Another Naughty list; a couple of sharks; Miami vice; and other highlights of recent tax cases.
Washington, D.C.: Recent IRS Office of Professional Responsibility disciplinary sanctions include censure, suspension or disbarment from practice before the IRS. Individuals disciplined include:
California: Enrolled Agent William E. Fulton, Agoura Hills, indefinite from March 18, 2025; CPA Mark L. Englander, Westlake Village, indefinite from Oct. 1, 2024; and CPA Walter W. Knauss III, Westlake Village, indefinite from Dec. 4, 2024.
Connecticut: Attorney Scott M. Schwartz, Berlin, indefinite from March 18, 2025.
Florida: Attorney William Kalish, Tampa, indefinite from Oct. 21, 2024.
Georgia: Attorney Nevada M. Tuggle, Duluth, indefinite from March 18, 2025; CPA William B. Tomasello, Forest Park, and CPA Victor C. Smith, Woodstock, both indefinite from Jan. 21, 2025.
Hawaii: Enrolled Agent Michele K. Slone, Hilo, indefinite from March 18, 2025.
Illinois: Attorney Matthew E. Peek, Champaign, indefinite from March 18, 2025.
Indiana: CPA Michael M. Harman, Modoc, indefinite from Nov. 20, 2024, and attorney Jason M. Smith, Seymour, indefinite from Oct. 21, 2024.
Massachusetts: Enrolled Agent Christine K. Kim, Burlington, indefinite from Nov. 20, 2024.
Mississippi: Attorney Charisse C. Gordon, Raymond, indefinite from Feb. 18, 2025.
Missouri: CPA William R. Tillmon III, St. Joseph, indefinite from Nov. 10, 2024, and attorney Catherine E. Chollet, St. Louis, indefinite from March 27, 2025.
New York: CPA Kimberly Johnson, Bronx, indefinite from Nov. 14, 2024, and CPA George O. Sanossian, Scarsdale, indefinite from March 11, 2025.
Oregon: CPA Peter J. Magee, Portland, indefinite from Jan. 21, 2025.
Pennsylvania: CPA Michael A. Stello, Punxsutawney, indefinite from Feb. 28, 2025.
Texas: CPA Robert A. Malphurs, Dallas, indefinite from Dec. 4, 2024; Enrolled Agent John A. Castro, Mansfield, indefinite from March 27, 2025; and Enrolled Agent Keith M. Schmitz, San Antonio, indefinite from March 11, 2025.
West Virginia: CPA George W. Jordan, Harpers Ferry, indefinite from Dec. 4, 2024.
Reinstated to practice before the IRS were CPA Willie Cooper Jr., in Fayetteville, North Carolina, (effective Jan. 8, 2025) and CPA Mitchell L. Klein, in New City, New York, (effective July 22, 2024).
San Jose, California: Execs Lalo Valdez and Matthew Olson have pleaded guilty to not paying over employment taxes to the IRS.
They operated a health informatics and product development company that provided clinical care and technology services; Valdez was the CEO and Olson the CFO. For every quarter from 2017 through the second quarter of 2021, the two withheld employment taxes from employees' wages but did not pay them over or report them to the IRS. They instead spent the money on country club memberships and season tickets to the San Jose Sharks.
Olson was also one of the owners and operators of a day spa in Saratoga, California. From the second quarter of 2017 through the fourth quarter of 2020, he collected but did not pay over or report similar taxes to the IRS.
Olson caused a total tax loss to the IRS exceeding $2.1 million. Valdez caused a total tax loss to the IRS of nearly $1.5 million.
Sentencing is Oct. 20. Both face up to five years in prison as well as a period of supervised release, restitution and monetary penalties.
Miami: Tramaine Liptrot, 43, a Miami police officer who has been relieved of duty, has pleaded guilty to wire fraud in connection with fraudulent applications for two Paycheck Protection Program loans totaling more than $200,000.
Liptrot, along with being a police officer, was owner and president of Liptrots Tax Services, where he fraudulently obtained two PPP loans in the name of "Liptrots Tax." On June 22, 2020, working with the associate, Liptrot caused the submission of a false and fraudulent PPP loan application on behalf of Liptrots Tax, falsely claiming that the company had an average monthly payroll of $36,700 for four employees; he also submitted a fraudulent Form 944, falsely claiming that Liptrots Tax paid its employees $440,397 during 2019. The company obtained some $91,750 in PPP loans.
The following March, again working with the associate, Liptrot caused the submission of a false and fraudulent second-draw PPP application for Liptrots, falsely claiming that the company had an average monthly payroll of $43,369 and including a fraudulent 944 claiming that Liptrots paid $496,428 in wages and other compensation in 2020. The company then obtained some $108,422 in PPP loans.
Sentencing is Aug. 6. Liptrot faces up to 20 years in prison.
Hartford, Connecticut: Tax preparer Clyde Gibson Jr., 43, has pleaded guilty to tax fraud.
From at least 2015 into 2024, Gibson was a tax preparer under the name Build Understand Destroys LLC. He prepared thousands of federal returns, many of which claimed false deductions.
On some returns, Gibson included false Schedules C, which reported that his clients had operated sole proprietorship businesses and had incurred expenses and losses when in fact they had not operated such businesses and had not incurred the expenses. On some returns, Gibson included false Schedules D, which reported that his clients had incurred capital losses, including carryover losses, or bad debts when the clients had incurred no such capital losses and bad debts in the claimed amounts.
During the investigation, Gibson met with an undercover agent posing as a client. The agent provided Gibson with a W-2 for 2021 and offered no information about valid deductions for business losses, capital losses and bad debt. Gibson initially prepared an appropriate return from which the agent would have owed taxes. Gibson then voluntarily opted to edit the return to reflect false and fraudulent information on the Schedules C and D.
During the 2016 through 2022 tax years, Gibson prepared at least 135 returns containing fraudulent information, causing a loss to the IRS of at least $125,197, which Gibson has agreed to pay in restitution.
He pleaded guilty to one count of aiding and assisting in the preparation of false and fraudulent income tax returns, which carries a maximum of three years in prison.
Yeadon, Pennsylvania: Tax preparer James Jean, 57, has been sentenced to three years in prison, a year of supervised release, a $10,000 fine and restitution of $12,717 for including false energy credits in tax forms that he prepared for clients.
To inflate refunds, during tax years 2018 to 2020 he prepared at least 146 returns for clients that falsely offset tax liabilities or claimed reimbursable credits for alleged expenditures on wind turbines, solar panels or other energy improvements. Jean caused his clients to understate their tax liabilities by more than $700,000.
In September, he pleaded guilty to aiding and assisting in the preparation of a false return and to filing the other 145 false returns, along with his own false returns for the same three years.
