Monday, August 19, 2013

Not Tax Smart

The Maryland Court of Appeals has disbarred an attorney, finding that sanction appropriate

...where an attorney, as a public accountant and partner at a tax services company, created a long-term fraudulent tax deduction scheme for his clients, received compensation through the scheme, and failed to pay his personal federal taxes for eight years.

 The attorney was registered partner in Tax-Smart Technology Service, a company that created and sold to their customers the sale of websites used "to fabricate an elaborate tax fraud deduction scheme."

The scheme

...created illusory financial obligations for their customers; beyond their initial down payment when contracting with Tax-Smart to purchase a website, customers did not pay the actual market value of the websites because Tax-Smart sold the websites at stated prices vastly exceeding the value of the website's source code, domain name, and the value od services necessary to operate the website... a customer was able to claim the entire listed website as a business loss in the form of depreciation deductions over a three-year period, thereby reducing his or her tax liabilities.

The attorney prepared at least 527 such returns for customers from 2003 to 2006. (Mike Frisch)

http://lawprofessors.typepad.com/legal_profession/2013/08/the-maryland-court-of-appeals-has-disbarred-an-attorney-finding-that-sanction-appropriate-where-an-attorney-as-a-publi.html

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