IRS Ordered To Compensate Taxpayers In Tax Shelter Case

by Mike Godfrey, Tax-News.com, Washington
25 May 2006

The Internal Revenue Service has been ordered by a US Tax Court Judge to repay millions of dollars in taxes, fines and interest to a group of taxpayers, after officials from the agency were found to have effectively bribed witnesses to win a tax shelter case.

The case centred on the so-called Kersting tax shelter, named after Honolulu businessman Henry Kersting, which allowed airline pilots and their families to purchase stock in one of Kersting's companies. In exchange, the pilots received promissory notes, on which they would have to pay interest, but which allowed them to claim interest deductions on their tax returns.

In the early 1980s, the IRS ruled that the Kersting tax shelter was illegal and began pursuing a number of investors who had used the scheme. Many of these eventually settled with the IRS.

However, according to Colorado Attorney Declan J. O’Donnell, who represented 100 of the 500 taxpayers who settled with the IRS, three witnesses were effectively bribed with cash, pre-paid expenses, tax settlements below par, and ten years of added tax benefits so that they would testify against six pilots.

In an opinion delivered earlier this month, the United States Tax Court stated that all of the settled cases in the Kersting Tax Shelter program should receive 64% of their monies back as a sanction.

It is perhaps the first time that such a judgment has been made against the federal tax collector, certainly for such a substantial amount of money.

"Fraud on the court is rare and has only occurred a few times in our country’s history," Mr O'Donnell observed in a statement.

"This particular ruling is the only time the IRS has ever been adjudicated with a money judgment against them. All others were either sanctioned or the cases were retried," he added.

Mr. O’Donnell believes this penalty judgment against the IRS is unique, perhaps the only large money judgment against any national taxing authority ever. His clients and the settled group will receive an estimated $56 million from the IRS in due course.

The IRS has the right to appeal the decision, but Mr O'Donnell stated that such an eventuality is remote given that interest is continuing to accrue, and that the agency cannot appeal against liability in the case.

Sheriff Kolender Denies Rumors of Appointing Bill Gore After Election

Sheriff William Kolender denies rumors relating to allegations in which many have asserted that he is planning on running for reelection only to shortly thereafter have his Assistant Undersheriff Bill Gore appointed as the new Sheriff by the Board of Supervisors. Many argue that this usurp the election process.

Insiders say that Kolender is battling Alzheimer's, and is not medically fit to serve another term.Other rumors include the fact that David Bejarano left his position with the Federal Marshal's Office intending on seeking election as San Diego Sheriff. He was to work as the Chief of Investigations under Bonnie Dumanis with the San Diego District Attorney's Office. Insiders say that Dumanis told Bejarano the offer was only on the table if he agreed not to run against Kolender.

Many political strategists do not feel that Bill Gore, former San Diego Director of the FBI, could win an election against Bejarano. Insiders insist that Kolender will step down after about six months of his reelection and the San Diego County Board of Supervisors are said to accept Kolender's recommendation of appointing Gore. This does appear to undermine the election process. To read U.T. articles, click Kolender and Bejarano.

Police Chief William Lansdowne Continues to Mislead and Fail San Diego

More and more leaks from within the San Diego Police Department indicate a chief who is more concerned with cover up then protecting the community. In addition to his infamous underreporting of crime, insiders recently have exposed some more of his corrupt practices.

Sgt. Martha Sainz attacked a fellow police officer last year. To read a Union Tribune article exposing the incident, click here. Another recent article from the Union Tribune stated that Sgt. Sainz would be terminated from employment. For details click here.

Now insiders from SDPD have broken the code of silence and revealed that Lansdowne ordered Sgt. Sainz to be reinstated, continue as a Sergeant, and receive back pay for her lost time. Insiders insist this is yet another glimpse at the corrupt and deceptive practices of William Lansdowne. Some insiders went so far as to accuse Lansdowne of ordering departmental staff not to appear to the civil service hearing which would automatically cause all charges against Sainz to be dismissed thus she would be eligible to be reinstated back to her position as a police sergeant. Others allege the department botched the investigation which forced the department to retract their position.

Officers are said to be outraged! They cannot believe the actions of Lansdowne and are furious. Initially, Sainz was only taken out of the field and assigned to another position pending investigation after the story was leaked to the San Diego Union Tribune. Additionally, the victim of the assault from Sainz is now on the list to become a detective which may have pressured her to rethink per position on seeking prosecution against Sainz. San Diego Police Officers are becoming so outraged at Lansdowne's failed leadership, that they are now hosting websites exposing his failures. Here is a list of these websites:

http://www.educatesanders.org
http://www.sdblue.com/
http://www.supportsdcops.com/

San Diego Police Union Begins Airing Controversial Commercial

The San Diego Police Officers Association has recently began airing a commercial which has drawn much criticism. This is just another sign of the mounting frustration within the police rank and file due to Chief William Lansdowne's failed leadership. Lansdowne will continue to blame the city budget, however, that is just a small portion of what the San Diego Police Officers have been tolerating.

San Diego Lawyer Sues After Man Denied a Mother's Day Bag

From time to time, I will write about what I consider to be abusive or ridiculous lawsuits. In one recent article, I wrote about a lawyer who sued the internet dating site eHarmony because they would not let him register until his divorce was final. I've also written articles about attorneys file predatory lawsuits under the Americans with Disabilities Act. But one of my personal favorites is a lawsuit filed by a man who didn't a gift bag at baseball game on Mother's Day last year.

According to a story on Channel 10 News, San Diego attorney Alfred Rava filed a lawsuit against the Los Angeles Angels of Anaheim for sex and age discrimination. Rava's client was apparently upset when he was denied a tote bag on Mother's Day at an Angels game in 2005. The suit was brought under a California law called The Unruh Act which prevents businesses engaging in arbitrary discrimination.

Attorney Rava has an interesting history of filing other ridiculous lawsuits. He has previously sued a number of local bars that sponsor a "ladies night", alleging that the practice constitutes unlawful sex discrimination. He has also apparently sued the San Diego Padres and the Los Angeles Dodgers over gift promotions. My hope is that someday, the California State Bar will catch up with Mr. Rava in the same way it has done with other lawyers who have a history of filing abusive or ridiculous lawsuits in California.

About the Author: Carl H. Starrett II has been a licensed attorney since 1993 and is a member in good standing with the California State Bar and the San Diego County Bar Association. Mr. Starrett practices in the areas of bankruptcy, business litigation, construction, corporate planning and debt collection.

5 Deadly Mistakes When Starting a Business

By Jessica Seid, CNNMoney.com staff writer
May 8, 2006: 1:14 PM EDT

NEW YORK (CNNMoney.com) - For many people, starting their own business is a dream come true. But too many entrepreneurs see their dreams fall apart - their firms fail because of common pitfalls that could have been avoided.

One-third of small businesses fail in the first two years, according to the Small Business Administration, and a little more than half fail within the first five years.

1. Too little cash. "The biggest issue that most entrepreneurs have is money - they're not properly capitalized," says Douglas Long, owner of a management consulting firm that advises entrepreneurs and aspiring entrepreneurs. He recommends his clients have approximately three times what they think they'll need starting out, largely to protect them from any downturns.

Steve Hockett learned that lesson the hard way when he set out to open his own business.

"A few years ago, I was working at a bank and it wasn't a good fit, I was bored and I wanted to become an entrepreneur," says Hockett. Without a business idea of his own, Hockett decided to become a franchisee. Although he picked a very successful franchise, Hockett admits, "I was undercapitalized, it took too long for the business to build and my cash ran out." Forced to abandon the business after only a little more than two years, Hockett says he was "devastated."

"The real thing I missed was anticipating my cash needs and being able to weather the first year," says Hockett, who has since become a successful franchise consultant. "One of the hardest things I've ever done was to make the decision to pull the plug on a dream."

2. Thinking small. You may be competing for customers against larger companies with more resources. But you don't have to show it.

Harprit Singh founded Intellicomm Inc., a communications services firm, in 1994 when he was a second-year MBA student with just $100 in startup capital.

"A few years ago, my colleague and I drove hundreds of miles to give a presentation on our service to one of the leading global insurers," said Singh, president and CEO of the Philadelphia-based company. "I could clearly see the excitement in our service quickly dwindle in the packed conference room when we mentioned that we are a small business with limited resources. From that day on, I vowed never to let our size hold us back."

Singh began to focus on the advantages he could offer as a small firm in the telecom industry, such as greater expertise and speed of execution. Intellicom now has more than 4,500 customers in 45 countries.

Remember, you're not small, you are boutique. You're not tiny, you are personalized.

3. Skimping on tech. Sure, buying gadgets costs money. But giving your employees laptops, Treos, BlackBerries and wireless access allows them to do more with less. In addition, the latest technology will help you and your employees respond promptly to customers, no matter where you are or what you are doing.

Ironically, it's often easier for a small company to adopt and deploy new technologies, vs. big companies that may be wedded to legacy systems and cumbersome, outdated technology. Your small size can be a plus, letting you be nimble and swift.

4. Underestimating the importance of sales. For small-business owners starting out, most of the attention should go to sales and revenues, Singh says. If sales grow, expenses will take care of themselves.

And no matter how small, every company needs a dedicated sales pro to make sure business is constantly rolling in the door.

If you are your own salesperson, Long suggests practicing on friends and family to hone your skills. "You could have the best idea in the world, but if you can't sell it, you won't be successful."

5. Losing focus. Every business should have a vision of what they will be when they grow up. And the more focused the vision, the greater the chances that the business will realize its goal. Further, the vision should to be translated into specific execution tasks to achieve desired results.

Before embarking on your business, Hockett suggests carefully laying out all the attributes of your company and what you'll need do to make each aspect of the business succeed.

Had he created a detailed plan for his franchise, "I would have waited longer until I was in a better cash position to start," Hockett said. "But I was impatient. I made a decision based on emotion rather than fact."

Patently-O: Patent Law Blog: Blogger Defamation Litigation

Warren Kremer Paino v. Dunston

(D. Maine)

There is an interesting controversy brewing about a blogger (Dunston) who has been sued for defamation and copyright violation by Maine’s tourism advertising firm (Warren Kremer). Dunston reposted (and derided) one of Warren Kremer’s recent ads that mistakenly included the number to a phone-sex hotline. The defamation claim is partially based on Dunston’s accusation that the ad firm is “pissing away” Maine’s tourism dollars.

Blogger Ron Coleman is one of the attorneys representing Dunston.

Links:

• Dunston’s website with the details
• Evan Brown’s defamation analysis
• The complaint
• EFF’s FAQ on Internet Defamation Law

Author Stands Up to Police Corruption and Inspires Others

(Syndicated News) When faced with workplace corruption, many people look the other way for fear of retribution, especially when the problems are in the police department. Now readers can learn first hand the exciting story of how one police officer stood up to corruption and inspired others.

"Since I was a young child I had a dream of being a police officer,"” says Kevin LaChapelle, author of "“Please God, Don't Let My Badge Tarnish"” (iUniverse, 2006). "“When I took the oath to be a police officer I was serious about protecting and serving the citizens."”

LaChapelle goes from loving his job to finding shocking discoveries of corruption at the El Cajon Police Department, in El Cajon, Calif., where he worked. He shares his struggle to keep his badge untarnished while resisting the status quo and callousness others succumb to. He also shares his experiences of helping others.

"“While exposing the culture of corruption within the police department,"” explains LaChapelle, “"I began to mentor young people out of gangs. I'’ve helped many people turn their lives around and become successful adults."

In addition, he ran for a board member position for one of the largest local school districts, which had a reputation of financial corruption. He not only won the election in a landslide victory, he was also instrumental in exposing the financial corruption, which led to a total overhaul of the top level district management.

Standing up to these problems gave LaChapelle the idea to focus on empowering communities to expose fraud and corruption. In 1999 he started the Special Investigations Agency (SIA), which is made up of volunteer law enforcement officers, attorneys, and other professionals. The agency has a proven track record of successfully exposing corruption across the country.

"I believe that God has a plan for each of us,"” adds LaChapelle. "The next step in my plan is to inspire others to do the right thing. That'’s why I wrote this book, to give people the strength to stand up for what they believe in."

Mr. President, I'm Going to Mexico

David M. Bresnahan
April 1, 2006
NewsWithViews.com

Dear President Bush:

I'm about to plan a little trip with my family and extended family, and I would like to ask you to assist me. I'm going to walk across the border from the U.S. into Mexico, and I need to make a few arrangements. I know you can help with this.

I plan to skip all the legal stuff like visas, passports, immigration quotas and laws. I'm sure they handle those things the same way you do here.

So, would you mind telling your buddy, President Vicente Fox, that I'm on my way over? Please let him know that I will be expecting the following:

1. Free medical care for my entire family.

2. English-speaking government bureaucrats for all services I might need, whether I use them or not.

3. All government forms need to be printed in English.

4. I want my kids to be taught by English-speaking teachers.

5. Schools need to include classes on American culture and history.

6. I want my kids to see the American flag flying on the top of the flag pole at their school with the Mexican flag flying lower down.

7. Please plan to feed my kids at school for both breakfast and lunch.

8. I will need a local Mexican driver's license so I can get easy access to government services.

9. I do not plan to have any car insurance, and I won't make any effort to learn local traffic laws.

10. In case one of the Mexican police officers does not get the memo from Pres. Fox to leave me alone, please be sure that all police officers speak English.

11. I plan to fly the U.S. flag from my house top, put flag decals on my car, and have a gigantic celebration on July 4th. I do not want any complaints or negative comments from the locals.

12. I would also like to have a nice job without paying any taxes, and don’t enforce any labor laws or tax laws.

13. Please tell all the people in the country to be extremely nice and never say a critical word about me, or about the strain I might place on the economy.

I know this is an easy request because you already do all these things for all the people who come to the U.S. from Mexico. I am sure that Pres. Fox won't mind returning the favor if you ask him nicely.

However, if he gives you any trouble, just invite him to go quail hunting with your V.P.

Thank you so much for your kind help.

Sincerely,
David M. Bresnahan

© 2006 David M. Bresnahan - All Rights Reserved
________________________________________

David M. Bresnahan has over 30 years of experience as an award-winning journalist, broadcaster, radio station owner, talk show host, and business owner. David has been a prominent writer for many Internet newspapers.
Web Site www.ThatPRGuy.com
E-Mail: nwv@Bresnahan.org

On Being an American

"In the first place, we should insist that if the immigrant who comes here in good faith becomes an American and assimilates himself to us, he shall be treated on an exact equality with everyone else, for it is an outrage to discriminate against any such man because of creed, or birthplace, or origin. But this is predicated upon the person's becoming in every facet an American, and nothing but an American...There can be no divided allegiance here. Any man who says he is an American, but something else also, isn't an American at all. We have room for but one flag, the American flag... We have room for but one language here, and that is the English language... and we have room for but one sole loyalty and that is a loyalty to the American people." -- Theodore Roosevelt (1907)