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PLSCPAs, Park, Lee & Seo certified public accountants, San Diego CPA firm California

"PLScpas, The company for all your TAX & Financial Needs"

Since the founding of our firm in 2000, our goal has been to provide personal and superior services to business and professional practice owners in a responsive, smart and cost-effective manner. Our ability to fully understand and cater to your needs, as well as those of your business, is what makes our firm an ideal financial partner.

news and events


Monday, May 16th, 2011


En PARK, LEE & SEO, Contadores Públicos Certificados (PLS, CPA), nuestro objetivo es prestar servicios personalizados a su negocio, para satisfacer cualquier necesidad financiera, Auditoría y Tributación necesarios para cubrir ya sea como: una empresa o con asuntos personales. Estos servicios son proporcionados por Contadores Públicos, Auditores y consultores que están altamente cualificados.

PLS CPAs les ofrece una variedad de servicios, tales como:

-Elaboración de libros de contabilidad (mensual, trimestra, semestral, o anual).

New Office: 4725 Mercury St. #210 San Diego, CA 92111, Tel. 858 565 6814

Saturday, April 30th, 2011

We have moved.

Developments in corporate minute-taking best practices

Thursday, February 24th, 2011

Proper board meeting minute taking has recently increased in importance as a result of a number of court decisions. Bankers and other businessmen doing business in the corporate form should carefully consider the impact of cases such as In re Walt Disney Company Litigation (Del. Ch. 2004).

In many states, minutes are considered to be prima facie (i.e., presumptive) evidence of what actions an entity actually took. Some courts have also taken the position that other evidence (such as witnesses testifying that serious debate did actually occur in a meeting, even when the minutes don’t record such debate) won’t be allowed unless minutes are clearly incomplete or ambiguous.

In re Walt Disney Company Litigation (Del. Ch. 2004) is a case in point and is particularly instructive with respect to the appropriate level of detail in board minutes. The Disney plaintiffs charged that the board of directors of Disney violated their duty of good faith when considering the CEO’s hiring of a new president. When Disney’s board met to discuss the hiring, the minutes did not review or approve: (i) any presentations or reports regarding the terms of the draft hiring agreement, (ii) any questions raised by any board members, and (iii) the employment agreement being authorized. The Disney board ultimately approved the hiring. The total space in the minutes dedicated to the hiring was less than one and one half pages.

Some Disney witnesses told the court that board members did, in fact, give the hiring serious thought and deliberation at the meeting. But when Disney filed a motion to dismiss the plaintiffs’ case, the judge rejected the motion and sent the case to trial – partly on the basis that the minutes (both as to content and length) indicated a lack of serious deliberation by board members.

In the banking context, the importance of internal bank board minutes was underlined recently. The FDIC filed a lawsuit at the end of 2010 against a large law firm that had been hired to defend the board of directors of a bank that ultimately failed. Copies of board minutes are alleged to be among the internal bank documents received by the law firm shortly before the bank failed.

When the bank failed, the firm is alleged to have transmitted the documents to individual board members in what appears to have been an attempt to circumvent an FDIC practice of not allowing directors of a failed bank access – outside of the normal process of discovery in pending lawsuits – to internal bank documents relevant to their defense against claims by the FDIC as a receiver for the bank. The law firm has denied any wrongdoing.

In response to the FDIC suit, a public letter to the Chairman of the FDIC dated December 22, 2010, was issued by the American Association of Bank Directors. The letter called on the FDIC to routinely permit bank directors access to internal bank documents such as board minutes when the directors are in the process of responding to FDIC inquiries prior to the institution of a formal suit.

Since overly-detailed minutes can be used as a weapon against a bank or other business in a lawsuit, it may be tempting to write extremely brief minutes (“the Board debated resolution X, and X was approved”). But this approach can lead to aproblem- courts may assume that since debate or careful deliberation was not explained, it did not happen. That conclusion could be very harmful to an entity defending against, for example, a charge that directors did not exercise due care in making a decision.

Ultimately, while minutes can be used to show a lack of deliberation or due care, they can also be used to show that directors did meet their various required responsibilities and duties. The following is a list of some practices that have become increasingly common for entities trying to follow minute-taking best practices. In reading the below, note that above allminutes must be truthful and accurate. Minutes cannot compensate for inappropriate or deficient board behavior, and should in no circumstances be misleading or overstate director diligence.

(1) Minutes as Summaries. Minutes are often a summary, not a transcript. Well-drafted minutes often reflect the general substance and tenor of debate, time spent at the meeting in total and on particular issues, a list of materials given to the board, a summary of the findings of any non-board-member presenters (such as officers or outside consultants), the complete text of approved resolutions, and whether board members received materials before the meeting.

(2) Recording of Individual Director Votes and Quotation of Directors. Some entities choose to record individual directors’ votes. At least one financial institution regulator now requires individual directors’ votes to be recorded. When their individual votes are recorded, directors may, with an eye toward future lawsuits, cast defensive votes. And from the perspective of the entity, a list of dissenting directors may become a plaintiff witness list. For these reasons, unless law or regulation requires it, many commentators recommend against recording individual directors’ votes.

Whether or not an entity chooses to (or is required to) record individual director votes, quoting directors during debate is a separate issue. Although debate (including both positive and negative arguments for a proposed action) can be generally summarized, many commentators have concluded it is not usually necessary to attribute specific quotes to specific directors.

It is not unusual to identify officers, consultants, etc. that are making reports or presentations. As to directors, identifying specific speakers could, in some circumstances, be helpful- specific directors may be able to later establish the seriousness and depth of their individual deliberations. That practice could also, in other circumstances, be harmful- a director’s specific words could be used in a lawsuit to attack such director’s later change of opinion, or simply be quoted or used out of context. Other, more silent directors may be challenged for individually not making comments or posing questions.

A third possibility is to not identify individual board members during debate, unless a director specifically requests to have a particular comment, question, position, etc. identified to them in the record (the request itself should also be noted in the minutes). This approach allows individual directors to leave a “paper trail” of their specific actions, while preserving a generally quote-free atmosphere of debate.

(3) Length of Minutes. The length of the minutes as to any specific item should generally reflect the relative importance of that item. The length of the minutes as a whole should bear a direct relationship to the importance of the meeting agenda. There should not be any fixed “one paragraph” or “one page” rule per issue. As stated previously, minutes must truthfully reflect what actually occurs at a meeting – the above assumes that directors spend time and divide debate in a manner proportional to the relative importance of various issues.

(4) Meeting Notes and Minute Drafts. Notes of a board secretary (as well as non-final drafts of minutes and director notes) are discoverable by plaintiffs in lawsuits to the extent they do not address legally privileged matters (i.e., the court will permit plaintiffs to see such notes and drafts if they are requested).

Meeting notes and drafts are often more detailed than the minutes actually produced. After counsel and the board of directors approve final minutes, a corporate should carefully consider whether it is necessary to retain secretary notes, non-final minute drafts, and directors’ notes from the board meeting. Note that there are many situations (for example, during lawsuits or government investigations) when discarding any corporate materials should only be done on the advice of counsel.

(5) Prompt Review and Approval of Minutes. Minutes should be reviewed and approved promptly by the board. Excessive editing of draft minutes by management before their presentation to the board may be problematic, as such editing could suggest inappropriate after-the-fact changes.

(6) Legally Privileged Matters. Minutes should clearly state which portions of the board discussion are attorney-client privileged, and should confirm (if accurate) that the privileged discussion was conducted in the presence of a lawyer.

Alternately, minutes can state that a privileged discussion between the board and its lawyer occurred, and that separate minutes were taken for the discussion. Clearly identifying privilege in the minutes will make it much easier to later distinguish between privileged and non-privileged discussions.

(7) Transcripts and A/V Recordings. Entities should carefully consider whether they will retain verbatim transcripts or audio/visual tapes of board meetings. Temporarily-stored electronic recordings as an aid to the preparation of the minutes are a common practice. It is likely, however, that in a lawsuit any such existing materials are discoverable. The use of these types of records as permanent meeting records can also discourage the free and honest flow of debate among board members. Note again that there are many situations (for example, during lawsuits or government investigations) when discarding any corporate materials should only be done on the advice of counsel.

Two Ladies

Friday, February 11th, 2011

Bully’s East

Wednesday, January 26th, 2011

Excel Nerd?

Wednesday, January 26th, 2011

Check this out.


Monday, January 17th, 2011

PLS CPAs are glad to announce the joint endeavour with KCCW in the area of Trnsfer Pricing & Chinese client audit projects.  The following is provided by Jerry Lin of KCCW.

At KCCW we understand that an adequate transfer pricing analysis helps clients not only in fulfilling legal dispositions but in optimizing their operational procedures, creating more efficient and profitable corporate structures according to the proper appointment of functions, assets and risks from a multi-national trading perspective.

Cross region resources and local knowledge enable our Transfer Pricing Practice in USA and Pacific Rim to offer companies with international presence and transactions a consistent and sound approach in the establishment of the transfer pricing policies for their groups of companies.
We can help your company fulfill formal transfer pricing requirements by preparing consistent transfer pricing documentation across borders. Also detect eventualities in transfer pricing and respond in a timely manner to the possible amendment of local or regional policies.
The use of transfer pricing tax strategies has recently attracted a high level of international attention, due in part to the rapid rise of multinational trade, the opening of several significant developing economies and transfer pricing’s increased impact on corporate income taxation. As multinational corporations evolve into true global enterprises compliance with the differing requirements of multiple overlapping tax jurisdictions has become a complicated and expensive task.

In response to these factors, US tax authorities and their counterparts around the world have become more aggressive in the transfer pricing arena, introducing stricter penalties, new documentation requirements, increased information exchange, improved audit staff training and increased audit and inspection activity and specialization.
This intense scrutiny implies significant risks for the unwary and the unprepared, particularly in a complex field such as transfer pricing where each transaction must be analyzed under its own unique facts and circumstances.

Our Team

Jerry Lin,

Chief Consultant of Transfer Pricing Division, KCCW CPAs

Adjunct Professor, California State University Los Angeles

Prof. Lin has engaged in numerous Transfer Pricing related cases which including documentation as well as planning and research, and had provided satisfactory performances to the Service, including in-depth study and analysis with Economists and auditing managers.

Coverage and depth can better define what Prof. Lin will bring to the table. An Industrial Engineering M.S. from University of Arizona who had been through training for precision and accuracy, worked as an executive from manufacturing industry to international trading business, thus has gained rare composition of skills and disciplines. In addition, he’s also brought a full range of knowledge on cross-border transactions during his tenure with public service as a director of regional governmental Economic Development Authority to help facilitating investment and trading relation between American and Chinese businesses and individuals in State of Arizona.

Our professionals began to provide service at the dawn of the new century when Tax authorities worldwide are imposing new and stricter transfer-pricing documentation requirements on companies—and failure to comply can result in significant penalties. As multinational corporations continue to expand on a global basis, cross-border transactions (e.g., the sale of goods, the provision of services, the lending of funds, the licensing of intellectual property, etc.) between affiliates also continue to grow in frequency and complexity. As a result, these companies are increasingly becoming subject to transfer pricing requirements in many jurisdictions resulting in an expansion of the obligations being imposed on the these taxpayers by their governments.

IRS had made several revisions on transfer pricing regulation in 2003 through 2006. Intensity of audit has been on the rising since. Our team has successfully prepared required documentations, and help defended our clients when facing IRS inquiries in many cases.

Current Client List



Annual Sales

(in Million$)

Parent Location

1 Computer components 100 Taiwan
2 Computer / TV Monitors 150 Hong Kong
3 Outdoors Furniture 100 BVI
4 Computer system and components 95 Hong Kong
5 Computer system and components 200 Taiwan
6 Computer system and components 110 Taiwan
7 Medical equipment and parts 20 Taiwan
8 Medical equipment and parts 50 China
9 Auto parts 75 Taiwan
10 Computer peripherals 50 Taiwan
11 Computer peripherals 65 Japan
12 Computer peripherals 130 Taiwan
13 Paper products 45 Indonesia
14 Food products 50 Korea

The Good, the Bad, and the Ugly?

Saturday, January 1st, 2011

Park, Lee & Seo

Speech by SEC Chairman:

Wednesday, December 22nd, 2010

“The Important Role You Play”


Chairman Mary L. Schapiro

U.S. Securities and Exchange Commission

AICPA Annual Conference
Washington, D.C.
December 6, 2010

Good morning and thank you, Chris, [Holmes, Chairman of AICPA SEC Relations Committee] for that kind introduction.

It’s a pleasure to be here today because your work is so critical to the effective functioning of our capital markets. It is through your efforts that investors receive the timely, reliable and comparable information needed to make informed investment decisions. And it is through the decisions of fully-informed investors that our markets are able to efficiently allocate the capital that fuels innovation and growth.

Working to Restore Confidence

Unfortunately, the scandals and crises of the last decade understandably have shaken the public’s trust in America’s capital markets.

For some time now, the SEC — and other regulators — have been working to restore that trust. But this goal is not one that can be achieved by regulators alone — the accounting profession has an important role, as well.

Custody Controls

In fact, one of the first rules we adopted after I became Chairman was one that recognized the importance of your profession to the functioning of our financial markets — a rule where we sought to leverage the knowledge, judgment and expertise of certified public accountants.

It was early 2009, and we wanted to find a way to provide greater assurance to investors that their accounts actually held the money that their investment advisers said they held.

We enacted rules that call upon independent public accountants to serve as a “second set of eyes” in support of our investment adviser examination teams. The rules mandate annual surprise examinations of adviser-held accounts by independent public accountants.

In addition, when an adviser or an affiliate serves as custodian of client assets, the adviser must obtain a written report — prepared by an accountant that is registered with the PCAOB — to assure appropriate internal controls are in place to protect client assets. As a result of that rule, we believe it will be more difficult for an adviser who has misused investor assets to get away with his deception.

Currently, we are contemplating ways to further leverage the profession by updating the custody rule for broker-dealers, as well. That rule requires auditors to provide assurance that the numbers are accurate, as well as controls and compliance. But, the rule — Rule 17a-5 — was first implemented nearly 30 years ago. And so, among other things:

  • We are considering strengthening compliance and controls over the Commission’s foundational financial responsibility and customer protection requirements;
  • We are considering preparing a 21st century foundation on which the PCAOB can implement its new oversight authority over broker-dealer audits;
  • We are considering eliminating regulatory overlap for broker-dealers that are also related custodians of a registered investment adviser; and
  • We are considering enhancing oversight of broker-dealer custody by providing new information and tools to regulatory examiners.

Once more, our actions will underscore your importance to the financial system.

SEC’s Investor Protection Efforts

Of course, custody rules have been far from our only concern, recently, and our efforts range well beyond areas that directly touch the accounting profession. I think it’s fair to say that our investor protection efforts have been in overdrive for the past two years. Since I arrived:

  • We revitalized our enforcement and examination units so that those who may be tempted to harm investors have a real fear of being caught.
  • We adopted comprehensive rules to strengthen the resiliency of money market funds, and rules that give investors better information regarding the qualifications of their advisers and the fees they are charged.
  • We began a detailed review of the structure of today’s high-speed, computer-driven markets — a review that positioned us to respond quickly to the events of May 6th with circuit breakers and other measures intended to reduce the chance of another similar event.


  • More recently we have stepped up efforts to increase transparency in areas that may breed systemic risk, like the asset-backed securities market and private funds;
  • And — since the passage of the Dodd-Frank Act — we have begun to create the contours of a new regulatory regime around over-the-counter derivatives.

These are just a few highlights of a robust rule-making agenda that is the cornerstone of our efforts to restore faith in our financial markets.

The Role of the Accounting Profession

But rulemaking and our own reforms are not enough to achieve that goal. I believe effective coordination between regulators and accounting professionals must be an important part of the effort as well.

In fact, in our quest to restore confidence, there is one barrier in particular, that we cannot dismantle without your help — one barrier against which you have to lead the fight. And, that is the investor skepticism that springs from a decade that they perceive as marked by restatements, e misleading “window dressing” in quarterly reports and “off balance sheet” exposures that prevent them from making fully informed investment decisions.

The fact is that an essential touchstone of functioning capital markets is an investor’s ability to get an unvarnished assessment of a company’s financial condition.

That is why the foundation of successful markets is accurate and transparent financial reporting — and honest verification of that reporting by an independent, objective party. And the Commission’s role in promoting uniform principles for these vital tasks is an important chapter in our history.

While accurate and transparent reporting begins with detailed reporting from every corner of an enterprise, which generates numbers that actually add up at the bottom line, it doesn’t end there.

That’s because accurate reporting is also about timely, full and fair disclosure of those numbers. It’s about getting to numbers that mean the same thing, from company to company and from country to country. And, it’s about pushing back to assure yourself that investors can rely on those numbers.

I appreciate that you have a difficult job — translating an increasingly complex and global financial world into something that can be understood not only by market professionals and regulators, but by individuals with less investment experience or sophisticated financial training.

And, I recognize your responsibilities are only growing. As we all appreciate, today’s capital markets are far more complex than those navigated by the accountants who formed the AICPA’s predecessor organization more than 120 years ago.

Yet, your profession’s fundamental role remains as important as ever.

As spelled out in your code of conduct, your obligation is to discharge your duties “with integrity, objectivity, due professional care and a genuine interest in service to the public.”

It is why we see your profession as an important line of defense — an ally in the effort to protect our markets and the quest to restore investor confidence.

The Need to Show Leadership and Uphold Public Trust

Of course, for most investors, the most visible front in the SEC’s fight is our enforcement efforts.

And, one of my top priorities on returning to the SEC was restructuring our enforcement unit and streamlining our enforcement procedures.

Today, our enforcement teams continue to pursue cases stemming from actions that contributed to the financial crisis of the past several years. These have included successful actions against Countrywide, American Home Mortgage, New Century and Citigroup.

In these cases, public companies failed to disclose millions of dollars in losses and billions of dollars in exposure to subprime mortgages. These material facts went unidentified or were — in some cases — actively concealed by the preparers and executives charged with making them public. Their failures not only caused immense economic damage to shareholders, but to the financial market and the economy as a whole.

We continue to demonstrate our willingness to prosecute those who betray the trust of the public markets. But bringing actions after the fact is no substitute for full and honest disclosure at the outset. Enforcement actions are cold comfort for investors who lost their savings after relying on misrepresentations or half-truths.

In too many investigations, we have been struck by the magnitude of the misrepresentations we discovered. Even when these investigations lead to high-profile charges against CEOs, CFOs and controllers — as in the types of cases I mentioned — they can also raise troubling questions about the many others involved in preparing and auditing the filings and reports.

We wonder if questions could have been asked early on by preparers and auditors, or if warning flags were simply ignored. We wonder if the eventual losses to shareholders and investors were multiplied many times because material information was not made available in a timely fashion by people who should have been able to produce accurate disclosures.

Rather than SEC prosecution after the fact, shareholders should be able to rely on accurate accounting and effective auditing up front and transparent financial reporting.

I urge all of you to ask yourself critical questions when you sit down with the numbers.

Questions like:

“Could I be doing more to ensure that the information is accurate?”

“Are the results I am reporting an exercise in wishful thinking or a true portrait of actual results?

“Do I understand the company I am auditing well enough to recognize red flags and have I taken all appropriate steps to respond to them?

“Even if the numbers reported are accurate, do they convey a fair picture, or is there a need for additional disclosure?”

And, if these questions do not yield the answers you need, I urge you to have the courage to challenge those answers — a willingness to take your judgments about the quality of disclosures to the highest levels of management and to the audit committee.

That said, we appreciate that it is not always pleasant to report results that are not ideal. And we know this first hand.

Earlier this month, the SEC completed our Performance and Accountability Report — the equivalent of a company’s annual report — and posted it on-line. A GAO audit found that the financial statements and notes included in the report were presented fairly and in conformity with U.S. GAAP. But, we discovered two material weaknesses in internal controls over financial reporting.

While it’s good to know what the weaknesses are, they are in no way acceptable — and so we are already moving to address them. We will be migrating our core financial system to a Shared Service Provider designated by the Office of Management and Budget — one with proven ability to meet the high standards the American people deserve.

Just as we relied on our preparers and auditors, investors rely on you to find and identify weaknesses so that they can be addressed. Your honest assessments are what the accounting standards envision, what a good management team expects, and what investors and capital markets deserve.

Accounting without Borders

Of course, the challenge of restoring public confidence is complicated by the fact that today’s investors rely not only on accurate information about U.S.-based entities, but about entities across the globe as well.

Today, a Tucson-based investor, trading on the New York Stock Exchange, may be trying to analyze a German chemical company with subsidiaries in Thailand and Chile, and a Paris-based auditor. So, the SEC is working on several fronts to bring regulation in line with the more complex realities of today’s financial world — to bring needed cross-border consistency to accounting and auditing.

For instance, we are supporting the PCAOB in its efforts to remove obstacles that have kept it from carrying out its Congressionally-mandated responsibility to inspect non-U.S. firms registered with them.

I applaud the recent EU decision that allows the PCAOB to negotiate agreements with individual countries that will permit the PCAOB to perform its oversight role. And, I look forward to the final agreements with individual countries that will allow inspections to go forward.

In this, and in other important areas, we are now looking forward to a PCAOB that functions with a renewed energy and effectiveness in the months ahead.

For many months, two positions on the board were filled on an interim basis by members whose appointments had expired, and one seat remained vacant. This was largely the result of a constitutional challenge to the very existence of the board.

With the Supreme Court’s summer ruling, however, the SEC has been searching for a new chair and two new board members.

Ensuring that these positions are filled with individuals of integrity and spotless reputations and demonstrated commitment to the interests of investors and the public is a top priority.

We are now in the final stages of the selection process.

I want to be the first to say that, during a trying time, the board did an extraordinary job. But we are excited at the prospect of dedicated and highly-qualified members taking their seats, and a Board able to focus on their critical role without a legal challenge hanging over its head.

In addition to the PCAOB’s negotiations, there is another international issue of significant interest to the SEC and to the accounting profession.

In addition to international auditing responsibilities, we are focusing on accounting standards and convergence. Because, investors should be able to make accurate comparisons and judgments regardless of an entity’s line of business, ownership status or corporate domicile.

And so, the SEC continues to monitor the progress being made by the FASB and the IASB on the convergence of international accounting standards. As expected, the path towards convergence has proved steep and winding at times. But both Boards have responded to the challenges.

For example:

  • FASB and IASB launched intensified efforts to deliberate issues jointly in monthly meetings, which will allow Board members to discuss and resolve issues face-to-face.
  • They have increased efforts to work through unified project teams, which include members of both Boards.
  • And, both have committed to periodic public reports on the status of their efforts.

I believe these actions will continue to increase the effectiveness of the collaborative efforts by the Boards and I’m sure that [FASB Acting Chair] Leslie Seidman and [IASB Chair] Sir David Tweedie will have more to say on this subject when they join you tomorrow.

Convergence is a top priority for the SEC. But, as both Boards recognize, the resulting standards — in addition to being uniform — must be high-quality improvements over current standards.

Constituent review and comment are important parts of a process that will produce standards that investors need.

For example, they were a driving force behind the Boards’ decision to modify and reprioritize the standards being developed on their joint agenda. The resulting staggered schedule for issuing the Boards’ exposure drafts will allow for greater input by stakeholders. This will create an enhanced ability to consider whether the standards result in the consistent, high-quality, globally-accepted accounting solutions that we seek.

Hopefully, many of you have had a chance to read the progress report the SEC staff issued in October. As you will hear later, the staff has highlighted several preliminary observations based upon their work to date, including:

  • Observations on important implications related to different methods of potential incorporation;
  • The IASB funding model; and
  • Observations regarding the important role that could be played by the FASB if the Commission were to mandate IFRS for domestic companies.

I am pleased with the progress to date and remain optimistic about achieving a convergence that benefits investors in the U.S. and around the world. A significant portion of the work plan remains in progress, and the Commission looks forward to receiving continued periodic reports from the Staff and to marking progress in the year ahead.


Today, investors are trying to shake their skittishness. They are asking if everyone — from regulators to accountants — are doing the jobs they expect us to do. This is a fair question. And, because investor caution makes it harder for dynamic enterprises to raise the money they need to expand and grow, it’s important, that investors get the answers they need.

I believe the SEC is on track, doing the job that is expected of us — as a rule maker, as examiner, and as law enforcer. But, the importance of accounting professionals cannot be overstated, either.

It’s not just new rules and regulations that protect investors, it’s accurate, honest and complete accounting by men and women who, as Chief Justice Burger wrote in U.S. v. Arthur Young, demonstrate “complete fidelity to the public trust.”

Our markets depend on confident investors — and their confidence rests in large part in your hands.

I know that’s a great deal of responsibility. But, that’s the important role that you play.

The SEC and other agencies can increase the confidence investors bring to our financial markets.

But our efforts will succeed only if those investors believe the numbers that you write on the bottom line.

Thank you.

Wesley Snipes

Monday, December 20th, 2010

Snipes received the maximum one year sentence for each of his three misdemeanor convictions. Snipes claimed he was misled by his tax advisors and was arrogant enough to file claims for millions in refunds, even though he paid no tax on $35 million of income during the six-year period involved in the case.

On October 12, 2006, Wesley Snipes and Douglas P. Rosile were charged with one count of conspiring to defraud the United States under 18 U.S.C. § 371 and one count of knowingly making or aiding and abetting the making of a false and fraudulent claim for payment against the United States.  The conspiracy charge against Snipes included allegations that he filed a false amended return including a false tax refund claim of over US$4 million for the year 1996 and a false amended return including a false tax refund claim of over US$7.3 million for the year 1997.

The indictment said Snipes used accountants who already had a history of filing false returns to obtain refund payments for their clients.  The government also charged that Snipes sent three worthless, fictitious “bills of exchange” to the IRS in the amounts of $1,000,000 (on November 30, 2000), $12,000,000 (January 18, 2001), and $1,000,000 (September 10, 2002), with each accompanied by an IRS tax payment voucher coupon.

The Eleventh Circuit Court of Appeals issued a scathing 35 page decision, unanimously upholding his conviction and mocking some of his bizarre assertions. The court noted that Snipes used phony tax protester arguments not only for his personal taxes, but with respect to his movie production companies and stopped paying payroll taxes for his employees.

At various times, Sniped claimed he was a “foreign diplomat” and a “fiduciary of God”, and, therefore, not subject to U.S. taxes. The appeals court held that the failure to file tax returns and pay approximately $17 million in taxes supported the district court’s three-year sentence.

After the Court of Appeals affirmed his conviction, the trial court judge ordered Snipes to jail, stating that “The Defendant Snipes had a fair trial; he has had a full, fair, and thorough review of his conviction and sentence by the Court of Appeals; and he has had a full, fair, and thorough review of his present claims, during all of which he has remained at liberty. The time has come for the judgment to be enforced.”

Snipes is the most famous of a long list of tax protesters who learned the hard way that criminal tax violations inevitably lead to significant prison time, as well as financial ruin.

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