Attorney-at-Law

A PLEA, BUT NO BARGAIN

In Uncategorized on 07/28/2015 at 17:37

The Section 7206 plea-cop is a minefield. I blogged this once already; see my blogpost “A Cool Cat,” 4/16/13.

But Husam A. Abu-Dayeh 2015 T. C. Memo. 136, filed 7/28/15, and his attorney (whom I’ll not name, as he will probably suffer, or has already suffered, enough) obviously missed my blogpost, because Husam copped to one count of a Section 7206(2) rap for writing fiction on Forms 1040, but got hit with civil penalties thereafter.

The Federales hit Husam for a cool $79K in losses to the fisc by reason of Husam’s chicanery regarding some 36 (or maybe 39) spurious returns Husam’s taxprep business prepared and filed.

Comes now IRS and nails Husam for $39K in $1K increments, the civil preparer penalties.

Husam and lawyer yell they gave at the office. No says IRS, read your plea bargain. And if you don’t, Judge Nega will read it for you.

“The plea agreement specifically states that it is ‘limited to the Office of the United States Attorney for the Middle District of Florida and cannot bind other federal, state, or local prosecuting authorities’. The plea agreement is a total of 12 pages, all of which are initialed or signed by petitioner except for page 10. Page 10 contains an explicit statement of petitioner’s guilt in filing materially false tax returns: ‘[D]efendant is pleading guilty because defendant is in fact guilty.’” 2015 T. C. Memo. 136, at p. 3.

Husam tries to get a CDP on his own, but his OIC is defective (no first payment, no income certification and no fee). And the first AO he spoke to cut the penalties from $39K to $36K.

Judge Nega concludes: “While we understand petitioner’s frustration at having been assessed penalties after he paid restitution to the IRS, SO X followed the requirements of section 6330(c), and her decision to uphold the NFTL was not an abuse of discretion.” 2015 T. C. Memo. 136, at p. 10. (Name omitted).

Criminal defense lawyers, read those plea agreements. Make sure they cover Treasury and IRS civil and criminal penalties. Merely covering DOJ or the US Attorney is not enough, unless you’ve warned your client and have informed written consent to go ahead.

And tell ‘em Husam sent you.

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