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7th Circuit upholds tax, fraud conviction against attorney, wife

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The 7th Circuit Court of Appeals has upheld the finding that a Brownsburg attorney and his wife fraudulently withheld their 2001 income from the Internal Revenue Service through an elaborate shell game.

In Scott C. Cole and Jennifer A. Cole v. Commissioner of Internal Revenue, No. 10-2194, Scott and Jennifer Cole appealed the finding that they omitted more than $1.2 million of income and more than $1.3 million of self-employment income from their 2001 joint tax return and penalties imposed for fraudulently doing so. Scott, a business planning and tax attorney, formed a partnership with his attorney brother under the Bentley Group. Scott also created other entities – some owned by him and some with other family owners – and used them to transfer income.  

In 2001, Scott performed legal work on a trust that earned him $1.2 million. But instead of reporting that money, it was shifted among the various entities. The Coles underreported their income for 2001 and were eventually audited by the IRS. They petitioned the Tax Court for relief after the IRS determined they significantly underreported their income and assessed a $556,187 income tax deficiency and a $417,140 fraud penalty against the couple. The Tax Court entered a final decision upholding the deficiency and penalty amounts and also assessed an additional $178,000 in deficiency and fraud penalties.

Scott, who represented himself on appeal, only made two arguments the 7th Circuit found could be addressed: whether the Tax Court erred in finding the Coles omitted income from their 2001 tax return; and whether the Tax Court erred in imposing a fraud penalty.

The Coles were unable to produce records supporting the amounts they actually claimed on taxes and the evidence before the Tax Court showed they actually made a great deal more than they claimed, wrote Judge John Tinder. The appellate court also rejected the Coles’ argument that Scott did not actually earn the money but the Bentley Group did. They found the couple’s argument regarding the 2001 filing “only accents the game of thimblerig suggested by Scott’s legal and financial maneuvering.”

The judges also upheld the fraud penalty imposed, noting the Tax Court cited a variety of factors to show the commissioner proved with clear and convincing evidence that the couple understated their 2001 tax liabilities.

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  3. All these sites putting up all the crap they do making Brent Look like A Monster like he's not a good person . First off th fight actually started not because of Brent but because of one of his friends then when the fight popped off his friend ran like a coward which left Brent to fend for himself .It IS NOT a crime to defend yourself 3 of them and 1 of him . just so happened he was a better fighter. I'm Brent s wife so I know him personally and up close . He's a very caring kind loving man . He's not abusive in any way . He is a loving father and really shouldn't be where he is not for self defense . Now because of one of his stupid friends trying to show off and turning out to be nothing but a coward and leaving Brent to be jumped by 3 men not only is Brent suffering but Me his wife , his kids abd step kidshis mom and brother his family is left to live without him abd suffering in more ways then one . that man was and still is my smile ....he's the one real thing I've ever had in my life .....f@#@ You Lafayette court system . Learn to do your jobs right he maybe should have gotten that year for misdemeanor battery but that s it . not one person can stand to me and tell me if u we're in a fight facing 3 men and u just by yourself u wouldn't fight back that you wouldn't do everything u could to walk away to ur family ur kids That's what Brent is guilty of trying to defend himself against 3 men he wanted to go home tohisfamily worse then they did he just happened to be a better fighter and he got the best of th others . what would you do ? Stand there lay there and be stomped and beaten or would u give it everything u got and fight back ? I'd of done the same only I'm so smallid of probably shot or stabbed or picked up something to use as a weapon . if it was me or them I'd do everything I could to make sure I was going to live that I would make it hone to see my kids and husband . I Love You Brent Anthony Forever & Always .....Soul 1 baby

  4. Good points, although this man did have a dog in the legal fight as that it was his mother on trial ... and he a dependent. As for parking spaces, handicap spots for pregnant women sure makes sense to me ... er, I mean pregnant men or women. (Please, I meant to include pregnant men the first time, not Room 101 again, please not Room 101 again. I love BB)

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