Stanley H. Block’s
IRS Times & Inquirer™
Read About Taxpayers with IRS Problems & Learn Helpful Tips on How To End Them.
|Volume VIII, Issue 9 - www.mdtaxattorney.com|
Inside This Issue…
Aspen Resident Obstructed IRS InvestigationAn Aspen resident has pleaded guilty to obstructing a tax investigation in an attempt to thwart an effort by the Internal Revenue Service to verify the legitimacy of his tax filings.
George S. Gradow, 65, is scheduled to be sentenced December 19. Gradow had previously waived his right to indictment by a federal grand jury and was charged by criminal information on June 6.
According to court records, from August 21, 2000, to March 14, 2001, Gradow allegedly obstructed and impeded the IRS by destroying, altering and/or creating documents and directing corporate employees to destroy or fabricate documents that would be used by an IRS Revenue Agent during an audit of tax returns of the defendant’s corporation.
Bookmaker Pleads Guilty to Tax EvasionA bookmaker in Cherokee County, Alabama, near Birmingham, pleaded guilty to three counts of federal excise tax evasion.
According to prosecutors, James “Frog” West, 61, of Centre, Alabama, operated a bookmaking operation and received hundreds of thousands of dollars in wagers from bettors each month that he did not report to the IRS and for which did not pay federal excise taxes. Federal law requires that a monthly report be filed each month with the IRS and that a 2% excise tax be paid on all wagers a technicality given the fact that the gambling operation itself was illegal.
West admitted to managing the illegal operation and has cooperated with law enforcement officials in an ongoing investigation into public corruption in Cherokee County.
West faces up to 15 years in prison and a fine of up to $300,000.
Wisc. Man Found Guilty of EvasionA Wisconsin man was found guilty of attempting to evade federal income taxes and making false statements to a federal grand jury.
According to trial evidence, Paul Gregory Koleske of Racine, Wisc., failed to file a federal income tax return in 1997 when he earned in excess of $200,000 from various sources, including income from a pyramid scheme involving Seleta J. Nelson Investments. In all, Koleske evaded paying more than $36,000 in income taxes.
Additionally, Koleske tried to impede the IRS investigation by making false statements to IRS agents, depositing investment income into fraudulent trust accounts, and then using bogus tax evasion schemes to justify the use of the trust.
Ct. Woman Guilty of Tax FraudShirley G. Graybill, 69, of Branford, Ct., pleaded guilty to one count of making and subscribing to a false 2002 tax return. As was revealed in court during the plea proceedings, Graybill’s Triple Diamond Foundation, which purported to be a charitable organization, was an entity created by her and her spouse to fund cancer research. However, the organization did not have tax-exempt status from the IRS.
During the 2002 tax year, Graybill transferred about $350,000 from the Triple Diamond Foundation account and used those funds as income, failing to pay $93,293 in federal taxes.
On or about October 13, 2003, Graybill filed a tax return in which she failed to claim her actual taxable income, which was about $316,519.79. As part of the plea proceeding, Graybill has agreed to pay the U.S. Treasury $93,293 in taxes plus penalties and interest for the tax year 2002.
Graybill will be sentenced in September. She faces up to three years in prison and up to $100,000 in fines.
“Those who attempt to hide assets and cheat on their taxes cheat their fellow citizens,” said U.S. Attorney Kevin J. O’Connor. “Such conduct will be vigorously investigated and prosecuted.”
Texas Man Sentenced to 1 Year for EvasionA Texas businessman has been sentenced to one year in prison and fined $20,000 after pleading guilty to tax evasion.
David L. Hirschfeld, of San Angelo, Texas, pleaded guilty in February to one-count information charging him with income tax evasion.
During the calendar year 1996, according to court records, Hirschfeld was the president and CEO of Hirschfeld Steel Co., Inc. As a part of the Hirschfeld Steel’s business operations, the company produced scrap metal as a byproduct of its manufacturing process. The scrap metal had to be discarded, but instead of throwing it away, Hirschfeld Steel sold the scrap metal to Acme Iron and Metal Company, another Texas company.
In 1996, Acme paid $140,000 cash for eight shipments of scrap metal. After accounting for business expenses, Hirschfeld received a $67,049 profit from the Acme sale. However, he did not report the income. The sales to Acme continued through 2000, and by then, Hirschfeld received a total of $240,514.16 that he did not report as income to the IRS. The total in income taxes that he evaded was $67,343.96.
Ariz. Man Pleads Guilty to Tax ChargesCraig Ellsworth Maxwell, 58, of Cave Creek, Ariz. pleaded guilty filing a false tax return. According to the plea agreement, Maxwell admitted that on February 3, 1999, he signed his name to a 1998 Form 1040 tax return which contained false information.
Maxwell admitted that he created false 1099 forms that stated that he had earned income from L&L Precision, NT Quality, NT and Falcon Lock. Maxwell indicated that out of the income he had earned, federal tax had been withheld in the amount of $22,178, which he reported on his income tax return. The false forms fraudulently reduced Maxwell’s taxes that year from $15,582 to a refund of $6,596.
He faces up to three years in prison and a $100,000 fine.
Ky. Man Pleads Guilty to False ReturnLenny George Hall, 35, of McDowell, Ky., pleaded guilty filing false income tax returns. According to court records, Hall failed to include, on his 1998 and 1999 returns, distributions that he received from the operation of his business, Poor Boys Discount Tobacco. Hall received $130,515 in 1998 and $21,374 in 1999 that he failed to report as income. As a result, Hall failed to pay income taxes of $32,901 for 1998 and $3,242 for 1999. He will be sentenced in November.
Hawaii Resident Pleads Guilty to Tax EvasionHonolulu resident Stephen B. Wilson pleaded guilty to tax evasion for the years 1998 and 1999. According to the indictment, Wilson underreported his taxable income by over $563,000 during the two-year period and $215,000 in taxes. Additionally, Wilson reported to the IRS a total of $73,431.63 in taxable income for those years. He faces up to five years in prison and a $250,000 fine for each count.
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