by Structured Settlement Watchdog
The Coronavirus may be waning, but the "Kroner-IRS" continues.
Burt Kroner, the CEO of recently shuttered Boca Raton Florida structured settlement factoring company Client First Funding, failed
to report millions of dollars in income. After an audit, an IRS examiner sent him a letter that said Kroner owed penalties on top of his back taxes. See 26 U.S.C. § 6662. Kroner tried to negotiate without success; the examiner's direct supervisor signed a second letter, which proposed the same penalties, as well as a form approving those penalties.
See my prior post of June 7, 2020 for further background details
Since then
Eventually, after more failed negotiation, the IRS issued Kroner a statutory notice of deficiency, which triggered his right to petition the Tax Court for review. The Tax Court disallowed the penalties, holding that the supervisor's approval came too late because she had not approved the penalties at the time of the first letter.
The IRS appealed, arguing that the Tax Court misinterpreted Section 6751(b)'s requirements. The IRS prevailed against Burt Kroner.
Burt Kroner v. Commissioner, No. 20-13902 (13 September 2022) 11th Circuit REVERSES Tax Court: IRS CAN Impose Penalty on Millions in Unreported Income
In May I reported receiving phone calls from a number of investors missing payments from factored structured settlement payments from Symetra that were being serviced by Client First. Eventually they were paid. At this point if you are missing paymnets contact the annuity issuing life insurance company.
Client First Settlement Funding LLC Files for Bankruptcy in West Palm Beach | BKData