Posts Tagged ‘Christoper Bergin’

Tax Roundup, 3/28/2013: Appeals Court upholds injunction against IRS preparer regs. Also: Indicted for overstating income?

Thursday, March 28th, 2013 by Joe Kristan


ijlogoWith less than three weeks left in filing season, the US Federal Circuit Court of Appeals has denied the IRS attempt to overturn the injunction against their preparer regulation scheme.  From the Wall Street Journal Total Return blog:

The District of Columbia Circuit Court of Appeals denied a renewed request by the Internal Revenue Service to suspend a January 18 injunction against the agency’s effort to license tax preparers.

A three-judge panel upheld U.S. District Court Judge James E. Boasberg’s refusal to lift his injunction against the IRS’s licensing program.

This doesn’t mean the IRS has permanently lost its case, but it does mean that the IRS cannot move forward with its power grab unless and until it convinces the appeals court that it has the authority to regulate preparers.

Meanwhile, filing season continues, with no evidence that taxpayers have been harmed by the availability of preparers who haven’t passed an IRS open-book exam on Publication 17.

You would think that an agency short on staff and plagued by identity theft refund fraud would be grateful for the chance to redirect resources from a futile and wasteful regulation program.  Yet they seem to be lobbying the Senate for legislative authorization for their power grab.  Shameful, but not surprising.

Congratulations to the Insitute for Justice for another win for consumers.


20130328-1Iowa preparer indicted – for helping clients report too much income.  From (my emphasis):

 Keith Rath, of Shellsburg, was arrested last week by IRS agents after a grand jury indicted him on eight counts of aiding in the preparation and  presentation of a false tax return.

The indictment says that on  eight occasions over the years 2008, 2009 and 2010, Rath helped clients  falsely claim thousands of dollars in business income that he knew they  did not earn.

Mr. Rath has pleaded not guilty.

You might wonder why anyone would claim business income they didn’t earn.  The answer, of course, would be to claim refundable earned income tax credits.  A taxpayer with no “earned income” is ineligible for the credit.  The EITC is “refundable,” which means that when there is the credit exceeds the computed tax, the IRS will send you a check for the difference.  By reporting imaginary Schedule C income, taxpayers can (illegally) increase their refund check.

EIC fraud is a huge problem.  It is estimated that as much as 25% of EIC is improperly awarded, resulting in billions of dollars of fraudulent tax refunds.  The Iowa Senate wants to make the problem even bigger.


Elizabeth Malm,  Minneapolis Star Tribune Editorial Board Warns Legislators Against Higher Taxes on High-Income Earners (Tax Policy Blog).  If the Star-Tribune thinks you’ve gone too far in jacking up taxes, you’ve got a problem.

Tony Nitti,  Derek Jeter Flees New York, Tax Savings Soon To Follow .  But they keep telling us that tax migration is a myth.

Just like capital migration.  ‘Legal Enemies of the State’!  (Christopher Bergin,

In Tax Notes this week I wrote about abusive transfer pricing and other techniques being used by multinational corporations and their brilliant  tax advisors to avoid as much tax as possible. That these techniques are technically legal, and, some would say, actually enabled by governments like the United States and groups such as the Organization of Economic Cooperation and Development (OECD), doesn’t necessarily make them right.

In fact, the OECD itself recently issued a report – known as the BEPS report –  on how these techniques create base erosion and profit shifting. The problem is so serious, according to the report, “What is at stake is the integrity of the corporate income tax.”

The “integrity of the corporate income tax” is in the third aisle next to the chastity of the bordello.


Peter Reilly,  Tax Court Does Not Buy Vow of Poverty of Prophetess.   Her full title is “Prophetess, Teacher, Pastor and Certified Paralegal,” so she has something to fall back on.

Paul Neiffer,  You Can Always Do An IRA!

Cara Griffith, The Meaning of a Symbolic Vote (  Senate approval of sales tax on internet sales may keep the issue alive.

Tax Trials, Supreme Court to Hear Arguments in DOMA Tax Case

Patrick Temple-West,  TurboTax’s lobbying fight, and more

Jack Townsend,  Random thoughts on Ethics, Tax Opinions and A Tax Lawyer’s Life at a Big Law Firm

Kay Bell,  Don’t fall for these Dirty Dozen tax scams of 2013


TaxGrrrl, IRS Apologizes For Star Trek Video As Congress Jumps At Chance To Criticize Spending.  She notes that a trivial expenditure is generating a lot of political preening.  As far as I’m concerned, I’d rather they make videos than a lot of other things they do.

Well, it’s a better use of funds than preparer regulation.  Dear IRS, Please Make More Parody Videos (Going Concern)



Tax Roundup, 12/7/2012: You can’t soak the rich without soaking employers. And: Baby Insane Crips?

Friday, December 7th, 2012 by Joe Kristan

When you tax “the rich,” you tax business.  That’s not going to help a struggling economy, but that’s where we’re going.  The TaxProf reproduces a great Congressional Budget Office chart that shows how how business income has moved from corporate returns to individual returns, mostly through the use of “pass-through” entities like S corporations, partnerships and LLCs:


Remember when the IRS Commissioner said they are up against sophisticated criminals?  Not so much,  From the LA Times:

Authorities arrested 11 people and seized piles of cash, guns and vehicles Thursday following an investigation into an alleged $1-million tax fraud scheme operated by a Long Beach street gang.
Thursday’s arrests were the result of “tedious investigative work,” and targeted the Baby Insane Crips, as well as family members and acquaintances, according to Long Beach Police Chief Jim McDonnell. Gang members allegedly used stolen Social Security numbers and other personal information to file false tax returns and then funneled refunds to family members and acquaintances.

When the “Baby Insane Crips” can defeat your financial controls, your controls aren’t that good.  Related: Russ Fox,  Why Rob Banks?


Indictment of St. Louis CPA unsealed.  The indictment of St. Louis-area CPA Frank “Tiger” Zerjav has been made public.   Mr. Zerjav survived an IRS attempt to shut down his practice via civil injunction.  This is much more serious, alleging the use of falsified Quickbooks files to conceal taxable income.

Bill Straub,  5 Ways The Fiscal Cliff Drama Could Play Out. (Via Instapundit)

Anthony Nitti,  The Top Ten Tax Cases Of 2012, #4: S Corporation Reasonable Compensation – How Much Is Enough?.  The much discussed Watson case.

 Jack Townsend,  Is Restitution a Criminal Penalty Requiring the Jury to Speak?


Patrick Temple-West,  Some in GOP urge lawmakers to back tax hikes for changes in safety-net programs, and more

David Brunori, The Rich Will Pay for Our Sins.  For now.  But not forever; the rich guy isn’t buying. (

Christopher Bergin,  Fool’s Gold and Loopholes:

There are no silver bullets that can fix the fiscal distress facing our nation. The fact that our politicians are trying to convince us to the contrary is not productive and shows that they are small leaders. Unfortunately for us, the chances that leaders who think small can solve big problems are not good.

It’s not about solving our problems, to them.


It would make putting up with the politicians easier, anywayDude, Should Marijuana Be Legalized and Taxed?  (Howard Gleckman,  TaxVox)

That makes it a better Friday: Robert D. Flach’s Buzz, SPECIAL FRIDAY EDITION


News you can use: The Simpsons’ Montgomery Burns explains (sorta) the fiscal cliff (Kay Bell)

Cruel and unusual punishment:  Brazil Prison Gang Conducted 10-Hour Conference Call (Via Going Concern).   Egads.  I’d rather face thumbscrews.

If she were in Congress, I would believe it.   Ex-Chelsea selectwoman accused of tax fraud claims she is illiterate.  A novel tax evasion defense.