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Pennsylvania Nurse Anesthetist Indicted for Tax Evasion

A federal grand jury sitting in Pittsburgh, Pennsylvania, returned an indictment yesterday charging a Pittsburgh-area certified registered nurse anesthetist with 5 counts of tax evasion and 4 counts of failure to file federal income tax returns and pay federal income tax.

According to the indictment, Loren Pulliam earned over $500,000 in income between 2002 and 2005, and over $1.2 million in additional income between 2008 and 2016, working as a nurse anesthetist at medical facilities in the Pittsburgh area. 

Pulliam allegedly evaded her tax obligations for the years 2002 through 2005 and 2011 through 2014 by establishing a nominee entity and directing her employers to pay compensation to that entity and then using a bank account opened in the nominee’s name to pay personal expenses.

The indictment further alleges that Pulliam failed to timely file federal income tax returns and pay the taxes due for the years 2011 through 2014, despite having an obligation to do so.

If convicted, Pulliam faces a statutory maximum sentence of five years in prison for each count of tax evasion and one year in prison for each failure to file count.  Pulliam also faces a period of supervised release, restitution and monetary penalties.  An indictment merely alleges that crimes have been committed.  A defendant is presumed innocent until proven guilty beyond a reasonable doubt.

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Return Preparer Sentenced to Over 10 Years in Jail for Filing Fraudulent Returns

According to the DoJ, a Durham, North Carolina, tax return preparer was sentenced today to 121 months in prison for conspiring to defraud the United States and preparing fraudulent tax returns for herself and her clients.
According to documents and information presented to the court, Keesha Frye, owned and operated KEF Professional Tax Services, a Durham tax preparation business. 

From 2012 through 2014, Frye and other KEF employees falsified their clients’ tax returns by including fake and inflated sources of income to qualify for and maximize the earned income tax credit and increase the refunds claimed on the returns. 

Frye also filed false personal income tax returns that claimed bogus childcare expenses and business losses.  In total, Frye’s scheme caused a tax loss of more than $1.7 million.

In addition to the prison term imposed, Frye was ordered to serve three years of supervised release and to pay $1,742,823 in restitution to the IRS.

Have a Criminal Tax Problem?
Contact the Tax Lawyers at
Marini & Associates, P.A
 for a FREE Tax Consultation Contact US at 
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IRS Issues Pub 5292 Explaining How to Calculate & Report the “965 Transition Tax” on your 2017 Return

IRS has released Publication 5292 - How to Calculate Section 965 Amounts and Elections Available to Taxpayers. Code Sec. 965, which was amended by the Tax Cuts and Job Act, requires certain foreign corporations to increase their subpart F income for their last tax year that begins before Jan. 1, 2018, by the amount of their deferred foreign income.

The Publication provides a workbook and instructions to assist in calculating "section 965 amounts," and also includes worksheets for taxpayers who may be able to make certain elections with respect to Code Sec. 965.

Publication 5292 includes:

  • Worksheet 1.1, the 965 Workbook (Worksheets to Calculate Inclusion of Deferred Foreign Income Upon Transition to Participation Exemption System),
  • Worksheet A (U.S. Shareholder's Section 965(a) Inclusion Amount);
  • Worksheet B (Deferred Foreign Income Corporation's Earnings & Profits);
  • Worksheet C (U.S. Shareholder's Aggregate Foreign Earnings & Profits Deficit);
  • Worksheet D (U.S. Shareholder's Aggregate Foreign Cash Position);
  • Worksheet E (U.S. Shareholder's Aggregate Cash Position - Detail);
  • Worksheet G (Foreign Taxes Deemed Paid by Domestic Corporation for 2017 Tax Year); and
  • Worksheet H (Section 1 Disallowance of Foreign Tax Credit and Amounts Reported on Forms 1116 and 1118).

Elections. A U.S. shareholder of a DFIC may elect to pay the Code Sec. 965 net tax liability in eight installments. In addition, owners and beneficiaries of U.S. shareholder pass-through entities may also make elections. Publication 5292 also includes worksheet for taxpayers who may be able to make these elections with respect to Code Sec. 965:

  1. an election to pay the Code Sec. 965 net tax liability over eight years;
  2. (ii) an election by S corporation shareholders to defer payment of the Code Sec. 965 net tax liability with respect to such S corporation until a triggering event;
  3. (iii) an election by real estate investments trusts to take both Code Sec. 965(a) inclusions and the corresponding Code Sec. 965(c) deductions into account over eight years;
  4. (iv) an election not to apply a net operating loss; and
  5. (v) an election to use an alternative method to calculate post-'86 earnings and profits (post-'86 E&P).

Publication 5292 provides:

  • Worksheet 2.1 and 2.2,
  • 965 Deferral Worksheet for Individuals (Calculation of Net 965 Tax Liability to be Paid in Installments); and
  • Worksheet 3.1, 965 Deferral Worksheet for Corporations (Corporate Report of Net 965 Tax Liability, Election to Pay Net 965 Tax Liability in Installments Under Subsection 965(h) and Real Estate Investment Trust Deferral of Section 965(a) Inclusion Under Subsection 965(m)).
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IRS Reminds Those with Foreign Assets about U.S. Tax Obligations

The Internal Revenue Service in IR-2018-87 reminded U.S. citizens and resident aliens, including those with dual citizenship, to check if they have a U.S. tax liability and a filing requirement. At the same time, the agency advised anyone with a foreign bank or financial account to remember the upcoming deadline that applies to reports for these accounts, often referred to as FBARs.

Here is a rundown of key points to keep in mind:

1. Deadline for Reporting Foreign Accounts

The deadline for filing the annual Report of Foreign Bank and Financial Accounts (FBAR) is the same as for a federal income tax return. This means that the 2017 FBAR, Form 114, must be filed electronically with the Financial Crimes Enforcement Network (FinCEN) by April 17, 2018. FinCEN grants filers missing the April 17 deadline an automatic extension until Oct. 15, 2018, to file the FBAR. Specific extension requests are not required. In the past, the FBAR deadline was June 30 and no extensions were available.

In general, the filing requirement applies to anyone who had an interest in, or signature or other authority, over foreign financial accounts whose aggregate value exceeded $10,000 at any time during 2017. Because of this threshold, the IRS encourages taxpayers with foreign assets, even relatively small ones, to check if this filing requirement applies to them. The form is only available through the BSA E-Filing System website.

2. Reminder: IRS to End Offshore Voluntary Disclosure Program

The Offshore Voluntary Disclosure Program will closeon Sept. 28, 2018. Taxpayers with undisclosed foreign financial assets still have time to use OVDP before the deadline.

The IRS noted it will continue to use tools besides voluntary disclosure to combat offshore tax avoidance, including taxpayer education, whistleblower leads, civil examination and criminal prosecution.

The IRS continues to use streamlined filing compliance procedures that will remain in place and be available to eligible taxpayers. But, as with OVDP, the IRS said it may end the streamlined filing compliance procedures at some point.

3. Most People Abroad Need to File

An income tax filing requirement generally applies even if a taxpayer qualifies for tax benefits, such as the Foreign Earned Income exclusion or the Foreign Tax credit, which substantially reduce or eliminate U.S. tax liability. These tax benefits are only available if an eligible taxpayer files a U.S. income tax return.

A special extended filing and payment deadline applies to U.S. citizens and resident aliens who live and work abroad. For U.S. citizens and resident aliens whose tax home and abode are outside the United States and Puerto Rico, the income tax filing and payment deadline is June 15, 2018. The same applies for those serving in the military outside the U.S. and Puerto Rico.

Interest, currently at the rate of five percent per year, compounded daily, will apply to any payment received after the regular April 17 deadline.

Nonresident aliens who received income from U.S. sources in 2017 also must determine whether they have a U.S. tax obligation. The filing deadline for nonresident aliens is April 17.

4. Special Income Tax Return Reporting for Foreign Accounts and Assets

Federal law requires U.S. citizens and resident aliens to report any worldwide income, including income from foreign trusts and foreign bank and securities accounts. In most cases, affected taxpayers need to complete and attach Schedule B to their tax return. Part III of Schedule B asks about the existence of foreign accounts, such as bank and securities accounts, and usually requires U.S. citizens to report the country in which each account is located.

In addition, certain taxpayers may also have to complete and attach to their return Form 8938, Statement of Foreign Financial Assets. Generally, U.S. citizens, resident aliens and certain nonresident aliens must report specified foreign financial assets on this form if the aggregate value of those assets exceeds certain thresholds. See the instructions for this form for details.

5. Specified Domestic Entity Reporting

For tax year 2017, certain domestic corporations, partnerships and trusts that are considered formed for the purpose of holding (directly or indirectly) specified foreign financial assets must file Form 8938 if the total value of those assets exceeds $50,000 on the last day of the tax year or $75,000 at any time during the tax year.

For more information on domestic corporations, partnerships and trusts that are specified domestic entities and must file Form 8938, as well as the types of specified foreign financial assets that must be reported, see Do I need to file Form 8938, “Statement of Specified Foreign Financial Assets”?and Form 8938 instructions.

6. Report in U.S. dollars

Any income received or deductible expenses paid in foreign currency must be reported on a U.S. tax return in U.S. dollars. Likewise, any tax payments must be made in U.S. dollars.

Both FinCen Form 114 and IRS Form 8938 require the use of a Dec. 31 exchange rate for all transactions, regardless of the actual exchange rate on the date of the transaction. Generally, the IRS accepts any posted exchange rate that is used consistently. For more information on exchange rates, see Foreign Currency and Currency Exchange Rates.

7. Expatriate Reporting

Taxpayers who relinquished their U.S. citizenship or ceased to be lawful permanent residents of the United States during 2017 must file a dual-status alien return, attaching Form 8854, Initial and Annual Expatriation Statement. A copy of the Form 8854 must also be filed with Internal Revenue Service, Philadelphia, PA 19255-0049, by the due date of the tax return (including extensions). See the instructions for this form and Notice 2009-85, Guidance for Expatriates Under Section 877A, for further details.


Need Tax Help?

Contact the Tax Lawyers at
Marini & Associates, P.A.
 for a FREE Tax Consultation Contact US at 
or Toll Free at 888-8TaxAid (888 882-9243). 


Read more at: Tax Times blog