A federal judge Friday sentenced a key player in the once-lucrative Jenkens & Gilchrist tax shelter practice to eight years in prison. From the AP:
U.S. District Judge William H. Pauley III sentenced 52-year-old Donna Guerin, of Scottsdale, Ariz., after she pleaded guilty to conspiracy to defraud the United States and tax evasion. He ordered her to pay $190 million in restitution besides the $1.6 million she agreed to forfeit when she pleaded guilty in September.
Guerin, a former partner at Jenkens & Gilchrist, a Texas-based law firm with offices throughout the United States, had admitted that she helped market tax shelters from 1994 through 2004 to some of the world’s richest investors, including the late sports entrepreneur Lamar Hunt, trust fund recipients, investors, a grandson of the late industrialist Armand Hammer and one of the earliest investors in Microsoft Corp.
The biggest prosecution target at Jenkens, Paul Daugerdas, faces his second trial on the charges in September. His 2011 trial was voided because of juror misconduct.
Jenkens was one of the big players in the tax shelter industry that sprung up among big law and accounting firms in the 1990s. It shut down in 2007 after entering a non-prosecution agreement with the Justice Department.
Sort of related: Ernst & Young Admits That Some of Its Partners Were Running a Tax Shelter Factory (Going Concern); Ernst & Young Pays $123 Million, Avoids Tax Shelter Prosecution (Janet Novack)
Robert Goulder, Questioning the Longevity of the Income Tax (Tax.com):
Dare we attempt to guess what the income tax might look like in another 100 years?
Personally I think it will still exist, but it will have company. The big question for policymakers is whether it should operate as a “mass” tax — as it strives to do today — or whether it will function as a “class” tax that applies only to the upper income strata. Given that roughly 47% of American households currently don’t pay the income tax (distinguished from payroll taxes, which almost everyone pays), one could argue it is already starting to resemble a class tax. Perhaps the future is already here.
I can state with some confidence that if there is an income tax in 2113, I won’t be preparing returns.
Jack Townsend, Fraud on the Return — Even If Not the Taxpayer’s — Causes an Unlimited Civil Assessment Statute of Limitations to Apply. This is an ugly result caused by an in-house accountant who stole funds meant for payroll taxes. The Second Circuit overturned the Tax Court and held that the employee’s fraud meant that the employer’s statute of limitations never closed for tax assessment purposes.
Russ Fox has a helpful tip: A Sure-Fire Way to Get Indicted
There are many ways to get in trouble with tax law. As I have said in the past, if you want to get indicted it’s a bit harder. It helps to be a celebrity, have a very large tax debt, not report large amounts of funds in foreign financial accounts, or abscond with trust fund taxes. I need to add another item to that list: File liens against IRS employees who are investigating you.
For some reason, they respond badly to that.
William McBride, BEA: Personal Income Drops 3.6 Percent in January, the Most since the Clinton Tax Increase of 1993 (Tax Policy Blog). It wouldn’t be shocking if a lot of folks moved income up to 2012 to avoid the 2013 tax increases.
Paul Neiffer, When an UPREIT Might Make Sense
Trish McIntire, Catching Up On the News, a rundown of issues practitioners are running into during filing season.
TaxGrrrl, If You Qualify, File Your Taxes For Free
Howard Gleckman,Sequester, We Hardly Knew Ye (TaxVox)
Kaye Thomas, The Mindbending World of Wash Sale Calculations.
David Cay Johnston, Good News for Investors and Taxpayers (Tax.com)
Martin Sullivan, Red Hot REITs Fire-up Low Tech (Tax.com)
Peter Reilly, Time To Eliminate Joint Filing ? No, it’s not actually related to the next article.
News you can use. Leff: Medical Marijuana Providers Can Beat Oppressive Federal Taxes by Operating as Non-Profits. (TaxProf)