January, 2011

Message from Nelson & Company, P.S., CPAs

Processing of Delayed Returns - Are you affected?

The Internal Revenue Service plans a February 14th start date for processing tax returns delayed by last month's tax law changes.

E-Filed returns claiming itemized deductions on Schedule A to include the state and local sales tax deduction, the fees deduction on Form 8917, and the educator expenses deduction have all been affected. The IRS needed the extra time to update its system to accommodate the tax law changes.

Additionally, if you hired anyone during 2010 or are paying toward an employee's healthcare, we need to know.

Certified Public Accountants

IRS Times & Inquirer

Inside This Issue...

Five Indicted in Tax Refund Scheme
NJ Man Sentenced After Not Disclosing $2 Mil in Swiss Bank
Flowcharts for Health Care and the Small Business Tax Credit

Five Indicted in Tax Refund Scheme

Five people in Alabama were indicted by a federal grand jury on a variety of charges stemming from an identity theft and tax fraud conspiracy. Alchico Grant, Veronica Dale, Laquanta Grant, Isaac Dailey and Leroy Howard were charged in a 39-count indictment.

All five were charged with conspiring to defraud the United States by filing false claims. Dale was also charged with 24 counts of filing false tax returns, two counts of theft of government funds and two counts of aggravated identity theft. In addition, Alchico Grant was charged with four counts of theft of government funds; Dailey was charged with three counts of theft of government funds; and Howard was charged with two counts of theft of government funds.

According to the indictment, the defendants were involved in a conspiracy which spanned almost two years and involved using stolen identities to file tax returns claiming millions of dollars in fraudulent refunds. The indictment alleges that Dale filed false tax returns using others’ names and Social Security numbers and deposited the fraudulent refunds into bank accounts that she and her co-conspirators controlled. Dale, Alchico Grant and Laquanta Grant recruited people to set up bank accounts to be used to deposit the tax refunds. Howard and Dailey were two of those who agreed to have their bank accounts used for receiving the fraudulently obtained refunds.

NJ Man Sentenced After Not Disclosing $2 Mil in Swiss Bank

A Milltown, NJ man was sentenced to four years of probation, including a year of home confinement, for willfully subscribing to a false tax return on which he failed to disclose more than $2 million in a Swiss bank account.

Leonid Zaltsberg pleaded guilty in July. According to court records, Zaltsberg admitted that he signed and filed a false tax return for 2003 that failed to disclose his UBS account and income generated from the account’s assets.

Zaltsberg also failed to file a Report of Foreign Bank or Financial Accounts with respect to the UBS account. The account was originally opened in 1993 to hide money from the IRS.

U.S. citizens who have an interest in, or signature or other authority over, a financial account in a foreign country with assets in excess of $10,000 are required to disclose the existence of such account on their individual income tax return.

Zaltsberg admitted that his failure to disclose the existence of the UBS account on his personal income tax returns allowed him to underreport personal income for the years 2000 to 2006. In 2002, the account reached a high balance of more than $2.6 million.

For those interested, flowcharts depicting the Small Business Tax Credit and Health Care Plan are available here:

Small Business Tax Credit
Health Care


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Nelson & Company, P.S., CPAs Since 1979

Circular 230 Disclosure:
To ensure compliance with requirements imposed by the IRS, we inform you that (i) any tax advice contained in this communication (including any attachments) was not intended or written to be used, and cannot be used for the purpose of avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein.


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