What Happened To Soong?, Where Are The Fines?

5 charged with preparing
false tax returns for client



Saturday, February 14, 2004

By Rick Daysog
rdaysog@starbulletin.com
A federal grand jury indicted the head of a local tax preparation service and several of its employees Thursday for submitting false federal tax returns for hundreds of clients between 1997 and 1999.

In a 148-count indictment, the secret panel charged that RB Tax Service owner Richard Basuel, his son Richard Basuel II and employees Dina Caleda, Rosalinda Tamayo and Vivian Soong prepared false tax returns and aided and abetted in the preparation of false tax returns.

The alleged scheme resulted in the filing of more than 900 false federal returns and more than $4 million in falsely claimed tax refunds, the indictment said.

The federal charges are in addition to several criminal actions in state Circuit Court involving the filing of false state income taxes by RB Tax Service and its employees.

Basuel previously served a six-month jail term after he was convicted in July 2001 of filing false tax returns by claiming Hawaii as a foreign country and overstating his clients' itemized deductions.

According to the federal indictment, Basuel and his employees advised their clients to report income they earned in Hawaii as if it were earned in a foreign country. This allowed clients to file for refunds of all of their federal tax withholdings.

RB owner Basuel is charged with 46 counts of preparing a false tax return and aiding and abetting the preparation of a false tax return, while his son Richard faces 21 counts. Soong was charged with 30 counts.

Caleda was charged with 26 counts, and Tamayo faces 24 counts.

If convicted, the defendants each face up to five years in prison and a fine of $250,000 on each count.







Jury finds tax
preparer guilty
His taking advantage of what
he thought was a loophole will
cost him more jail time


Friday, May 27, 2005

By Debra Barayuga
dbarayuga@starbulletin.com
A former tax preparer currently serving a 10-year term in state prison for filing fraudulent tax returns was convicted in U.S. District Court on Wednesday of similar charges involving federal tax returns.

A federal jury took about three hours to deliberate before finding Richard Basuel, 63, of RB Tax Service guilty as charged to conspiracy and 20 counts of aiding and abetting in the filing of fraudulent tax returns.

The jury also found Vivian Soong, who worked at RB, guilty of conspiracy and 12 counts of aiding and abetting in the preparation of fraudulent tax returns.

The two were among five individuals charged in a 148-count indictment in February 2004 that involved a scheme in which they falsely claimed $4 million in tax refunds for their clients for 1999. They claimed their Hawaii earnings should be exempt because it was "foreign earned income."

According to prosecutors, Basuel and tax preparers who worked for him began advising their clients in 2000 that because provisions in the Internal Revenue Code were not drafted precisely, the individual 50 states were not included in the definition of the "United States" for income tax purposes, and therefore U.S. citizens could file for foreign earned income exemptions.

The exemptions applied to the first $74,000 the individual earned -- the limit for tax year 1999. If the individual made less than $74,000, all withholding taxes would be refunded and they basically paid no income taxes, said Assistant U.S. Attorney William Shipley.

For preparing these types of returns, Basuel and Soong sought 10 percent of the client's tax refund as a fee.
Reginald Minn, attorney for Basuel, said Basuel had a "good-faith belief" that the loophole was legitimate and could be used to benefit his clients.

Basuel was not claiming that Hawaii was not part of the United States, but that because of the way "state" was defined in the IRS code, it created a loophole that they honestly felt they could take advantage of, Minn said.

Soong sincerely believed she was giving valid advice and charged the 10 percent fee because she believed it would work, he said.

Until trial, no one had told Basuel or Soong specifically why the position they were taking was incorrect or frivolous, Higa said.

The IRS did send out some refunds initially, but once it realized the advice the filers were relying on, it sent out 3,000 letters calling their position frivolous and instructed them to correct their returns, Shipley said.

Sentencing was set for Sept. 12. Each faces five years in prison for the conspiracy charge.

Just before trial, Basuel's son, Richard Basuel III, Dina Caleda and Rosalinda Tamayo each pleaded guilty to conspiracy and multiple counts of aiding and abetting in the filing of fraudulent tax returns. They are free while awaiting sentencing on Oct. 3.





Tax preparer gets 4 months' prison time


Thursday, February 15, 2007

A federal judge recently sentenced a Waipahu man to four months in prison for preparing fraudulent federal tax returns while working for his father's tax preparation business.

Richard Basuel II worked for his father, Richard Basuel, owner of RB Tax Service, who had offices in Kalihi and Waipahu.

Basuel, his father, Dina Caleda and Rosalinda Tamayo filed false tax returns for hundreds of clients between 1997 and 1999. The actions resulted in more than 900 false federal returns and more than $4 million in falsely claimed tax refunds, according to a news release.

Basuel and the others prepared false returns that failed to recognize Hawaii as a state. This allowed clients to be considered as foreigners and entitled them to file for refunds on their federal tax withholdings.

His father was sentenced earlier to 40 months in prison.

Both Caleda and Tamayo were sentenced to six months in prison.

--------------------------------------------------------------------------------

Your Theory
Powered By Ringsurf