Robert Brockman Tax Evasion Scandal

School: Kennesaw State University - Course: ACC 499 - Subject: Accounting

Robert Brockman Tax Evasion Scandal Summary Former CEO of Ohio-based software company Reynolds & Reynolds, which offers business solutions, Brockman is a native of Florida and relocated to Houston. Forbes has put his wealth at $4.7 billion (Richardson, 2015). The $2 billion tax fraud accusation is the highest tax charge against a person in the history of the United States, according to David L. Anderson, U.S. attorney for the Northern District of California, who also claims that the case is the biggest tax case ever brought against an American. The 39 charges in the lengthy indictment are now only allegations, but most of these cases do not turn out well for the accused. The Reynolds & Reynolds Company's chairman and CEO are accused in this significant case of conspiring, evading taxes, failing to declare foreign bank accounts, committing wire fraud, money laundering, tampering with evidence, and destroying evidence. The accusations are the result of a long-standing alleged plot to mislead investors in Reynolds and Reynolds debt instruments and conceal around $2 billion in revenue from the IRS. Another Texas millionaire and CEO of Vista Equity Partners, Robert Smith, was also implicated in the case. As part of his cooperation agreement, Smith signed a non-prosecution agreement and is paying $139 million. Why Brockman Committed Tax Evasion In accordance with court documents, Brockman's former business partner and the richest Black American were to be major witnesses against him. His name is Robert Smith. Smith avoided prosecution by acknowledging tax evasion, paying $139 million in taxes and penalties,

ROBERT BROCKMAN TAX EVASION SCANDAL3 and promising to cooperate (Richardson, 2015). The charge that Brockman dodged taxes by surreptitiously controlling an offshore charity trust—which he claimed was independent—was at the center of the criminal case against him. He purchased a fishing resort in Colorado, a private plane, and a 200-foot boat, according to the prosecution, among other things. According to a report at the time in the Aspen Times, the government eventually filed paperwork to take the 100-acre fishing refuge in the Rockies. How Brockman's passing might impact the government's capacity to collect the taxes it contends are owed was not immediately evident. CPA's Culpability in Cases of Tax Fraud By Clients As a CPA in practice, one should be aware of the possibility that a taxpayer may be the target of fraud or other criminal claims. If convicted, the taxpayer would often face incarceration and significant financial penalties. While CPAs may offer helpful guidance on tax obligations and IRS administrative processes, if a client's activities seem to have the makings of fraud or another crime, CPAs should direct that client to an attorney knowledgeable and talented in this field (Shilkova, 2020). If the CPA is not also an attorney, he or she must refrain from taking any actions that may be construed as legal practice. CPAs can prevent unintentionally making the client's legal defense more difficult or difficult by being familiar with the legal definitions of criminal tax fraud and IRS investigation techniques.