Makin' a list; caught again; back to school; and other highlights of recent tax cases.
Washington, D.C.: Recent IRS Office of Professional Responsibility disciplinary sanctions include censure, suspension or disbarment from practice before the IRS. Individuals disciplined include (all dates this year):
- California (all CPAs): Vincente Alvarez, Chatsworth, and Michael D. Robinson, San Francisco, indefinite from April 29; Grigor Demirchyan, Granada Hills, and Todd W. Beutel, Thousand Oaks, indefinite from May 8; and Tiffany C. Detinne, Carmichael, and Bernard Turk, West Hills, indefinite from May 28.
- Florida: CPA Paul S. Mills, Key West, indefinite from May 8.
- Massachusetts: Attorney Paul S. Hughes, Wellesley, indefinite from April 29.
- Michigan: Attorney Brian P. McMahon, Ionia, indefinite from April 3.
- Missouri: CPA Justin L. Strauser, Sullivan, indefinite from May 28.
- New Jersey: Attorney James R. Lisa, Jersey City, indefinite from May 8.
- Pennsylvania: CPA Daniel J. Carney, Shawnee on Delaware, indefinite from April 2.
- Tennessee: CPA Richard T. Brown Jr., Brownsville, indefinite from May 8.
- Texas: CPA David D. Renken, New Braunfels, indefinite from April 2; Attorney Pejman Maadani, Houston, indefinite from May 8.
- Virginia: CPA Carol A. Jones, Ruckersville, indefinite from May 15.
Reinstated to practice before the IRS effective in April were CPA Robert S. Damiano, of Bridgewater, New Jersey, and attorney Charles E. Hammond III, of Katy, Texas.
San Francisco: Resident Dwayne Lorenzo Richardson has been found guilty of tax evasion.
Richardson evaded his personal income taxes for 2017 to 2019 by claiming to owe only some $28,496 in tax when he'd made more than $1.2 million as a software engineering manager. He declared more than $1.1 million in medical expenses, overstating those expenses by more than $945,000.
Richardson received tax refunds totaling over $165,000 for the three charged tax years, then lied to an IRS agent in two audit interviews, stating that the $1.1 million of medical expenses were related to an appendectomy. Richardson paid no more than a few hundred dollars for treatment related to the appendectomy, which took place in 2010.
As he explained to one of his representatives in the tax audit, Richardson deducted nonexistent medical expenses from his taxes for multiple years because he had not been "caught" the first time he did it.
Brick, New Jersey: Business owner Gerard Artz has pleaded guilty to failing to collect and pay over employee taxes.
Artz owned and operated a construction company in Brick and New York City. Beginning around 2016, his company withheld employment taxes from employees' paychecks and did not remit those employment taxes to the IRS. From 2016 to 2020, Artz and his company failed to collect and pay over $937,943 in employment taxes.
He faces up to five years in prison and a $250,000 fine; Artz has agreed to pay $937,943 in restitution. Sentencing is Feb. 5.
Encino, California: Tax preparer Bijan Kohanzad, 63, of Calabasas, California, has been sentenced to three months in jail and ordered to pay a $40,000 fine for helping a client file a return that underreported income, according to published reports.
From mid-2015 and to May 2017, Kohanzad, who
The two years' federal tax loss that Kohanzad caused reportedly totaled some $401,436.
New York: Martin Handler, of Brooklyn, has been sentenced to 58 months in prison for defrauding the federal Head Start program, for stealing more than $1 million from his federally funded childcare company, and for tax evasion.
Between 2017 and August 2021, Handler secretly "owned" and exercised control over the nonprofit Project Social Care Head Start Inc. The U.S. Department of Health and Human Services, which administers the Head Start program, annually granted Project Social Care millions of dollars to be used exclusively on the program and from which earning a profit is prohibited. Handler conspired to submit multiple fictitious documents to HHS that fraudulently asserted Project Social Care had an independent board and had in place controls to guard against fraud, waste and abuse. In fact, it had neither an independent board nor sufficient controls in place, and Handler steered Head Start funding to his own for-profit companies through what authorities called rampant undisclosed self-dealing.
Between April 2019 and January 2023, as majority owner of New York City Early Learning Co., a for-profit that also received Head Start grants, Handler misapplied and misappropriated corporate treasury funds to, among other things, repay personal loans and finance the leasing of luxury vehicles for the benefit of two members of Early Learning's Head Start board.
In 2021 and 2022, Handler falsely reported to the IRS $2 million in charitable contributions, evading taxes of at least $740,000.
Handler was also sentenced to three years of supervised release, ordered to pay a $200,000 fine and to forfeit $1,156,068.10, and to pay $1,156,068.10 in restitution to HHS and $740,000 in restitution to the IRS.
Miami: A U.S. district court has issued a permanent injunction against tax preparers and brothers George and Luis Brito and their businesses.
The injunction bars George Brito from preparing federal income tax returns, working for or having any ownership stake in any prep business, assisting others in preparing returns or setting up business as a preparer and transferring or assigning customer lists to any other person or entity. The court similarly enjoined Luis Brito from preparing income tax returns for individuals. The Britos consented to the injunction.
The complaint alleged that George and Luis Brito owned or controlled Brito and Brito Accounting USA Inc. and prepared returns for clients that claimed various false or fabricated deductions and credits, including fabricated residential energy credits, false and exaggerated itemized deductions, and fictitious and inflated business expenses.
The order requires Luis Brito to inform his clients that he has been permanently enjoined from preparing returns except for certain types of business forms, including those reporting payroll, unemployment and corporate income taxes. The IRS can make unscheduled and random visits to Luis Brito's business; he must also complete at least 24 hours of tax prep education by Dec. 31.
Union, New Jersey: Tax preparer Emmanuel Amenyo, 59, admitted assisting in the preparation of fraudulent returns, resulting in improperly large refunds.
From 2018 through 2021, Amenyo ran a tax prep business in which he prepared and submitted individual federal returns for clients. He filed numerous false returns and subscribed to false returns with respect to his own taxes.
These returns falsely claimed charitable contributions, itemized deductions, child and dependent care expenses, and other qualified expenses to which Amenyo and his clients were not entitled, causing a tax loss of $250,466.
Amenyo faces up to three years in prison and a $250,000 fine. Sentencing is April 1.
