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Tax fraud and evasion question

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costandino

Junior Member
What is the name of your state? Fl.

I would like to know about the following questions.

A couple go thru a rather acrimonious divorce and some questionable conduct occurs regarding their division of property. Party A is awarded all marital assets and all marital debts. The major marital assets are a business and a property that the business operates upon.

Party A defaults on the mtg debt obligations and enters the foreclosure process soon after the divorce is finalized.

Two family members of party A purchase the property awarded to party A thru the foreclosure process soon after the divorce is finalized to protect the asset from creditors. The family members B and C now own the property purchased thru the foreclosure process and a good portion of the prior outstanding mortgage debts are eliminated against said property. The debts are still owed by party A to those creditors.

Party A has a ongoing and successful business operating on the mentioned property that is owned and registered in her name only. S/he is the sole proprietor and is registered with the state as such.

:eek:Parties B and C operate that business on the property for the next 7-8 years.

There is no business rental property lease between party A and parties B and C.

Parties B and C co-own the property and they also operate full time the business that is legally owned by party A. As such, they file the tax returns and pay the annual federal income taxes on the business as if they actually own the business and the property both.

Party A claims that s/he only receives 1000.00 per month income from the business.

Does party A have to file the income tax returns on the business income?

Is it legal for parties B and C to claim the business income and expenses on their tax returns?

Does the lack of a lease affect the tax filing claims/obligations for income, and expenses for A, B, and C ?

What if Party B and C are trying to hide party A's income from the defaulted mtg creditors.

Did A, B, and C, commit tax evasion and or tax fraud?

thanx.....C.What is the name of your state?
 
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costandino

Junior Member
A Business Law undergraduate student needs advice/answers. We are debating the point.

What is the basic rule regarding business ownership and tax filing? Can B and C file a return on business income that is not legally theirs? IE, they are not the owners of the business.

What legal affect does this have on A as far as the IRS is concerned? Does A have to claim and file on the income if legally registered owner of business? Thanx :)
 
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costandino

Junior Member
That is what I was trying to do here. Research. Seeking a bit of a second opinion so to speak. Sorry if my questions frustrated you. I understand that this is a rather complex set of questions with many parameters. It can be a bit of a challenge to actually know the correct answers. Too many years have past since I last read any tax code or B. law. A little rusty myself. I will pass on the responses. C. Any other takers? :)
 

LdiJ

Senior Member
That is what I was trying to do here. Research. Seeking a bit of a second opinion so to speak. Sorry if my questions frustrated you. I understand that this is a rather complex set of questions with many parameters. It can be a bit of a challenge to actually know the correct answers. Too many years have past since I last read any tax code or B. law. A little rusty myself. I will pass on the responses. C. Any other takers? :)
You are asking people who are here, volunteering to help the ordinary people deal with their tax issues, to do serious research to give you answers for your classes.

It doesn't work that way. I certainly will not waste my very valuable time researching your issues.

You have the same resources available to you that we do....do your own research and come up with your own answers.

However, I will give you a "hint"...research not only fraud from a potential tax standpoint, but also fraud from a potential divorce settlement standpoint.
 

costandino

Junior Member
This is in fact a serious question. I pose it as a hypothetical to aid another. That person should have paid better attention in B. Law class. As a non lawyer, my thoughts as to this issue carry little weight as it should. Perhaps the reality of these questions will carry more weight if answered by attorneys.

I would imagine that this type of conduct could be considered not only tax fraud, and divorce fraud, but also a potential RICO violation.

As I stated, my schooling is a bit long of tooth. Been 30+ years since I studied B.Law. I was paying attention. Laws change over time. This is not a moot question. Thanx for tip. C. :)
 

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