Friday, April 8, 2016

Retired Tax Court Judge Indicted for Tax Evasion

You can't make this stuff up!

Former U.S. Tax Court Judge Diane Kroupa and her husband are facing criminal charges for allegedly attempting to evade more than $400,000 in federal taxes.

In an April 4 indictment, the Justice Department said that the couple "conspired to evade their tax obligations" between 2004 and 2012. Since Kroupoa began her 15-year term on the Tax Court in 2003 and retired in 2014, the alleged tax evasion occurred during the entire tenure at the Court.

The Justice Department said Kroupa's husband, Robert E. Facklera self-employed lobbyist and political consultantfraudulently claimed personal expenses as business deductions for his firm, Grassroots Consulting, including items such as spa and massage fees (oh, the life of a lobbyist!), jewelry, wine club fees and vacations to Alaska, Australia, the Bahamas, China, England, Greece, Hawaii, Mexico and Thailand.

The indictment also states that Kroupa and Fackler failed to report approximately $44,520 that Kroupa received from a 2010 land sale in South Dakota and falsely claimed financial insolvency to avoid paying tax on $33,031 on cancellation of indebtedness income. To make matters worse, the couple in 2006, allegedly concealed documents from their tax preparer and an IRS Tax Compliance Officer during an audit, and during a second audit in 2012, Kroupa and Fackler caused misleading documents to be delivered to an IRS employee in order to convince the IRS employee that certain personal expenses were actually business expenses of Grassroots Consulting.

Altogether, between 2004 and 2010, Kroupa and Fackler purposely understated their taxable income by approximately $1 million and purposely understated the amount of tax they owed by at least $400,000, according to the indictment.

We are guessing that the "I didn't know it was against the law" defense will not work really well for a former U.S. Tax Court judge.

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