Tax Fraud Charges Admitted By North Carolina Pizza Store Owners

July 30, 2014 — The IRS whistleblower office was established in The Tax Relief and Health Care Act of 2006 to encourage tipsters with information about tax fraud to notify the government. The Act allows informants to receive a percentage of 15 to 30 percent of the funds the IRS recovers based on a whistleblower’s unique information. To receive compensation concerning a private individual’s IRS violations, the tax evader’s gross income must top $200,000 for every taxable year at issue and the government’s recovery must add up to more than $2 million. For rewards based on information for a corporation’s wrongdoing, however, no minimum recovery is required.

Father And Son Team Skimmed More Than $1 Million In Cash From Pizza Restaurant Operation

The father and son owners of a chain of North Carolina pizza stores have pleaded guilty to willfully filing false tax returns.  Thair Alwan and his son Saill Fadhil, who run the I Love NY Pizza restaurants near Raleigh, North Carolina, skimmed approximately $1.34 million from the pizza stores’ receipts in the 2008 and 2009 tax years. This was almost all of the company’s cash receipts.
Pizza store employees estimated that at least 40 percent of customers paid in cash. Yet in 2008, cash deposits to the corporate bank account were just 1.3 percent of total deposits. In 2009, that number was 2.3 percent.
The pair used the cash taken from their business for personal expenditures or they deposited the money into their personal bank accounts. From 2007 to 2010, Alwan’s personal bank account received 73 currency deposits, 50 of which were at least $9000.  By making sure that no deposits exceeded $10,000, the men were able to escape filing Currency Transaction Reports.
In addition to skimming the profits, the two men filed false federal income tax returns with the government. By failing to report flow-through income from the pizza stores, Alwan and Fadhil were able to make substantial tax underpayments.
The pizza store owners could be ordered to pay a maximum fine of $250,000 per count and to serve as long as three years in prison. Both men have consented to pay restitution to the IRS.

Insider Employees Notify IRS About Employers’ Tax Fraud

When company owners consistently skim cash payments from deposits into corporate accounts, insider employees are bound to notice. Before stepping forward to notify the IRS, whistleblowers should make certain that they understand how the process works. While Waters & Kraus is not handling this particular case, we are handling similar cases. If you have similar claims against a different company or individuals, contact us or call our attorneys at 855.784.0268. The IRS tax fraud lawyers with Waters & Kraus, like Gary Paul and Louisa Kirakosian in the firm’s California office, provide government collaborators with the legal counsel they deserve.
Contact us by email or call our whistleblower lawyers at 855.784.0268 to learn how we can protect your interests in reporting IRS tax fraud matters.

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