Cincinnati Tax Resolution Powered by Toph Sheldon 9200 Montgomery Rd., Ste. 7B Cincinnati, OH 45242
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513-513-8674 513TAX.COM
INSIDE
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Toph Scores: 3 Lucky Golf Outings in a Single Year
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From Thankful Jars to Turkey Trivia Toph Negotiates 90% Off a Client’s Tax Bill Ashley’s Corner: A Digital Family Calendar Makes Doing Chores Cool Apple-Cranberry Salad
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Early Release of a Record-Breaking Tax Fraud Perpetrator
A Tax Fraud Mastermind Gets Early Release TOPH’S TAX NIGHTMARES
The IRS’s enforcement weapons are powerful enough to give delinquent taxpayers nightmares, from seizing bank accounts and assets to garnishing wages. But it takes a special kind of crime to send a tax scammer to jail. A defendant’s intentions are critical in setting the severity of the punishment sought by the IRS and the U.S. Justice Department. When prosecuting a case a decade ago against former Chicago attorney Paul M. Daugerdas, the perpetrator of the largest tax shelter fraud in history, government lawyers deemed Daugerdas’ motives plenty sinister enough for a federal judge to send him away. U.S. District Judge William H. Pauley III did exactly that. In 2014, he sentenced Daugerdas, who was 63 years old at the time, to 15 years in federal prison. Daugerdas denied any wrongdoing. His case made the news again last year, when he was among 1,500 prisoners whose sentences were commuted by former President Joe Biden. Daugerdas wasn’t pardoned for the crime; the commutation merely shortened his sentence. He had been serving his time in home confinement since the pandemic.
deliberately sought to weave “an intricate web of deceit” that enabled clients to evade $1.6 billion in taxes by using a cookie-cutter
product designed to create fictitious investment losses. His massive fraud also brought down his once-prominent law firm, Jenkins & Gilchrist. The Texas- based firm was toppled by civil suits filed by clients. The firm entered a no-prosecution agreement with the government, closed its doors, and paid a $76 million fine.
Daugerdas may have shed his electronic ankle bracelet, but the commutation didn’t free him from his legal obligation to pay restitution to victims of the financial chaos he left in his wake. He was ordered to forfeit $164 million in proceeds from client transactions, including a vacation home on Lake Geneva, Wisconsin, and pay an additional $371 million in restitution, with payments to begin after his release from jail.
Now nearing his mid-70s, Daugerdas is still fighting the IRS’s effort to collect restitution in court.
Daugerdas made more than $95 million in personal profit by selling phony tax-shelter schemes to clients. The Justice Department said Daugerdas
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