September 2012 Archives

Florida Man Sentenced to Prison For Tax Evasion by Concealing Assets

September 23, 2012, by The McKellar Law Firm, PLLC

In an ordinary tax evasion case, the IRS focuses on prosecuting persons who evade taxes by either not filing tax returns or who choose to falsify income and expense information on tax returns. However, in the case of Florida resident Michael Murray, he was prosecuted for his efforts to evade payment of taxes that were legitimately owed. As a result of his actions, he was sentenced to one year and one day in Federal prison, three years of supervised release, and must pay $4.3 million in owed taxes.

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According to a press release from the Department of Justice, Michael Murray began evading taxes in 2001 when the IRS determined he had a tax debt of $889,520 for income he made in 1993. The IRS issued liens and levies against Murray's properties and companies. Instead of paying his tax debt, Murray diverted money and property for his personal use into other people's name. He also made false statements to the IRS about his assets and income. He then compounded his problems when he violated the levies the IRS had placed by writing checks to himself for his personal benefit. Murray was able to evade the IRS' collection efforts for ten years with these tactics. By that time his tax debt had become $4.3 million due to penalties and interest that accumulated.

The lesson to learn from Mr. Murray's case is that attempts to settle or reach payment agreements on IRS can be handled legitimately, or they can be handled the way which Mr. Murray chose to handle them. Programs like Offer in Compromise allow taxpayers an opportunity to settle back taxes if they qualify for the program.

Tennessee Physical Therapy Assistant Pleads Guilty to Health Care Fraud

September 19, 2012, by The McKellar Law Firm, PLLC

According to 18 USC § 1347, anyone convicted of defrauding, or attempting to defraud, a health care benefit program faces fines and possible incarceration, which could even result in a life sentence if death resulted from the deception. Former physical therapist assistant Patricia J. Boshears of Knoxville, Tennessee recently pled guilty to violating this statute, according to a press release from the U.S. District Attorney's Office.

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The press release states that Boshears formerly owned, managed, and worked as a physical therapy assistant at Total Rehab, Inc. in Knoxville, Tennessee. After an investigation by the Office of Inspector General, Health and Human Services Division, Boshears acknowledged deliberately filing false claims in an attempt defraud Medicare for patient services that did not qualify for reimbursement. In order for claims to qualify for Medicare reimbursement, all patient services must be provided by either a licensed physical therapist or under the direct supervision of a licensed physical therapist. However, from June 2009 to October 2010, Boshears and other Total Rehab, Inc. employees operated unlicensed and without supervision resulting in Medicare incurring losses of $68,096.27.

Boshears now faces a possible 10-year prison sentence as well as financial liability for restitution, forfeiture, and other fines. Her sentencing hearing is scheduled for December 17, 2012 before the Honorable Thomas W. Phillips.

Morristown, Tennessee Veterinarian Sentenced for Tax Structuring

September 4, 2012, by The McKellar Law Firm, PLLC

Many people, lawyers included, are unaware of what "tax structuring" or "structuring payments" involves, but the consequences of engaging in this activity can be painful. 26 U.S.C. § 6050I and 31 U.S.C. § 5324 specifically prohibit "structuring" payments or deposits with the intent to evade tax responsibilities.

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As an example, any person who receives $10,000 or more in cash is required to report this income/receipt to the IRS via Form 8300. However, some people choose to split (or structure) payments/deposits by making multiple deposits below $10,000, instead of making one deposit exceeding $10,000. Therefore, such a person would try to avoid the filing of a Form 8300, which means the money would not be reported to the IRS as required.

In an example closer to home, last month, Larry Mark Mangum, a veterinarian from Morristown, Tennessee, was sentenced by the U.S. District Court in Greeneville, "to serve 60 days in prison, five years probation, pay a $50,000 fine and complete 350 hours of community service" for structuring currency transactions to evade the reporting requirements made by the federal law, according to a press release from the Department of Justice. Mangum admitted he was making numerous deposits under $10,000 to keep the banks from filling out Form 8300 and reporting it to the Internal Revenue Service. In a two-year period, Mangum made over $400,000 cash deposits to three different banks.

31 U.S.C. § 5324(d) states that if a person violates this law, he/she can serve up to 5 years in prison and be fined. If a person "violates this section while violating another law of the Unites States or as part of a pattern of an illegal activity involving more than $100,000 in a 12-month period shall be fined twice the amount provided in subsection (b)(3) or (c)(3) of section 3571 of title 18, United States Code, imprisoned for not more than 10 years, or both."