The legal business must really be getting tough, if lawyers have to resort to the lamest lame tax fraud scheme out there. A Monroe, Louisiana attorney named Francis Broussard has pleaded guilty to attempting to claim over $9 million through the “1099-OID” fraud. From thenewsstar.com:
According to the Stipulated Factual Basis in the plea agreement, Broussard, who has been licensed to practice law in Louisiana since 1986, had his accountant prepare his 2005 through 2007 tax returns, but the defendant never filed them. Broussard did present the documents to various financial institutions in efforts to obtain personal loans and other types of financing. In 2009, the defendant went to a different tax preparer to have his personal tax returns prepared for 2005 through 2008. The defendant brought already prepared federal tax returns along with a separate piece of paper with a set of numbers on it. The defendant instructed the preparer to use the set of numbers on Forms 1099-Original Issue Discount (OID) and on the Schedule B, Interest Income section of the form. The defendant’s fraudulent claim is based on the OID interest income.
The 1099-OID scheme is, to the extent it is coherent at all, based on the idea that government has a big cash stash for each of us. They don’t want us to know about it, goes the theory, but we can tap into it if we just fill out the right tax forms. It’s not surprising that people fall for it — heck, we fall for big delusions every time we vote — but it is surprising that a lawyer would give such a preposterous scheme a try.
TaxProf, TIGTA: IRS Fails to Comply With Mandated Reduction in Improper Payments — 25% EITC Fraud Costs $14 Billion/Year. The earned income tax credit is a fraud magnet because it is “refundable” — if it exceeds your tax for the year, the IRS writes you a check. That makes it a welfare program run through the tax system. EIC advocates say it is a critical help for struggling families, but when that much is stolen from the program in a year, you have to think there is a better way.
Howard Gleckman, High Income Households Would Pay Most—But Not All—of the New Taxes in Obama’s 2014 Budget (TaxVox). Just more evidence of the unseriousness of the budget. The rich guy isn’t picking up the tab. He can’t.
Jeremy Scott, How Important Is Deferral to Multinationals? (Tax.com)
Patrick Temple-West, Businesses become REITs to avoid taxes, and more. That works great if you can live with at least 100 shareholders, and no five together own over 50%.
Robert D. Flach, MORE ON THE NEW “SAFE HARBOR” HOME OFFICE DEDUCTION
Trish McIntire, Do Overs. You can amend a tax return if you need to.
William Perez, Obama’s and Biden’s Tax Returns for 2012