May 2012 Archives

Kentucky Minister Predicts Coming of Christ, While U.S. Govt. Predicts Conviction for Tax Evasion

I have often said that clients charged with tax crimes are my favorite clients because they often passionately believe that they are right in their beliefs. Sadly, they are often wrong, but they are at least acting with conviction. However, it is a rare case when a defendant can combine their own misguided beliefs on the tax laws with an incorrect prediction of the return of Jesus Christ. Such a defendant can be found in the form of Kentucky minister Ronald E. Weinland.

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Weinland was indicted on November 10, 2011, for attempting to evade taxes in excess of $350,000 for tax years 2004 - 2008. A copy of the Indictment can be found here. According to the Indictment, Weinland failed to file tax returns during these periods, he used church contributions for his personal use without reporting the funds as income, and he failed to file a Report of Foreign Bank (FBAR) regarding a bank account that he had in Switzerland. His trial is scheduled for this upcoming Monday, June 4, 2012.

In what would have been perhaps the most unique ground to ask for a continuance of a trial, Weinland predicted that Jesus Christ would return to the Earth on May 27, 2012. Unfortunately for Weinland, his trial is still scheduled to proceed next week. If convicted, he could face up to 5 years in prison, restitution, fines, and court costs for violating 26 U.S.C. 7201.

More information on Weinland can be found at this Fox TV station's website here.

Norman McKellar Awarded Top Attorney Badge and Clients' Choice Badge by Avvo

The McKellar Law Firm, PLLC, is pleased to announce that Norman D. McKellar has received the Top Attorney Badge and Clients' Choice Badge, both of which are listed below.

To see the rest of Mr. McKellar's profile on Avvo.com, please click on the icon below:
Avvo - Rate your Lawyer. Get Free Legal Advice.

Child Pornography Sentences Continue to Stir Up Controversy

Some of the most challenging cases for criminal defense attorneys to take on are cases involving possession of child pornography. As one might imagine, a person accused of possessing child pornography is not likely to garner much support or sympathy from a jury member. Oddly enough, the person in the court most likely to show mercy to such a client may just be the sentencing judge.

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The Kingsport Times recently linked an article from the Associated Press regarding the continuing debate over how to properly sentence those persons convicted of violating the child pronography laws, which are primarily federally codified at 18 U.S.C. ยง 2252. The article claims that the U.S. Sentencing Commission plans to release a report at the end of the year that would propose changes to the sentencing guidelines used on defendants convicted of possessing or distributing child pornography. The reasons for the proposed sentencing changes lie primarily with the severity of the sentencing for child pornography possessors, which have resulted in offenders who distribute and possess child pornography receiving longer prison sentences than those who actually sexually molest or even rape a child.

Perhaps surprisingly, federal court judges may actually agree with proposals to reduce the punishment for such offenses. According to a 2010 survey of federal judges, 70% said the sentencing structures were too high for child pornography convictions. In practice, federal judges issued child pornography sentences that were lower than the sentencing guidelines 45% of the time in 2010. Yet even though the sentences were lower than the sentencing guidelines, the average sentence for child pornography was still higher than all other offenses except murder and kidnapping.

On the other side of the debate are prosecutors and advocates for the victims. As one victim stated, "[those who view or distribute child pornography] need to be taught how much pain they inflict and a greater term of imprisonment will teach them that, (and) will comfort victims seeking justice." A congressman showed dismay over the number of judges who are already issuing lower sentences. "I am concerned that the federal judiciary is failing to consider the severity of child pornography and its victims. This departure rate is disturbing and threatens the most vulnerable among us, our children."

In a recent article for the journal of the National Association of Criminal Defense Lawyers, former Sen. Arlen Specter of Pennsylvania and former AUSA Linda Dale Hoffa criticized the approach by Congress. "The fact that child pornography offenders can be given longer sentences than child abusers or violent offenders reflects a lack of care by Congress," Specter and Hoffa wrote. "In the rush to prove itself hostile to individuals who possess or distribute child pornography, Congress has obscured the real distinctions between different offenders."

Even with the Sentencing Commission's upcoming report and criticisms by judges, there are those who believe that Congress will most likely not act. As Professor Jelani Exum from the University Of Toledo College Of Law stated, "You don't have a built-in sympathy. Who's going to stand up and say, 'I'm fighting for child porn possessors [?]'" Former federal prosecutor Linda Hoffa shared Professor Exum's views. "If you vote against these harsher penalties, the sound bite is that you're protecting child pornographers, and that could be the end of somebody's career."

Knoxville, Tennessee Couple Indicted for Tax Fraud and Filing False Claims for Refund

According to a press release by the U.S. Attorney's Office for the Eastern District of Tennessee, a grand jury has found probable cause to indict James and Beverly Beaver, both 67, for conspiracy to defraud the United States and by filing false claims for tax refunds. Mr. Beavers was formerly employed as a research director for an engineering institute at the University of Tennessee.

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According to the indictment, the Beavers filed a false 2008 tax return and false amended 2006 and 2007 tax returns, which were filed by their accountant Penny Jones, who is/was a partner in PMDD Services, LLC, an Idaho-based tax return preparation firm. The 2008 return claimed that the Beavers were entitled to a nearly $600,000 refund, and the amended tax returns allowed the Beavers to receive $193,056 and $202,625 in tax refunds. The accountant was then paid $59,405 for her services. The Beavers also allegedly tried to hide their assets from possible IRS collection by transferring real estate title for their personal residence and a store that they own to "nominee trusts."

The Beavers are being charged with these tax crimes in the Eastern District of Tennessee, while the accountant and others in her firm are being charged with various tax crimes in the Southern District of Florida. If convicted, each defendant faces a maximum potential sentence of 20 years in prison, a criminal fine up to $1 million, and possible restitution to the IRS.

Tennessee Man Pleads Guilty to Filing False Form 941 Quarterly Tax Return

Criminal defense attorneys who focus their practice on criminal tax matters will often deal with personal income tax fraud or evasion. However, prosecutions against business owners for criminal tax fraud is an ever-present threat for entrepreneurs.

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In a case that hits awfully close to home, the United States Attorney's Office for the Eastern District of Tennessee recently posted on its website that a local small business owner has pled guilty to filing a false quarterly tax return (Form 941), also known as an Employer's Quarterly Federal Tax Return. Stanley Veltkamp of White Pine, Tennessee was the co-owner of a local Marina in Jefferson County. According to his plea agreement, Veltkamp would pay a portion of his employees' wages in check and a portion in cash in order to have the marina avoid paying its Social Security and Medicare taxes to the United States. Mr. Veltkamp now faces up to three years in prison and a $250,000 fine.

Employers are required to accurately complete a Form 941 and submit it to the IRS each quarter to report its employee's wages. When this form is submitted, employers are to also include a payment consisting of the amount withheld from an employee's paycheck. Failure to comply with federal tax laws could lead to criminal prosecution.

U.S. Supreme Court to Decide Whether the Padilla Ruling Applies Retroactively

Many criminal defense and immigration attorneys are aware of the far-reaching implications of the U.S. Supreme Court's decision in Padilla v. Kentucky. The ABA Journal has recently posted on its website that the Supreme Court is considering whether the 2010 Padilla decision will apply retroactively to convicted criminal defendants who faced deportation before the Padilla decision was made.

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In the Padilla case, the defendant pled guilty to transporting a large amount of marijuana. Mr. Padilla was not a citizen of the United States, and he asked his attorney whether he would face deportation if he agreed to the guilty plea. Relying on the fact that Padilla had lived in the United States for such a long time (and had served in the Vietnam War), his defense attorney erroneously told him that deportation would not be an issue. In reality though, pleading guilty made his deportation mandatory under the law. Padilla appealed to the Kentucky Supreme Court, insisting that had he had known that he could be deported for pleading guilty he would have gone to trial. Because the Kentucky Supreme Court denied Padilla post-conviction relief, Padilla's case eventually went to the United States Supreme Court.

The United States Supreme Court ultimately found that Padilla's defense attorney should have at least advised Padilla as to the risk of deportation, and by failing to do so had violated Padilla's Sixth Amendment right to effective counsel. Regarding whether this error was enough to reverse Padilla's conviction, the United States Supreme Court left that up to the state of Kentucky to determine.

Now, the Supreme Court must decide whether the holding in Padilla should apply retroactively. The Court has recently granted review to Chaidez v. United States, which involves a Mexican immigrant who pled guilty in 2003 to fraud involving more than $10,000, and is accordingly subject to deportation. Contrary to what the Supreme Court may have assumed when issuing the Padilla ruling, "federal and state courts are openly and intractably divided over whether the Padilla holding applies retroactively."

More information on this upcoming decision in the Chaidez v. United States matter can be found at the SCOTUSblog.

IRS May Begin Blocking Delinquent Taxpayers from Leaving the U.S.

A Bill before the Senate titled "Transportation Research and Innovative Technology Act of 2012," (SB 1813 Sec. 40203), could give the IRS the power to revoke, limit, and/or deny passports to citizens that owe back taxes despite the fact that the IRS is not the entity that issues them.

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Senate is expected to pass Section 40304 of Senate Bill 1813 which will penalize those that owe the IRS more than $50,000, have a lien or levy in place, and are behind on payments by revoking, limiting, or denying passports until the debt is paid. The exceptions would be if someone has an Installment Agreement with the IRS and are making the payments on time or if an appeal has been initiated. There is no language that states exactly how delinquent the debt must be or how long a lien or levy must be in place before action can be taken against a citizen.

Relying on language found in the Passport Act of 1926 that states, "(a)n Act to regulate the issue and validity of passports, and for other purposes," (22 U.S.C. 211(a) et seq.), the new Bill will allow the Secretary to request a Secretary of State to revoke, limit, or deny passports to persons that meet the provisions of the Bill. Prior to revocation, a passport that has been previously issued can be limited to only allow return travel to the United States or a temporary, limited passport may be issued that will only allow return travel. Exceptions to revocation are emergency or humanitarian travel.

If this Bill passes the Senate and the House of Representatives, the action of revoking a passport will be carried out by an un-elected official. There is no provision that the taxpayer has to have a judgment against them for tax evasion or fraud. Further, there is no review or approval by Congress before action is taken, which raises "due process" concerns.

Senate Bill 1813 is currently before Senate and portions of it have already been passed. Should Section 40203 pass, it will take effect January 1, 2013.