Another Fraud Case Is Likely and More Notes on the "Legal Symposium"

The Muqata is reporting that the Feds have arrived in Israel to investigate possible fraudulent US/IRS tax rebates and citizenship/naturalization claims. I have a terrible feeling about what the end results will yield.

Years ago, I was on the receiving end of an email going around telling people to inform their family and children who made aliyah that they might miss certain tax credits. The email went on to detail how to get those credits. I emailed the sender of the email stating that I didn't think these credits were available to those the email was targeting (wish I still had the email and could recall the exact details). I received some sort of convoluted answer as to why they were "technically" eligible for these credits, but the explanation didn't quite pass muster with me and I stated as such to the sender. But, what do I know? He has a far fancier resume than me.

I forgot about this conversation until someone with a family member living in a different foreign country told me that said family member had claimed certain credits (based on some mesorah in her community) and had received a large somewhat massive tax refund after filing current and back years returns. Once again, the circumstances surrounding the claiming of such credits didn't quite make sense with my own understanding of how the tax system works, although I certainly don't have expertise on each possible loophole out there.

Note that I used the work "mesorah" to describe a lot of what goes on. What particularly bothers me most about the Spinka Rebbe's speech which I recently mentioned in a post is that it white washes the magnitude of the current situation the Jewish community finds itself in today (I do admit I that only could understand the English portion). The seemingly endless audits and investigations are, in my determination, the result of years of "red flags" in numerous systems.

The Spinka Rebbe made it sound as if his institutions and others just simply didn't know that what they were doing was illegal, deceptive, and fraudulent. The Rebbe stated: "I’d like to tell you that we’ve learned it’s possible to lead Torah and chessed organizations in accordance with the law. Yes, it is possible. People think it cannot be done, but we’ve learned this the hard way. There are now charedi lawyers and accountants who are experts in this area to ensure everything is run according to the law. When in doubt whether or not something is legal, we cannot make that determination on our own, chas v’sholom. We have to ask a lawyer how to conduct ourselves properly in that situation.” "

This current investigation, investigations regarding money laundering, investigations regarding welfare fraud or lunch money fraud are not investigations about people and organizations who forgot to cross some t's and dot some i's. These investigations are about organized crime and a "mesorah" of how to game the system. And, I think we might have lawyers and accountants to thank for passing on the mesorah.

There were always "chareidi lawyers and accountants" with enough expertise to tell the head of a yeshiva, kollel, or discretionary fund that it is illegal to take money from a "donor," route the money from account to account and country to country, and eventually return 80-95% of the money to the "donor." You don't need to pass the Bar or the CPA to know that this is illegal. I do think there is a need for more legal advice regarding employment and establishing benefits packages and the like. But that is more a matter of doting i's and crossing t's. Organized crime is ORGANIZED, i.e. deliberate.

"Arranging" your income, misrepresenting residences and citizenship, hiding your savings are examples of intent to game the system and are not mistakes. Depreciating an item over 3 years instead of 5 years, forgetting to subtract out a service from your property tax bill when you itemize, or forgetting to report interest income because a 1099 never arrived in the mail are normal mistakes and are likely not of particular concern to the IRS. Claiming certain credits while living abroad is of concern and I (sadly) can already see the headlines.

I'm trying to be somewhat positive about the "Legal Symposium" and I hope it is the step in the right direction, but for years now an entire "mesorah" has been being passed around about how to work the system. You'd have to live in a cave to be unaware of such things because quite a bit of it is out in the open. Now that "mesorah" is catching up with us and playing dumb is yet another misrepresentation in my opinion.

I think it is important for those of us who want to see a mesorah that is based on Torat Emet, yashrut, and general simplicity to make sure that our voices are heard when we get wind of various scheme because the bad apples are spoiling the bunch. I know that I don't want to be associated with fraud and deception the next time I apply for a job.