INVESTIGATION: The Tax Crimes of Diane L. Kroupa and Spouse

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Diane L. Kroupa is charged with a tax crime after filing fraudulent tax returns that resulted in $400K in owed taxes.

BY GARY S. WOLFE, ESQ.

In resounding irony, a former US Tax Court Judge, Ms. Diane L. Kroupa and her husband Robert E. Fackler were indicted in 2016 for allegedly conspiring to evade $400k in taxes. She is alleged to have filed fraudulent tax returns (while sitting as a US Tax Court Judge) between 2004-2012 claiming non-deductible personal expenses as deductible business expenses including: rent, utilities, upkeep and home renovation expenses, Pilates classes, spa and massage fees, jewelry and personal clothing, wine club fees, Chinese language tutoring, music lessons, and personal computers.

The couple (who were husband and wife) conspired with each other to evade assessment of taxes and were charged for the following tax crimes: conspiracy, tax evasion, making and subscribing false tax returns and obstruction of an IRS audit (4 separate tax crimes all of which are felonies and total a maximum of 16 years in jail).

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They are alleged to have made numerous false claims on their tax returns: they deducted vacation expenses as business expenses for travel to Alaska, Australia, the Bahamas, China, England, Greece, Hawaii, Mexico and Thailand. They failed to report $44,250 from a land sale; they falsely claimed financial insolvency to avoid paying tax on $33,031 on cancellation of indebtedness income. They purposely understated their income by approximately $1m and the amount of tax they owed by $400k.

During an IRS tax audit in 2006 they concealed documents from their tax preparer and from an IRS Tax Compliance Officer. In 2012 during a second audit, they caused misleading documents to be delivered to an IRS employee in order to convince the IRS employee that certain personal expenses were deductible as business expenses.

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In the words of Chief Richard Weber of the IRS-Criminal Investigation Division: “As a former tax court judge, Kroupa dealt regularly with individuals who cheated on their taxes, which makes these allegations particularly troubling. Reporting personal expenses as business expenses on your tax returns is not tolerated, regardless of your job or position. We expect all taxpayers to follow the law… we all must play by the same rules and pay our fair share.”


ABOUT THE AUTHOR:

GARY S. WOLFEGary S. Wolfe, Esq.

The Wolfe Law Group represent U.S. Taxpayers for IRS Tax Audits, U.S. Investors who have International Investments, and Foreign Persons who invest in the United States. We have over 30 years of experience, specializing in IRS Tax Audits and International Tax Matters including: International Tax Planning/Tax Compliance, and International Asset Protection.

Tel: 323-782-9139 Email: gsw@gswlaw.com

 

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