Couple Face 25 Years Over Corporation Sole

[The Observer]

BNA is reporting today that a John and Sandra Cote of Brooklyn, Connecticut were arrested on January 9, 2013 for tax fraud. The article in part reported:

In 1995 and 1996, the Cotes concealed income and assets from the government and submitted obstructive letters and other documents, including fake financial instruments and false criminal complaints against IRS employees, DOJ said.

For the years 1998 to 2009, the Cotes allegedly prevented the companies for which John Cotes consulted from filing Forms 1099 bearing his Social Security number. The companies instead paid his compensation to nominee bank accounts, including accounts in Costa Rica, Antigua, and Sweden, DOJ said.

The Cotes also used a nominee entity called “Sandra Cote, Overseer of God's Battery Ministry, and Her Successors, a Corporation Sole” to conceal income and assets from IRS, the announcement said. Sandra Cote conveyed the couple's personal residence to the entity in 2003, DOJ said.

[Lambkin]

How does one "prevent" a company from filing forms 1099? My experience as an occasional consultant has been something like "give us your SSN for the 1099 if you want to be paid".

[webhick]

How does one "prevent" a company from filing forms 1099? My experience as an occasional consultant has been something like "give us your SSN for the 1099 if you want to be paid".

Threatening litigation, stealing and shredding it before it got to a mailbox, refusing to accept it, etc. Also, depending on what kind of consulting he was doing, it could have been part of his responsibilities to pay his own invoices and file that paperwork. He could have assured them that his payment method was legal (or not told them) and came up with excuses as to why the 1099s could be filed "yet". He could have kept contesting the amount and demanding corrections into oblivion. He could have withheld the SSN from the start and they really liked him so they just kept trying and then they thought they couldn't file the 1099s because they thought the IRS would slap them hard for not getting it (he could have led them to believe it, too).

There are numerous scenarios which could have happened.

[Mider]

We have a lot of people who are consultants for business, most of the time they get around the 1099 requirement by just telling the other company that they are incorporated, the other company normally doesn't even check, just take their word.

[JamesVincent]

We have a lot of people who are consultants for business, most of the time they get around the 1099 requirement by just telling the other company that they are incorporated, the other company normally doesn't even check, just take their word.

How does that work? Every company I have ever dealt with still had to file something to prove that that money was indeed paid somewhere, whether to a corporation, or an individual, or even a charity, otherwise they have to pay the taxes on it. Now, if they didnt mind paying the taxes and just paid cash I could see them not filing anything. Even if all you file is "paid $221, 562 to XYZ Corporation, consultants" then you have still filed something there. And your forms would still have a name attached to it, whether Joe Blow from XYZ or what have you.

[Mider]

There would be a paper trail, probably a canceled check for the payment or a bank statement showing an online transfer, but there would not be a 1099 issued in the SS# of the person if they were treated as a LLC.

[wserra]

How does that work?

How the govt explained it (or not) in its successful motion for detention:

During the time period covered by the indictment, the defendant traveled the world as a consultant in the high-technology welding industry. Working in concert with his wife, the defendant prevented the companies with which he contracted from reporting his income to the IRS. The Cotes hid this income from the government by directing the companies to wire the defendant’s compensation to bank accounts in Costa Rica, Antigua, and Sweden, as well as to a bank account in Connecticut that Sandra Cote opened in the name of a fake church.

The defendant and his wife submitted numerous obstructive and harassing documents to the IRS in response to notices and warning letters directing them to file tax returns and pay taxes. Over more than a decade, the Cotes adduced a litany of frivolous “tax protester” or “tax defier” claims about the tax laws. Among other things, the defendant and his wife claimed that the tax laws were not applicable to them; they were non-resident aliens and sovereign citizens; the IRS lacked the legal authority to assess and collect taxes; and that any compensation received by the defendant was not taxable.

[Dr. Caligari]

A corporation sole? Sounds fishy.

[The Observer]

A corporation sole? Sounds fishy.

I bet you posted that on porpoise just for the halibut.

[Pottapaug1938]

A corporation sole? Sounds fishy.

I bet you posted that on porpoise just for the halibut.

Well, that's better than the way I floundered around, singing an off-key tuna, until I said "holy mackerel" -- I just thought of a whale of a special type of corporation for sovruns!" Congress should add a special Section R to the law enabling Corporations Sole; and allow the creation of a Corporation (R) Sole for any sovrun who wants one.

[The Observer]

Well, that's better than the way I floundered around, singing an off-key tuna, until I said "holy mackerel" -- I just thought of a whale of a special type of corporation for sovruns!" Congress should add a special Section R to the law enabling Corporations Sole; and allow the creation of a Corporation (R) Sole for any sovrun who wants one.

Ha! Your scheme is nothing more than a trick to lure sovruns and paytriots into thinking they have escaped when in reality they unwittingly place themselves under the authority and rule of the US Fish and Wildlife Service.

[Pottapaug1938]

Well, that's better than the way I floundered around, singing an off-key tuna, until I said "holy mackerel" -- I just thought of a whale of a special type of corporation for sovruns!" Congress should add a special Section R to the law enabling Corporations Sole; and allow the creation of a Corporation (R) Sole for any sovrun who wants one.

Ha! Your scheme is nothing more than a trick to lure sovruns and paytriots into thinking they have escaped when in reality they unwittingly place themselves under the authority and rule of the US Fish and Wildlife Service.

You got that right! Besides, I want to be at the local IRS office, some day, when a sovrun walks in and says "I don't have to pay taxes because I am an 'R Sole.'"

[notorial dissent]

Well, at least if they were banded and tagged, they could keep a better eye one them. Oh wait, wasn't that all taken care of by a different department with the magic contrails, and the sub cue chips they were implanting a while back? They have so many programs going now I can't keep track of them all.

[LPC]

I want to be at the local IRS office, some day, when a sovrun walks in and says "I don't have to pay taxes because I am an 'R Sole.'"

There should be a special circle of Hell for that kind of pun.

[searcher]

To:The Observer
@ >I bet you posted that on porpoise just for the halibut.
I love your sense of humor.Thanks for the good laugh!! I love to laugh,but it seldom happens.

[LPC]

To:The Observer
@ >I bet you posted that on porpoise just for the halibut.
I love your sense of humor.Thanks for the good laugh!! I love to laugh,but it seldom happens.

What, the botox causes your face to crack?