Archive for the ‘Walt’ Category

Tax Roundup, 9/10/2012: Walter Anderson fights on, fails on. Also: tax credit scams and tax returns as pornography.

Monday, September 10th, 2012 by Joe Kristan

“Biggest Evader” Walter Anderson loses appeal of adverse Tax Court ruling.  The persistence that Walter Anderson showed in building his tech fortune so far hasn’t helped him in his ongoing battle with the IRS.

Mr. Anderson pleaded guilty to evading taxes on investment income earned in overseas corporations for 1998 and 1999; as part of the plea deal, charges for 1995, 1996 and 1997 were dismissed.  The IRS also pursued collection of $184 million of taxes for those hyears, plus $138 million of civil fraud penalties.  Mr. Anderson resisted.  In a tactical maneuver, the IRS conceded the issues for 1995-97.  From the Third Circuit opinion:

In its motion, the IRS explained that nearly 80% of the total deficiency and penalties for the five-year period stemmed from just 1998 and 1999, and that because proving fraud for 1995 through 1997 via trial would needlessly complicate and lengthen the case for a comparatively limited additional monetary recovery, it preferred to abandon its efforts for those years.

The Tax Court didn’t formally dismiss the first three years taxes for some procedural reason, but said its final ruling would reflect the IRS concession.  But Mr. Anderson then said that the IRS concession for those three years also meant the IRS couldn’t pursue collection for the two years for which he pleaded guilty.   The Tax Court thought that was a bit much.

The Third Circuit appeals court upheld the Tax Court:

We hold that Anderson’s conviction for tax evasion in 1998 and 1999 precludes him, by virtue of the doctrine of collateral estoppel, from contesting in subsequent civil fraud proceedings that the income of G & A was taxable to him in those years. We additionally conclude that the IRS’s concession of all deficiency and penalty issues for the years 1995, 1996, and 1997 has no preclusive effect on those issues for 1998 and 1999. For these reasons, we will affirm the Tax Court’s judgment.

Mr. Anderson says his guilty plea was coerced by poor jail conditions while he was awaiting trial.  Unfortunately for him, the law makes it very hard to undo a guilty plea.  Once you plead guilty to evading taxes for a year, the rest is just ugly details.

Cite: Walter C. Anderson v. Commissioner, CA-33, No. 11-1704.  Jack Townsen has more.  Some background here.

 

Paul Neiffer,  Section 179 for 2013:

We have gotten a few emails in the last few weeks asking what the Section 179 deduction will be in 2013.  The current law is a limit of $25,000 for 2013.

However, both the President and Congress have discussed increasing the deduction up to $500,000 with a phase-out starting at $2 million…

My estimate is that Section 179 deduction for 2013 will increase, but who knows by how much and this is always subject to the whims of Congress and the President.

I agree that it will probably not be $25,000, but until the political situation sorts itself out in November, we don’t have much to even guide our guesswork.

 

Joseph Henchman,  Missouri to Look More Closely at Ineffective Tax Credits  (Tax Policy Blog) Iowa has certainly gone in for them whole-hog.  Missouri has reconvened a commission to try to contain tax credits.  David Brunori weighs in:

Governor Jay Nixon has reconvened a commission to study tax credits in the state. That is a good thing, of course. The state spends over $600 million on tax credits alone. Real estate developers receive the bulk of that largesse. There are credits for economic development held sacred by both parties because of the phony claim they create jobs.  There are credits for historic development which turn run down eyesores into commercially viable properties. The people of Missouri actually give developers money to fix up old properties and sell them at a profit. We used to call that welfare. And there are credits for developing low income housing. Liberals love low income housing credits because it makes them feel like they are doing something to help the poor and dispossessed. I think some people love low income housing because it segregates all the poor people in one place away from the “decent” folks. And I know developers love low income housing credits because it allows them to take advantage of a well intentioned but incredibly flawed system.

It’s no coincidence that two of Iowa’s most prominent low-income housing developers are deeply embedded in the state political system.

 

Elevating the level of debate:  Hustler publisher offers $1 million for Mitt Romney’s filing info, tax returns (Kay Bell). It’s a federal offense to leak confidential tax information, so I doubt that the feds would let a snitch keep the million dollars.  Especially if Romney wins.  TaxGrrrl also notes that it’s a crime to accept stolen property.

Christopher Bergin, Where’s the Tax Plan, Man – Uh, Men?

Jim Maule,  Do-It Yourself Lawyering Brings Tax Unhappiness.  Yes, the thrifty ex-husband is still divorced, but he botched the alimony language, meaning he couldn’t deduct the payments.  But look on the bright side: she doesn’t have to pick it up as income!  He may not find that consoling.

Bruce the Missouri Tax Guy looks at Tax Apps for your phone.

Peter Reilly, tax maven, shows his Civil War cred: Next Monday September 17 Remember America’s Bloodiest Day.  And not just because corporate extensions are due.

Dang.  Summer is gone (Daniel Shaviro)

News you can use: Politicians Lie. In Other News, Water is Wet (Anthony Nitti)

Trick question. They’re all Azkaban.  Let’s Compare the Big Four Accounting Firms to the Four Houses in Harry Potter (Going Concern)

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Tax Roundup, 8/31/2012: “Biggest tax evader” out of prison. IRS web services taking the weekend off. And Bingo!

Friday, August 31st, 2012 by Joe Kristan

“Biggest tax evader” out of prison.  From the Washingon Times, “Nearing end of sentence, top tax evader still eyes vindication”

Walter Anderson was a wealthy telecommunications executive whose money helped underwrite private space-exploration efforts, but he became famous as the defendant in what federal prosecutors called the largest personal income-tax evasion case in U.S. history.

But less than six years after his sentencing in federal court in Washington, Anderson now is preparing to become a free man again.

He was sentenced to nine years in prison in 2007, but because of the time he spent in the D.C. Jail while awaiting trail, he’ll be finished with his sentence by the end of the year. And he’s serving out his last few months in home confinement in Virginia.

Though he pleaded guilty to the tax charges, he maintains his innocence, saying that his plea wasn’t voluntary.

Related: ‘BIGGEST TAX EVASION CASE’ ENDS WITH GUILTY PLEA and Walter Anderson agrees on a big number

 

A bargain at half the price?  $36+ million: That’s how much taxpayers are paying for the political conventions (Kay Bell)

So shutting them down is the upgrade? IRS Upgrade This Weekend; Many Services Unavaiable Until Tuesday (Russ Fox)

TaxVox,  Feldstein’s Analysis Doesn’t Refute TPC Findings, It Confirms Them

Jana Luttenegger, BINGO! Wait, you’re taxing that? (Davis Brown Tax Law Blog)

Jim Maule,  When Taxing Social Security, What is Social Security?

Robert D. Flach, SUMMER RERUN – TAX HISTORY

News you can use:  Reason #434 It’s A Good Idea to Put Your Separation/Divorce Agreement in Writing (Anthony Nitti)

Going Concern,  New IRS Employees Don’t Always Have Someone to Show Them the Ropes:

Yep! If there’s any chance of IRS the sucking at something, TIGTA has likely investigated and issued a report about it. E-filing isn’t perfect. There’s billions in tax fraud due to identity theft. They can barely get one tax return processed a day. They need to monitor tax credits better. And it continues!

While the IRS has taken steps to make the new employee experience positive, managers whom TIGTA interviewed were not following best practices identified in the comprehensive guidance the IRS developed for them. As a result, some best practices that would help new employees feel welcome and help them become more productive were not fully implemented. For example, one-quarter of the new employees TIGTA contacted were not assigned a coach or mentor when they arrived, and approximately 29 percent stated that the onboarding experience did not accelerate their ability to reach full productivity.

TIGTA’s not asking for a full-blown cake party or anything. At least give the new guy or girl a map to find the john. Something.

Have a great labor day weekend!

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Walter Anderson agrees on a big number

Thursday, March 31st, 2011 by Joe Kristan

An alert reader points us to a Tax Court document where Walter Anderson agreed that his IRS deficiency for 1998 and 1999 is $141,497,773, not counting penalties of $105,984,341. The agreement says there is no deficiency for the prior three years.
Mr. Anderson was pleaded guilty in what was billed as perhaps the largest individual tax evasion case ever. After the plea, there was a dispute over whether Mr. Anderson would have to pay the taxes. That seems to be settled. Since he has claimed he is indigent, the actual amount may be academic.
Mr. Anderson was a telecom entrepreneur with an interest in space travel. Owing the IRS $247 million, not counting interest, may keep his feet on the ground for awhile, even after he finishes his prison term.
Link: Complete Tax Update Walter Anderson coverage.

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Tax Court: Walter Anderson has to pay up.

Thursday, February 26th, 2009 by Joe Kristan

The man convicted of what was called the “largest individual tax evasion case in U.S. history,” is still fighting. Walter Anderson, a telecom entrepreneur who is serving a nine-year prison sentence, argued in Tax Court that he was innocent of tax fraud, despite of his guilty plea on federal tax charges.
When tax fraud is involved, there is no statute of limitations on asserting a tax liability. Absent fraud, the IRS would be unable to collect the taxes. Considering that the IRS says Mr. Anderson owes $183,779,618 for 1995-1999, the stakes are reasonably high. The IRS is also asserting the 75% fraud penalty for an additional $137 million or so.
The IRS says that his guilty plea for 1998 and 1999 prevents him from fighting fraud penalties for those years. As the guilty plea didn’t cover 1995-1997, he can still argue that he didn’t commit fraud then in fighting collection.
When Mr. Anderson was convicted, there was a little kerfuffle over his plea agreement, which didn’t specifically require restitution of unpaid taxes. An appellate court later reopened the door to collection. It may not make much difference. His deficiency and penalties for 1998-1999 alone total over $253 million, and he has argued that he is indigent. As he argued his Tax Court case without a lawyer, it’s not clear that he has much ready cash to give the IRS.
Cite: Anderson, T.C. Memo 2009-44.

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Walter Anderson has to pay up

Monday, November 17th, 2008 by Joe Kristan

The D.C. District Court of Appeals ruled last week that Walter Anderson, who is serving a 9-year sentence after pleading guilty to evading taxes on $450 million in income, also has to pay the taxes. The ruling overturns a district court opinion that said a flaw in the plea bargain let him off the hook.
More Coverage from Russ Fox.
Link: DOJ press release

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WALTER ANDERSON GETS NINE YEARS

Wednesday, March 28th, 2007 by Joe Kristan

Walter Anderson, the telecom entrepreneur who pleaded guilty in the largest individual U.S. tax evasion case to date, received a nine-year prison sentence yesterday.
Mr. Anderson pleaded guilty to moving $450 million offshore to avoid taxes. Oddly, the sentencing judge declined to order restitution of the unpaid taxes, blaming a poorly-worded plea agreement. This requires the IRS to go through the civil court system in separate collection proceedings.
Given the size of the tax loss, Mr. Anderson could have gotten the maximum 10-year sentence requested by the government. He would have been eligible for a much longer sentence if he had been convicted of all charges in the initial indictment.
Links:
Washington Post
Bloomberg
TaxProf Blog
Complete Tax Update Walter Anderson Coverage
JusticeForWalt.com

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‘BIGGEST TAX EVASION CASE’ ENDS WITH GUILTY PLEA

Friday, September 8th, 2006 by Joe Kristan

Telecom millionaire and space exploration figure Walter Anderson pleaded guilty to two counts of tax evasion and one count of tax fraud today. The plea deal settles criminal charges that he evaded taxes on $450 million of income. By pleading the case down to two evasion counts and a fraud count, he reduced his maximum sentence from 80 years to 10 years, according to the Associated Press. This was billed as the biggest personal tax evasion case ever, at least in terms of the amount of tax at stake.
Given the size of the tax loss, don’t be surprised if he gets the maximum sentence. Assuming the judge will use the current sentencing tables, the $170 million tax loss that the government alleges puts him at offense level 32. The lowest guideline sentence for that offense level is 121 months. Given the “sophisticated means” that the indictments alleged, it’s hard to see that sentence getting below the maximum 120 months.
Mr. Anderson is said to be an “Anarcho-Capitalist“:

Anarcho Capitalists argue that private enterprise can provide law enforcement, and the market place can resolve disagreements about what the law is and what the law means

Maybe this means the plea agreement will call for him to go to a Wackenhut facility.
Links:
Complete Tax Update Walter Anderson coverage
TaxProf Blog coverage
More Links:
Washington Post
Bloomberg.com
Wall Street Journal ($link)

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TELECOM MILLIONAIRE ANDERSON STIFFING HIS LAWYERS?

Friday, August 12th, 2005 by Joe Kristan

walt.jpgA published report says the man charged with the largest individual tax evasion in U.S. history has stopped paying his lawyers:

Lawyers for Walter Anderson filed a motion in U.S. District Court in Washington to withdraw from the case because of their client’s “inability to pay his attorney fees.”
“While counsel understands that Mr. Anderson has made efforts to obtain the funds … his inability to do so, regrettably, has resulted in a deterioration of the attorney-client relationship.”


Yes, that will do that. No money, no honey, as they say.
Mr. Anderson, who is accused of stashing over $450 million offshore to avoid taxes, may request a court-appointed attorney. The prosecutors aren’t having it:

“The government does not believe the defendant to be indigent,” the U.S. Attorney’s Office wrote, adding that Anderson has repeatedly offered to pay a substantial bond in exchange for his release.


Well sure, but that’s different. Lawyers might get you off, but if you pay bond and flee somewhere with no extradition, you avoid jail for sure.
Prior coverage: NO BOND FOR WALT.

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NO BOND FOR WALT

Wednesday, March 16th, 2005 by Joe Kristan

Walter Anderson has lost his bid for freedom pending his trial on evading $250 million of taxes. A federal judge today ruled that Mr. Anderson is a flight risk and must await trial in jail.

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WALTER ANDERSON: FLIGHT RISK?

Friday, March 11th, 2005 by Joe Kristan

The Government yesterday told a judge that telecom entrepreneur and space buff Walter Anderson should be denied bail while he awaits trial on tax evasion charges. The government opposed bail on the grounds that Mr. Anderson’s overseas holdings and make him a flight risk. The government also said that books owned by Mr. Anderson on hiding assets and disappearing also are evidence he might flee.
Mr. Anderson is accused of evading taxes on $450 million of income. The Washington Post reports that the judge will make a bail decision today or Monday.
The Post also reports that Anderson has hired a new lawyer, Abbe D. Lowell. Mr. Lowell represented Gary Condit when the former Congressman’s intern, Chandra Levy, disappeared.

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WALT ANDERSON – TAX CHEAT, OR MISUNDERSTOOD PHILANTHROPIST?

Monday, March 7th, 2005 by Joe Kristan

In a jailhouse interview with the Washington Post, Walter Anderson says that he wasn’t evading taxes on $450 million; he was just getting ready to give it away. He told the Post:

He was going to use the money to change the world. To fight for arms control and human rights. To promote family planning and space exploration. He was going to give the money away, starting next year.
“I don’t need to steal money from the U.S. government to be successful,” Anderson said in a wide-ranging 2 1/2-hour interview. “I don’t want their money.”

With all of those interests, no wonder he needed to stash it overseas before giving it away.
Mr. Anderson is awaiting a March 11 court appearance in jail after a U.S. Magistrate Judge denied him bail. The judge decided that his houses around the world, his fake British Guyana passport, and his possession of books about hiding assets and disappearing made him a flight risk.
Mr. Anderson has had brushes with the law before, but for lower stakes. In the 80s, according to the Post, he campaigned against car-pool lane restrictions as “government interference in people’s private affairs” and was repeatedly ticketed for violating them.
Mr. Anderson told the Post that he made a good-faith effort to file tax returns on time and accurately. As he apparently still hasn’t filed tax returns for 1987-1993, good faith must only get you so far.
Hat tip: The TaxProfs MSM Tax Roundup.

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MAYBE HE SHOULD HAVE MOVED TO THE SPACE STATION

Tuesday, March 1st, 2005 by Joe Kristan

mir.jpgWalter Anderson last made headlines five years ago when he tried to arrange a rescue of the Mir space station. The headlines he’s getting now are far worse. He was arrested Saturday at Dulles Airport on tax evasion charges that were publicly announced yesterday.
Mr. Anderson calls himself an “anarcho-capitalist,” according to one website. What does that mean? One explanation says:

Anarcho Capitalists argue that private enterprise can provide law enforcement, and the market place can resolve disagreements about what the law is and what the law means


Apparently the Justice Department isn’t ready to embrace this, as it has not outsourced Mr. Anderson’s prosecution.
Mr. Anderson is said to have spent lavishly on jewelry, fine wine and fine art while evading taxes on $450 million in income, according to the indictment. The Justice Department says he reported less than $68,000 in income in 1998, but somehow missed another $126 million. Easy enough to miss that, for sure. With high living and allegations of cash flying across borders by the millions, this should be an interesting case. Mr. Anderson probably hopes that things go better for him here than they did for the Mir.
There’s lots of mainstream coverage of this one, includint this from the New York Times: I.R.S. Accuses Man of Hiding $450 Million
Our prior coverage is here.

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EVADING TAXES ON $450 MILLION? THAT’S NOT A SMALL NUMBER. THAT’S A VERY BIG NUMBER.

Monday, February 28th, 2005 by Joe Kristan

The IRS may have landed a big one. The Department of Justice today announced the indictment of a Washington D.C. “telecommunications entrepreneur” Walter Anderson on charges of evading taxes on up to $450 million of income over five years. From the press release:

The indictment alleges that over a five-year period, Walter Anderson personally earned nearly a half billion dollars through investments in business ventures he conducted through offshore corporations he set up to make it appear that he was not personally earning these amounts.

The press release says the charges could merit an 80-year sentence.
The release reminds us that “Every defendant is presumed innocent until and unless found guilty.”
Tax Analysts also has coverage.

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