Tim’s Tax News on the Tenth – August 2017

HUSBAND AND WIFE CONVICTED FOR INCOME TAX EVASION AND BANKRUPTCY FRAUD

Recently, a Colorado couple, Daryl Yurek and his wife, Wendy Yurek, were convicted for income tax evasion and bankruptcy fraud. The government put on a two-week trial and then the jury took only three hours to deliberate before returning guilty verdicts. When each of their sentencing hearings occurs in December, each will face prison sentences of 10 years or more.

The United States Attorney and IRS Criminal Investigation showed that from 1999 through 2012, Daryl Yurek was a partner in Bolder Venture Partners, of which Wendy Yurek was also a partner from 2008 through 2012. Daryl Yurek acted as a consultant to start-up and growing companies and provided a variety of services, including temporary management and fundraising. Daryl Yurek also exerted significant control over other companies, including ID Watchdog and Veracity Credit Consultants.

Daryl and Wendy Yurek reported taxes due and owing for tax years 1999 and 2004 of $624,127 and $53,978, respectively. In 2006, the Yureks attempted to settle this tax obligation with the IRS for $75,000 through an Offer in Compromise in which the Yureks claimed to have insufficient funds to pay the full amount owed. After the Offer in Compromise did not work to resolve their tax problems, the Yureks, in September 2010, filed a Voluntary Chapter 7 Bankruptcy Petition with the United States Bankruptcy Court. During the bankruptcy proceeding, Daryl Yurek testified that their primary reason for pursuing bankruptcy was “the $1,200,000 that the IRS wants.”

During the time that the Yureks claimed to have insufficient money to pay the owed taxes, the Yureks caused Veracity Credit Consultants and Bolder Venture Partners to pay for substantial personal expenses for the Yureks. In March 2006, the Yureks purchased a loft in downtown Denver for $1,300,000 in the name of one of their sons. Between 2006 and 2011, Veracity Credit Consultants made mortgage payments on that downtown loft, which was the Yureks’ personal residence, totaling approximately $528,635. Bolder Venture Partners paid Condo Association Fees on the loft totaling approximately $43,866. Between 2006 and 2010, Veracity Credit Consultants made rental payments totaling approximately $115,719 for a vacation house in Tabernash, Colorado, which was used by the Yureks. Between 2007 and 2013, Veracity Credit Consultants also made payments totaling approximately $116,009 to the Pinehurst Country Club for Daryl Yurek’s membership dues and other expenses associated with the membership.

The government presented other evidence of the Yureks having committed numerous affirmative acts of evasion, including submitting to the IRS false and misleading statements on Forms 433-A, IRS Collection Information Statement for Wage Earners and Self-Employed Individuals. In preparing the 433-A, Yurek claimed that he had not made any transfers for less than full value. However, in 2008 and 2009, Daryl Yurek transferred shares that he held in ID Watchdog to Veracity Credit Consultants and to his sons for less than full value. Such conduct led the jury to their verdict quite quickly.

Our office has been successful in helping taxpayers with IRS and IDOR collection problems for over 25 years. If you have a tax or debt problem, please contact me at (847) 705-9698 or thughes@lavellelaw.com and find out how we can help you. Above all, if you are unable to pay your tax bill, do not wait to call us. There are many programs designed to help taxpayers who are having trouble paying their tax bills. Because interest and penalties on unpaid taxes can add up very quickly, it is better to call our office sooner rather than later for help.

Lavelle Law, Ltd. is registered with the Illinois Department of Financial and Professional Regulation as an approved continuing education provider for CPE for CPAs and Enrolled Agents. If your organization is seeking CPE courses in the area of Business Law, Innocent Spouse Relief, IRS Collections, Tax Scams (including ID Theft) or other areas in tax law that can be taught at your office, please contact me at thughes@lavellelaw.com.

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