ACLJ Rejects Obama Administration's for Conservative Groups Unlawfully Targeted By IRS' calling it "Deeply Flawed."

Newsflash from your Hollywood Attorney:

The American Center for Law and Justice (ACLJ), which has filed a federal lawsuit representing 41 conservative groups that have been unlawfully targeted by the Internal Revenue Service (IRS), said today it is rejecting the government's offer for "expedited review" of applications for some conservative groups which have been waiting for years for a determination on their tax-exempt status, calling the offer "deeply flawed."

Last month, the IRS offered to expedite the application process for organizations seeking 501(c)(4) status by creating an arbitrary 60/40 standard for groups which would require organizations to agree to devote 60% or more of their time and expenditures on activities to promote social welfare, and 40% or less on political activity.

In rejecting the offer, the ACLJ contends that the 60/40 ratio created by the IRS is not a legal standard defined by applicable statutes or regulations.

"The IRS created this standard out of thin air in an effort to placate Americans who have been unlawfully and unconstitutionally targeted by the IRS because of their political beliefs," said Jay Sekulow, Chief Counsel of the ACLJ. "This so-called solution is deeply flawed and does nothing to address and correct the real problem at the IRS: a pervasive and systematic assault on conservative organizations. The IRS remains an agency incapable of self-governance or self-correction. Our federal lawsuit is moving forward to stop this abusive targeting scheme and to hold those responsible for this disturbing conduct accountable."

In a letter rejecting "expedited review" for seven groups represented by the ACLJ, Chief Counsel Jay Sekulow told the Justice Department:   ". . . the 60/40 percentage representations which you propose to impose upon our clients in order for them to be eligible for the expedited process are not legal standards defined by applicable statutes or regulations. These percentages are merely safe harbor provisions the IRS has crafted in response to the problems that have been created by its own admitted misconduct."

Noting that each application of the seven organizations seeking 501(c)(4) status have now been pending for more than 645 days, and in one case, for 1,297 days.

The ACLJ tells the DOJ that "because these seven clients have been awaiting determination for years and have complied with all legitimate requests for additional information, we request that the IRS complete its review of their applications and make a final determination immediately."

The seven organizations which reject the IRS offer: Greater Phoenix Tea Party Patriots in Arizona, Allen Area Patriots in Texas, Laurens County Tea Party in South Carolina, North East Tarrant Tea Party in Texas, Myrtle Beach Tea Party in South Carolina, Albuquerque Tea Party in New Mexico, and the Acadiana Patriots in Louisiana.

This development comes just one day before Congressional hearings resume on the IRS scandal before the House Oversight Committee.

The ACLJ's lawsuit, posted here, urges the court to find that the Obama Administration overstepped its authority and violated the First and Fifth Amendments of the U.S. Constitution, the Administrative Procedure Act, as well as the IRS's own rules and regulations. The lawsuit requests a declaratory judgment that the Defendants unlawfully delayed and obstructed the organizations' applications for a determination of tax-exempt status by means of conduct that was based on unconstitutional criteria and impermissibly disparate treatment of the groups.

The suit also seeks injunctive relief to protect our clients – and their officers and directors – from further IRS abuse or retaliation. Further, the lawsuit seeks compensatory and punitive monetary damages to be determined at trial at a later date.

The ACLJ represents a total of 41 organizations in 22 states in the lawsuit. The names of the organizations represented are available here. Of the 41 groups, 19 organizations received tax-exempt status after lengthy delays, 17 are still pending, and 5 withdrew applications because of frustration with the IRS process.

The IRS contends that the targeting scheme originated with a couple of rogue IRS agents out of the Cincinnati, Ohio office and contends the abusive conduct has been halted. However, the ACLJ has correspondence showing this tactic was used not only in the Cincinnati office, but also from two offices in California – El Monte and Laguna Niguel – as well as the national office in Washington, D.C. In fact, the Washington office sent a letter to one of our clients as recently as April 2013.

Furthermore, the ACLJ has letters signed by Lois Lerner, Director of Exempt Organizations, suggesting her personal involvement in sending invasive questionnaires to 15 of our clients in March 2012 - some nine months after she was told about the scheme and promised to stop it.

The ACLJ has heard from nearly 120,000 Americans calling on President Obama and members of Congress to end the IRS abuse.

Source... PR Newswire

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IRS Posted 100,000+ Social Security Numbers on a Website

The IRS mistakenly posted the Social Security numbers of tens of thousands of Americans on a government website, the agency confirmed Monday night. One estimate put the figure as high as 100,000 names.

The numbers were posted to an IRS database for tax-exempt political groups known as 527s and first discovered by the group Public.Resource.org.

The California-based group said it learned of the "privacy breach" while working on an unrelated audit of an “improperly vetted shipment” of IRS data on DVDs and promptly informed the agency, which shut down the site the next day. The group said the Social Security numbers were largely those of donors, though some were also from people who prepared tax returns to furnish to the IRS.

An IRS spokesman told FoxNews.com on Monday the agency was alerted about a "substantial number" of Social Security numbers posted on the site and removed web access to the information "out of an abundance of caution." The spokesman also said the IRS is now "assessing the situation and exploring available options."

A message on the agency’s 527 homepage asks visitors to check back Monday, but the site was still down Monday evening.

Public.Resource.org. founder Carl Malamud told FoxNews.com on Monday night that roughly 100,000 Social Security numbers were exposed.

Malamud said in a statement on the group's website that it hopes the Obama administration will act to restore access to the agency's nonprofit database and resolve its concerns over what it described as a "serious violation of federal law."

"It is time now for the administration to send a tiger team over to the [IRS] to help fix their information management practices," Malamud said.


Read More... http://www.foxnews.com/politics/2013/07/09/group-irs-mistakenly-posted-thousands-social-security-number-on-website/#ixzz2YYtUepPA

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41 More Groups In Federal Lawsuit Against IRS

The American Center for Law and Justice today filed an amended lawsuit in federal court in Washington, D.C. – adding an additional 16 Tea Party and conservative organizations, including a pro-life group, to the complaint – bringing to 41 the total number of organizations represented in the court challenge. On May 29, 2013, the ACLJ filed the initial lawsuit on behalf of 25 organizations arguing top Obama Administration officials – including those at the Internal Revenue Service – violated the constitutional rights of the groups by secretly targeting these organizations because of their political beliefs.

"The floodgates opened after we filed our initial lawsuit," said Jay Sekulow, Chief Counsel of the ACLJ. "We have been contacted by many additional organizations that have been unlawfully targeted by the IRS – revealing that this unconstitutional scheme was pervasive and damaging to our clients. As Congress continues its investigation, and as we expand our federal lawsuit, we're confident that the truth will be revealed and important questions answered: How did this targeting scheme begin? Who ordered it? How could the White House counsel and White House chief of staff know about this tactic but the President did not? We remain dedicated to ensuring that those responsible for this unconscionable scheme are held accountable."

The amended complaint, which adds 16 organizations to the original list of 25 groups, argues that IRS officials "working in offices from California to Washington, D.C., pulled applications from conservative organizations, delayed processing those applications for sometimes well over a year, then made probing and unconstitutional requests for additional information that often required applicants to disclose, among other things, donor lists, direct and indirect communications with members of legislative bodies, Internet passwords and usernames, copies of social media and other Internet postings, and even the political and charitable activities of family members."

Among the organizations added to the complaint is a pro-life group singled out because of its opposition to abortion.

The ACLJ contends the group, AMEN (Abortion Must End Now) – based in Yuma, AZ – was singled out because of its name and because the group is "focused on defending the Sanctity of Life and to put an end to abortion once and for all" and intends to "provide education . . . about the effects of abortion and to present pro-life brochures." The group applied for 501(c)(3) status in 2010 and its application is still pending.

In a letter dated October 20, 2010 to AMEN, an IRS specialist in the Cincinnati office questioned the appropriateness of the organization's goal to provide education and awareness about its beliefs that human life must be protected. In fact, the letter stated that IRS policy draws a bright line – classifying certain activities as political rather than educational – even questioning the organization's communication strategy and content.

The IRS letter to the pro-life group stated that the communication method used by the group "will not be considered educational . . . if it fails to provide a development from the relevant facts that would materially aid a listener or reader in a learning process." The IRS letter also cautioned against using what it termed as "strong emotional feelings" in an organization's messaging.

"This is outrageous," said Sekulow. "Now we have evidence that the IRS is somehow uniquely qualified to make a determination about content and regulate how a pro-life organization can explain its mission and beliefs. Imagine the outcry if Planned Parenthood or NARAL was subjected to this abuse. This is another blatant example of an IRS out of control – an agency that embraces unlawful and unconstitutional conduct."

The ACLJ also argues that another organization – the Arlington Tea Party of Arlington, TX – received harassing and invasive questions from the IRS. In a letter dated February 16, 2012, an IRS specialist demanded that the group provide "a temporary Username and Password that we could use to review your organization's website." The IRS also demanded "hardcopy printouts" of its social media pages, copies of all solicitations and documents concerning the organization's fundraising activities "in an election year and non-election year," and "copies of handouts to the audience" and "workshop materials that instructors will use" at the organization's public events. The Arlington Tea Party applied for 501(c)(4) status in 2011 and the case is still pending.

The amended lawsuit, posted here, urges the court to find that the Obama Administration overstepped its authority and violated the First and Fifth Amendments of the U.S. Constitution, the Administrative Procedure Act, as well as the IRS's own rules and regulations. The lawsuit requests a declaratory judgment that the Defendants unlawfully delayed and obstructed the organizations' applications for a determination of tax-exempt status by means of conduct that was based on unconstitutional criteria and impermissibly disparate treatment of the groups.

The suit also seeks injunctive relief to protect our clients – and their officers and directors – from further IRS abuse or retaliation. Further, the lawsuit seeks compensatory and punitive monetary damages to be determined at trial at a later date.

According to the complaint: "The IRS scheme had a dramatic impact on targeted groups, causing many to curtail lawful activities, expend considerable unnecessary funds, lose donor support, and devote countless hours of time to responding to onerous and targeted IRS information requests that were outside the scope of legitimate inquiry."

The ACLJ now represents a total of 41 organizations in 22 states in the lawsuit. The names of the organizations represented are available here. Of the 41 groups, 19 organizations received tax-exempt status after lengthy delays, 17 are still pending, and 5 withdrew applications because of frustration with the IRS process.

The IRS contends that the targeting scheme originated with a couple of rogue IRS agents out of the Cincinnati, Ohio office and contends the abusive conduct has been halted. However, the ACLJ has correspondence showing this tactic was used not only in the Cincinnati office, but also from two offices in California – El Monte and Laguna Niguel – as well as the national office in Washington, D.C. In fact, the Washington office sent a letter to one of our clients as recently as April 2013.

Furthermore, the ACLJ has letters signed by Lois Lerner, Director of Exempt Organizations, suggesting her personal involvement in sending invasive questionnaires to 15 of our clients in March 2012 - some nine months after she was told about the scheme and promised to stop it.

The ACLJ has heard from nearly 120,000 Americans calling on President Obama and members of Congress to end the IRS abuse.

Read More.... http://www.prnewswire.com/news-releases/aclj-now-represents-41-conservative-groups-in-federal-lawsuit-against-irs-212975111.html

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Assistant County Executive Pleads Guilty to "Honest Services" Fraud

Former Wayne County Assistant County Executive Michael Demetrus Grundy, of Detroit, Michigan, pleaded guilty today to conspiracy to commit honest services wire fraud in connection with his position as executive director of HealthChoice of Michigan, United States Attorney Barbara L. McQuade announced today.

Joining McQuade in the announcement were Special Agent in Charge Robert D. Foley, III, Federal Bureau of Investigation, and Special Agent in Charge Erick Martinez, Internal Revenue Service-Criminal Investigation.

According to court records, on October 19, 2011, Grundy caused the accountant of HealthChoice to wire transfer $400,000 to a company called Medtrix, falsely representing that the payment was pursuant to a contract between HealthChoice and Medtrix executed on March 1, 2011, for Medtrix to develop and implement an electronic medical records (EMR) system for HealthChoice medical providers. However, the contract was actually not executed until October 2011, and it was not approved by the HealthChoice Board of Trustees. Further, Medtrix never created or obtained any EMR programming, and an EMR system that was developed by another company was already being offered to HealthChoice networks and medical providers.

Co-conspirator Keith Griffin pleaded guilty on May 10, 2012, to the wire fraud scheme. He admitted that Grundy used his position as executive director of HealthChoice to authorize fraudulent payments to Medtrix and Advertise Me (also owned by Griffin) and that Griffin kicked back substantial portions of those payments to Grundy. In his plea agreement, Grundy admits that he was receiving kickbacks of funds that were supposed to be used for the benefit of the participants of HealthChoice insurance programs.

Grundy faces a maximum of 20 years in prison, a fine of up to $250,000, and forfeiture of the unlawful payments he received.

United States Attorney McQuade said, “The citizens of Wayne County deserve honest services from their public officials. It is particularly offensive when corruption comes from officials entrusted to promote health and welfare. We will continue to prosecute public officials who enrich themselves instead of serve the people.”

FBI Special Agent in Charge Robert D. Foley, III said, “We will aggressively pursue public officials like Michael Grundy who are charged with promoting the health and welfare of our citizens, but who instead corruptly use their positions of power for self gain.”

“Grundy abused his powers by utilizing his positions to discreetly conduct illegal activities and receive kickbacks,” said IRS-CI Special Agent in Charge Erick Martinez. “IRS-CI is committed to following the money trail to ensure that public officials who use their office to line their own pockets are brought to justice and deprived of their ill-gotten gains.”

The case was investigated by agents of the FBI and IRS. This case is being prosecuted by Assistant United States Attorneys Elizabeth A. Stafford, Gjon Juncaj, and Chantale Fiebig.

Source... http://www.fbi.gov/detroit/press-releases/2013/former-wayne-county-assistant-county-executive-pleads-guilty-to-honest-services-fraud?utm_source=twitterfeed&utm_medium=twitter

Court Ruling for Sly Stone's Financial Downfall

The psychedelic funk superstar alleged that in 1989, he was induced into giving up much of his song royalties by a manager and attorney fueling his drug addictions. Sony Music and Warner Music won't have to pay for that.

The subject of the ruling is Sly Stone, born as Sylvester Stewart, who as the front man for Sly and the Family Stone, blazed a path for a progressive mixture of funk, soul and psychedelic music and whose songs like "Everyday People" and "Hot Fun in the Summertime" remain well-played on radio.

Stone's troubles with drugs and the Internal Revenue Service are well known, but in a lawsuit over "tens of millions" of dollars in allegedly misappropriated royalties against nearly three dozen individuals and entities, including an ex-manager, a lawyer and Sony, Warner and Broadcast Music, Inc (BMI), he detailed the full extent of his financial troubles and poor deal-making. Unfortunately, for Stone, an appeals court isn't giving him much relief.

We'll pick up Stone's story in the mid-70's when already a successful musician, he began to run into some personal problems that required Ken Roberts, Stone's friend and one-time manager, to advance some money and pay off some debts. In return, Stone irrevocably assigned Roberts his BMI-administered performance-right royalties.

Then, in 1980, the IRS levied a multi-million dollar tax lien upon Stone's income. For about the next 15 years, much of the money that was derived from Stone's hit songs was routed to government tax collectors.

In 1985, Stone sold his publishing interest in most of his existing musical compositions to Michael Jackson's MiJac Music company, but retained the songwriter's share of the royalties. But that too ended up with the IRS.

Full Ruling Here... http://www.courts.ca.gov/opinions/nonpub/B236286.PDF

The California Appeals Court ruling on Thursday only addresses the liability of the big music companies -- Sony, BMI and Warner -- that allegedly allowed royalties to be diverted without doing the necessary due diligence.

In short, Stone may have made bad deals in lifetime, but for the purposes of holding these companies accountable, the appeals court affirms that he has no standing to sue. He can't allege breach of contract against BMI because he assigned his royalty payments to Roberts. He can't make various claims against Sony because the record label "properly relied on" those 1989 agreements presented when figuring out where to direct royalties. Similarly, he can't sue Warner. Quoting the trial judge, the appeals court notes "the royalty companies were simply doing what they were instructed to do for years upon years.”

In the ruling, an appeals court overturns the trial judge's ruling that Roberts lacked standing to sue BMI. It also waives away BMI's contention that his claim of breach of contract is barred by statute of limitations, although the appeals judge says he can only possibly collect for four years prior to the launch of the lawsuit for allegedly bad actions. Yes, BMI paid out to Majoken, but the appeals court says "that is neither the beginning nor the end of the story" as "BMI had a contractual duty to insist on written instructions from Roberts" when in 1996, it changed where the money was going.

Read More... http://www.hollywoodreporter.com/thr-esq/sly-stones-financial-downfall-detailed-561175

Takedown Largest International Money Laundering Prosecution in History

The Manhattan U.S. attorney and representatives from several law enforcement agencies announced Tuesday an indictment charging Liberty Reserve, one of the world’s largest digital currency companies, and seven of its principals and employees with money laundering and operating an unlicensed money transmitting business. The charges stem from an investigation by the Global Illicit Financial Team which consists of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), the U.S. Secret Service and the Internal Revenue Service’s (IRS) Criminal Investigations Division.

Law enforcement officials arrested five defendants Friday.
Arthur Budovsky, 39, the principal and founder of Liberty Reserve, and Azzeddine El Amine, 46, a manager of Liberty Reserve’s financial account, were both arrested in Spain. Vladimir Kats, 41, the cofounder of Liberty Reserve, was arrested in Brooklyn. Mark Marmilev, 33, and Maxim Chukharev, 27, both who helped design and maintain Liberty Reserve’s technological infrastructure, were arrested in Brooklyn and Costa Rica, respectively.

The defendants are each charged with one count of conspiracy to commit money laundering, which carries a maximum term of 20 years in prison, one count of conspiracy to operate an unlicensed money transmitting business, which carries a maximum term of five years in prison, and operation of an unlicensed money transmitting business, which carries a maximum term of five years in prison.

Two other defendants, Ahmed Yassine Abdelghani ("Yassine") and Allan Esteban Hidalgo Jimenez ("Hidalgo") are at large in Costa Rica.

The defendants are accused of structuring Liberty Reserve as a criminal bank-payment processor, designed to help users conduct transactions anonymously and launder the proceeds of their crimes. Liberty Reserve is alleged to have had more than one million users worldwide, including more than 200,000 users in the United States, who conducted approximately 55 million transactions – virtually all of which were illegal. Law enforcement officials believe that more than $6 billion in suspected criminal proceeds have been laundered via Liberty Reserve because it provided an infrastructure that enabled cyber criminals around the world to conduct anonymous and untraceable financial transactions.

The defendants also protected the criminal infrastructure of Liberty Reserve by, among other things, lying to anti-money laundering authorities in Costa Rica and pretending to shut down the company after learning it was being investigated by U.S. law enforcement. They continued operating the business through a set of shell companies, moving millions of dollars through shell company accounts maintained in Cyprus, Russia, China, Hong Kong, Morocco, Spain, Australia and elsewhere.

In addition to the criminal charges brought in the indictment, law enforcement seized the Liberty Reserve domain name and the domain names of four exchanger websites that were controlled by one or more of the defendants. They also restrained or seized 45 bank accounts. Prosecutors filed a civil action against 35 exchanger websites seeking the forfeiture of the exchangers’ domain names because the websites were used to facilitate the Liberty Reserve money laundering conspiracy and constitute property involved in money laundering.

The U.S. Department of the Treasury and its Financial Crimes Enforcement Network also named Liberty Reserve as a financial institution of primary money laundering concern under Section 311 of the Patriot Act.

"The actions of the U.S. Secret Service, IRS and HSI in dismantling the Liberty Reserve operation are critical because transnational criminal organizations can succeed only so long as they can funnel their illicit proceeds freely and without detection," said HSI New York Special Agent in Charge James T. Hayes Jr. "HSI is proud of its partnership through the Global Illicit Financial Team and will continue to aggressively target financial institutions that deliberately enable businesses and individuals to evade global financial systems in furtherance of criminal schemes."

The investigation and takedown involved law enforcement action in 17 countries, including: Costa Rica, the Netherlands, Spain, Morocco, Sweden, Switzerland, Cyprus, Australia, China, Norway, Latvia, Luxembourg, the United Kingdom, Russia, Canada and the United States.

Several international law enforcement agencies also participated in the investigation, including: the Judicial Investigation Organization in Costa Rica, the National High Tech Crime Unit in the Netherlands, the Spanish National Police, the Swedish National Bureau of Investigation’s Financial and Economic Crime Unit and Cyber Crime Unit, and the Swiss Federal Prosecutor’s Office.

Source... http://www.ice.gov/news/releases/1305/130528newyork.htm

Federal Lawsuit Against IRS Abuse from 25 Tea Party Groups

The American Center for Law and Justice today filed a significant lawsuit in federal court in Washington, D.C., on behalf of 25 Tea Party and conservative organizations against the U.S. Attorney General, Treasury Secretary, and Internal Revenue Service - including top IRS officials.

"The IRS and the federal government are not going to get away with this unlawful targeting of conservative groups," said Jay Sekulow, Chief Counsel of the ACLJ. "As this unconstitutional scheme continues even today, the only way to stop this flagrant and arrogant abuse of our clients' rights is to file a federal lawsuit, which we have done. The lawsuit sends a very powerful message to the IRS and the Obama Administration – including the White House: Americans are not going to be bullied and intimidated by our government. They will not be subjected to unconstitutional treatment and unlawfully singled out and punished because of their ideological beliefs. Those responsible for this unprecedented intimidation ploy must be held accountable."

The lawsuit, posted here, urges the court to find that the Obama Administration overstepped its authority and violated the First and Fifth Amendments of the U.S. Constitution, the Administrative Procedure Act, as well as the IRS's own rules and regulations. The lawsuit requests a declaratory judgment that the Defendants unlawfully delayed and obstructed the organizations' applications for a determination of tax-exempt status by means of conduct that was based on unconstitutional criteria and impermissibly disparate treatment of the groups. The suit also seeks injunctive relief to protect our clients – and their officers and directors – from further IRS abuse or retaliation. Further, the lawsuit seeks compensatory and punitive monetary damages to be determined at trial at a later date.

In the lawsuit, the ACLJ cites six counts arguing the federal government violated the Constitution, federal law, and even its own rules and regulations.

The suit contends that the Obama Administration "unlawfully delayed and thereby effectively denied approval of Plaintiffs' applications for tax exempt status by means of a comprehensive, pervasive, invidious and organized scheme that purposefully established unnecessary and burdensome inquiries and scrutiny of Plaintiffs' applications based solely upon Plaintiffs' political viewpoints (or Defendants' assumption of Plaintiffs' viewpoints, based on their organizational names)."

Further, the complaint asserts that the federal government's "unlawful conduct included but was not limited to excessive scrutiny of Plaintiffs' applications by requiring donor names, listing of issues important to Plaintiffs' organizations, including their positions on such issues, the contents of communications between the organizations and legislative bodies, the applicants' criteria for membership, volunteer names and the political affiliations of persons associated with the organizations . . ."

The ACLJ represents a total of 25 organizations in the lawsuit, with additional groups likely to be added to the suit as it progresses. The names of the organizations represented are available here. Of the 25 groups, 13 organizations received tax-exempt status after lengthy delays, 10 are still pending, and two withdrew applications because of frustration with the IRS process.

The ACLJ lists as defendants in the case: U.S. Attorney General Eric Holder ; the Internal Revenue Service; Treasury Secretary Jacob Lew ; Steven Miller , former acting Commissioner of the IRS; Lois Lerner , Director of Exempt Organizations Division for the IRS; Holly Paz , Director, Office of Rulings and Agreements; and unknown named officials inside the IRS.

The IRS contends that the targeting scheme originated with a couple of rogue IRS agents out of the Cincinnati, Ohio office and contends the abusive conduct has been halted. However, the ACLJ has correspondence showing this tactic was used not only in the Cincinnati office, but also from two offices in California – El Monte and Laguna Niguel – as well as the national office in Washington, D.C. In fact, the Washington office sent a letter to one of our clients as recently as one month ago.

Furthermore, the ACLJ has letters signed by Lois Lerner, Director of Exempt Organizations, suggesting her personal involvement in sending invasive questionnaires to 15 of our clients in March 2012 - some nine months after she was told about the scheme and promised to stop it.

The ACLJ has heard from nearly 100,000 Americans calling on President Obama and members of Congress to end the IRS abuse.

Read More.... http://www.prnewswire.com/news-releases/aclj-files-federal-lawsuit-against-irs-on-behalf-of-25-tea-party-groups-209364371.html

Billionaire Sumner Redstone Still Owes $1.1 Million in Taxes from 1972

Sumner Redstone has been battling the IRS over $1.1 million he allegedly owes because of a 41-year-old tax liability.

The IRS says that the billionaire chairman of CBS and Viacom failed to report giving a gift of stock in National Amusements -- majority owned by Redstone -- to son Brent and daughter Shari in 1972.

Redstone, who turns 90 on May 27 and is worth an estimated $4.9 billion, says the stock wasn’t a taxable gift but “an ordinary business transaction” that was the result of an intra-family lawsuit.

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An attorney for Redstone didn’t respond to a request for comment Thursday.
The IRS says that the billionaire chairman of CBS and Viacom failed to report giving a gift of stock in National Amusements -- majority owned by Redstone -- to son Brent and daughter Shari in 1972.

Redstone, who turns 90 on May 27 and is worth an estimated $4.9 billion, says the stock wasn’t a taxable gift but “an ordinary business transaction” that was the result of an intra-family lawsuit.

The Bloomberg article cites multiple tax experts who note how unusual the IRS is behaving in the matter. “I can’t remember ever hearing of anybody going back 41 years to raise an issue. It’s really unprecedented in my experience,” says one. “They have to have a reason for being so riled up,” says another.

The “bitter family dispute” that is at the heart of the IRS claim, according to a petition, involved Redstone’s late brother Edward’s threat to sell shares of National Amusements outside the family. A settlement resulted in the brothers directing the shares to their children.

Read More... http://www.hollywoodreporter.com/news/irs-sumner-redstone-owes-11-450959

IRS Employees Charged With Stealing - 24 Employees

Federal and Tennessee state prosecutors on Wednesday charged 24 current and former Internal Revenue Service employees with “fraudulently obtaining more than $250,000 in government benefits.”

According to a statement released by the office of U.S. Attorney Edward Stanton III, federal authorities charged 13 individuals with “falsely [stating] that they were unemployed,” while applying for and obtaining numerous federal benefits including unemployment insurance, money from the Supplemental Nutrition Assistance Program and Housing Choice vouchers.

If convicted, the accused could face up to five years in prison under the law.  Stanton said the case demonstrated the Justice Department’s “unwavering resolve” to work with law enforcement and “hold accountable anyone” for fraudulently claiming government benefits.

Stanton added: “While these IRS employees were supposed to be serving the public, they were instead brazenly stealing from law-abiding American taxpayers.”

State authorities charged the other 11 individuals with “theft of property over $1,000,” which according to the Associated Press, carries a possible sentence ranging from probation to 12 years in prison if convicted. Taxes are “supposed to support our nation and assist individuals in need” and not supplement “freeloaders who are gaming the system,” Shelby County District Attorney General Amy Weirich said.

“Taxpayers can take comfort in knowing that we take these matters seriously and that we will prosecute these individuals to the fullest extent possible,” Weirich said.

The case is similar to another incident announced Monday by the Justice Department.  In Indianapolis, U.S. Attorney Joseph H. Hogsett said that his office was charging four former IRS call center employees with defrauding taxpayers of $30,000 in federal benefits. According to a statement published by Hogsett’s office, the individuals were “found to have engaged in a scheme” where they falsely claimed unemployment, even as they were employed by the agency, to claim government benefits.

“These are not victimless crimes -- any fraud or waste of taxpayer resources is a crime against every taxpayer in this state,” Hogsett said in a statement.

http://www.govexec.com/management/2013/04/24-current