Jami Kopacz has pleaded guilty to filing a false return.
Kopacz worked as a paid escort for clients nationwide, receiving payments directly from his escort clients and from a private business for whom he worked as an independent contractor. From 2015 to 2018, Kopacz used his corporation, JK Training, to receive income, then filed 1120Ss that substantially underreported the company’s gross receipts and total income. The understatement passed through to his individual returns, which also underreported his total income.
Kopacz caused a total tax loss of $278,325.
Sentencing is March 5. He faces up to three years in prison plus supervised release, penalties and restitution.
New York: Preparer Yehad Abdelaziz and his corporation have pleaded guilty to tax fraud.
State investigators determined that between March 2015 and August 2017 Abdelaziz received money from business owners and filed sales tax returns on their behalf. He underreported sales or reported zero gross sales and instead pocketed the sales tax payments clients trusted him to remit for them.
Abdelaziz and The Five Pillars Financial Services, of the Bay Ridge area of Brooklyn, paid more than $191,000 restitution, including forfeiture of more than $6,700 that was seized as part of a search by state tax authorities. Both Abdelaziz and his corporation are also prohibited from providing prep services of any kind for one year.
Washington: Stein Agee of Canton, Georgia, and Corey Agee of Atlanta have pleaded guilty for their roles in a scheme to defraud the IRS.
From at least 2013 through 2019, the Agees, then partners at an Atlanta accounting firm, marketed, promoted and sold, with conspirators, investments in fraudulent syndicated conservation easement tax shelters. The shelters were designed to produce deductions for high-income taxpayers through partnerships that purported to make “real estate investments.” In truth, the partnerships were a sham, lacking economic substance and serving no legitimate business purpose.
The Agees and their conspirators marketed the shelters by promising investors that for every $1 invested in the partnership, the investor would receive more than $4 in charitable deductions.
The Agees solicited investors after the end of the tax year and advised them to backdate payments and documents to make it appear that the “investments” were timely made before the end of the tax year. They also prepared and assisted in the preparation of false returns for clients who agreed to invest in the shelters.
Between 2013 and 2019, the Agees each received more than $1.7 million in commissions.
They both pleaded guilty to one count of conspiracy to defraud the U.S., which carries a maximum of five years in prison. They also face a period of supervised release, restitution and monetary penalties.
Highland Park, Illinois: Domenic Poeta has been sentenced to a year in prison for operating an illegal sports bookmaking business and filing false income tax returns.
He unlawfully operated a business that provided sports betting and wagering services, both domestically and abroad. From 2012 to 2017, Poeta, who pleaded guilty earlier this year, obtained more than $3.7 million from the operation of his bookmaking business. He failed to report his receipt of this income in the federal and state returns that he filed for each of those years, resulting in a tax loss of some $1,486,363.
News reports added that Poeta, a butcher, used the money to fund real estate investments, car purchases and his family’s wrestling gym.
Jacksonville, North Carolina: Preparer Gene Hersholt Williamson II was sentenced to three years in prison for aiding and assisting in the preparation of a false return.
Williamson operated a tax prep business between 2012 and 2018 and fraudulently inflated clients’ claimed refunds by reporting fictitious Schedule C businesses on their returns to qualify them for the Earned Income Tax Credit.
He received 10 percent of the refunds and didn’t list himself as the paid preparer on any returns. Williamson also filed false tax returns for himself for 2012 to 2017.
Tax loss to the IRS exceeded $550,000.
He was also ordered to pay $637,000 in restitution.
