Posts Tagged ‘celebrities’

What You Never Want to Have In Common With Jennifer Lopez

Sunday, December 5th, 2010

             Do you owe back taxes?  If so, realize that you’re not alone.  Even the world’s richest and most popular people owe back taxes, too.  And the IRS will get their money, regardless of who you are.  Just ask Jennifer Lopez.

             Here’s what El Pais, the most widely newspaper in Spain, had to say in 2007 about singer Marc Anthony, husband of singer/actress Jennifer Lopez:

             “At least three companies he owns have not paid their taxes correctly and have been told to pay $2.5 million to the state and city of New York. They will also have to pay an additional $180,000 in fines.”

“So much for anyone being “above the law”.  The IRS usually always gets their man, eventually (even if he spends a lot of time walking down the red carpet…).

What are back taxes?  And why should you worry about them?  Back taxes are simply taxes  you owe that were not paid when they were due.

If you’ve underpaid taxes for any reason, the balance that you owe is considered back tax.  You may have failed to report taxable income (intentionally or unintentionally, it doesn’t matter) – as the IRS sees it…you still owe them money in the form of a back tax.

Some people don’t have the money when the tax bill comes around, so they just don’t pay.  They may plan on paying the money when they’re able…but that time never seems to come around.

If nothing seems to happen or they don’t get ‘caught’, some people start believing that they’ve somehow slipped under the radar of the IRS and that they’re getting away with it.  They’re not.  In fact it might take years for the IRS to come after you. 

How do you know your back tax problem is getting serious? Here’s how it happens:

-You’ll get sent a Notice and Demand for Payment from the IRS.

-You either pay or don’t pay the tax.

-If you don’t pay, you’ll be sent a Final Notice of Intent to Levy and Notice of Your Right to a Hearing at least 30 days before the levy.

That’s when you know you’ve got big problems.  That means in 30 days, the IRS is going to start helping themselves to the money in your bank account.  If you’ve received a Final Notice of Intent to Levy, you need to take action immediately.

Even if you haven’t been notified yet … you will be.  If you owe back taxes, even if you haven’t received your first Notice and Demand for Payment from the IRS, eventually you will.  And the worst part is that there are interest and penalties that are adding up everyday that you don’t pay.  Ignoring the problem makes it worse…by the day.

Tags: , ,
Posted in IRS Education | No Comments »

Capitol Hill Employees Owe $9.3 Million Worth of Overdue Taxes

Sunday, November 14th, 2010

The Internal Revenue Service recently released information that government employees on Capitol Hill owe overdue taxes worth $9.3 million, as part of the per agency IRS debt breakdown.  It is not clear whether there are some Congress members guilty of not properly paying their taxes, as the agency refused to specify those involved.

638 people, or around four percent of the 18,000 Capitol Hill employees, are included.  There is an average of $12,787 and $15,478 worth of unpaid taxes by offending taxpayers from the Senate and the Congress employees, respectively.

According to the Taxpayers for Common Sense Vice President Steve Ellis, the people of the Congress, including the staff members, have higher responsibility  in this matter because they write the laws and they are in public positions. Because of this, Rep. Jason Chaffetz of Utah filed legislation to release from service the people who are holding government office or jobs but also have tax issues. It has been co-sponsored by eight Republicans, although no Democrats signed on the bill,  saying that it would lessen the view of the government paying its employees.

Senator Charles E. Grassley of Iowa, who has authority over tax matters, said that it is indeed embarrassing for people in such positions to not follow the tax laws they themselves made.  Proper payment of tax is essential to promoting Democracy, so there is no excuse even though we are facing tough times, according to Mortimer Caplin, former IRS commissioner.

It has been noted that IRS debts have been increasing nationwide, which started even before the economic problems. At the end of 2009 alone, $103.2 billion worth of taxes have gone unpaid.  According to experts, this delinquency shows that the economic pressures are taking its toll on American families.

The fluctuating nature of workforce during change of dominance in political party may also be one of the reasons why there is an increase in overdue taxes.

Jock Friedly, who broadcasts the congressional wages on LegiStorm, may have an explanation.  Most of the new staff originally came from private companies where their earnings were much higher.  The reduction in their earnings has much impact on them, making debts pile up in the long run.

Tags: , ,
Posted in Newsworthy | No Comments »

IRS Files $300K in Liens on Idaho State Representative

Thursday, July 8th, 2010

On Monday, June 14th, the IRS filed $300,000 in tax liens against Rep. Phil Hart, an Idaho state representative.

Hart refused to pay taxes between the years of 1996 to 2003, saying he believes the income tax is unfair, and a misinterpretation of the constitution.

He has piled up $90,000 in unpaid taxes and penalties. The IRS has filed liens on property rights belonging to Hart, for unpaid balances totaling $257,947.

Hart said on Monday, “I think as long as I’m engaged in the process (I’ll be all right),” although he admitted the liens had him worried for his estate and his business, Alpine Engineering.

Hart has paid roughly $104,000 in state and federal taxes since 2006. Although he still believes it’s an “inefficient tax”.

His beliefs have led to working on House Bill 454, to eliminate taxes on wages, salary and investment income, and increasing the sales tax.

He said, “I would very much like to have a hearing in the next session.  I think in this economic environment we’re in, whether outside of the fact I have this litigation issue going on, I think we really need to be talking about our tax system.”

He sued the IRS in 1996 and stopped paying his taxes, contending that income tax was unconstitutional.  A federal judge ruled against him in 2000, and the U.S. Supreme Court refused to hear the case.

Hart serves on the states’ House Revenue and Taxation Committee. Some of his fellow Republicans are concerned that Hart’s beliefs may affect his ability to serve in this capacity.

“Ordinary citizens don’t have that same opportunity to influence policy that might affect them,” says Sen. Mike Jorgenson.

Tags: , ,
Posted in Newsworthy | 1 Comment »

“Worst Tax Defier in the History of the United States” Gets Maximum Sentence Permitted By Law

Friday, April 16th, 2010

Eddie Ray Kahn: Tax “Guru” Who Led Wesley Snipes and 4,000 Other Devotees Astray Gets 10 Years

It’s arguable that in the high-profile IRS case against Wesley Snipes, the wrong person got top billing.

From 1998 to 2004 Eddie Ray Kahn, 64, sold DVDs and seminars teaching tax-dodging schemes through his companies American Rights Litigators and the Guiding Light of God Ministries Inc.

His businesses earned an estimated $4.5 million from 1998 through 2004 — until U.S. Treasury agents shut him down.

Kahn was sentenced to 10 years for conspiracy to defraud the IRS.  Although he has not filed an official appeal notice, he said in court that he did not “accept” the court’s authority, verdict, or 10-year sentence.

His role in the Snipes case led prosecutors to call him one of the “worst tax defiers in the history of the United States.”

A former Texas police officer, Kahn previously served 3 years in prison for failing to file tax returns.

When Kahn’s Florida offices were raided in 2004, he and his family fled to Panama, where he remained until he was extradited to stand trial in the Snipes’ case.

The IRS said that Kahn’s devotees have filed so many nonsensical returns that it led to the creation of a special bureau, the Frivolous Return Program.

About his relationship with Kahn, Snipes claimed that he was duped, saying “I am an idealistic, naive, passionate, truth-seeking, spiritually motivated artist, unschooled in the science of law and finance”.

Douglas Rosile, the tax preparer who filed Wesley Snipes’ fraudulent returns, was also a Kahn devotee. Rosile was sentenced to 4 1/2 years in prison.

After his prosecution, his lawyer said Rosile left court a “broken man”.  It sounds as if Kahn, with his anti-IRS ideologies has left many broken lives in his wake.

Tags: ,
Posted in Newsworthy | 1 Comment »

What You Never Want To Have In Common With Will Smith

Monday, March 15th, 2010

In 2006, Will Smith starred in a movie called “The Pursuit of Happyness” – a true story about Chris Gardner, a man with a 5-year old son who ends up homeless on the streets of San Francisco.

Smith was nominated for an Academy Award and a Golden Globe Award for his part in this inspiring film, which tells with an unblinking eye the real-life story of a man’s struggle with a string of back luck coupled with questionable decisions.

One of the most poignant moments in the film is when Gardner (played by Smith), after being evicted from his apartment, finally sells one of the expensive pieces of medical equipment for which he and his former girlfriend had spent their life savings.

This breakthrough sale allows him to continue to pay for the hotel room where he and his son had been living…or so he thought. His joy quickly turns to horror as he realizes that the IRS has levied his bank account to satisfy a tax debt from the previous year.

As Smith’s character scrambles to call the IRS from a pay phone, he exclaims incredulously “You Can’t Do That!” Those are words that I hope you never have to say to the IRS.

You can hear the utter disbelief in his voice that any government agency could actually “hijack” a person’s bank account and take their money at will.

But that’s exactly what the IRS has the power to do – legally…

According to the IRS website,

“We usually levy only after these three requirements are met:

  • We assessed the tax and sent you a Notice and Demand for Payment;
  • You neglected or refused to pay the tax; and
  • We sent you a Final Notice of Intent to Levy and Notice of Your Right to A Hearing (levy notice) at least 30 days before the levy. We may give you this notice in person, leave it at your home or your usual place of business, or send it to your last known address by certified or registered mail, return receipt requested.”

The last thing you want to do is just sit there “frozen”, not knowing what to do once you receive a “Notice and Demand for Payment” or worse, a “Final Notice of Intent to Levy and Notice of Your Right to A Hearing”. If you’ve received either of these notices, the clock is ticking.

Tags: , ,
Posted in IRS Education | No Comments »

Senate Puts Tax Cheat in Charge of IRS

Saturday, March 6th, 2010

Newly appointed Treasury Secretary Tim Geithner worked for the International Monetary Fund from 2001-2004, and was considered self-employed, or an independent contractor.

During that time he was expected to pay Social Security and Medicare taxes, just like any self-employed person would have to pay. He did not.

In 2006, he was audited by the IRS and required to pay back taxes of $17,230. Apparently he did not pay the correct amount of taxes owed the entire time he worked for the IMF.

However, it wasn’t until the vetting process from the Obama administration in 2008 that it was discovered that Geithner had also failed to pay taxes and interest for the years 2001-2002. He was then required to pay $25,970 to the IRS.

Later he also filed an amended return, paying an additional $5,566 in taxes and penalties for infractions including failing to pay an early withdrawl penalty from a retirement plan, and an ineligible charitable donation.

Obama Press Secretary Robert Gibbs made the following statement on his behalf: “The president-elect chose Tim Geithner to be his Treasury Secretary because he’s the right person to help lead our economic recovery during these challenging times.”

“He’s dedicated his career to our country and served with honor, intelligence and distinction. That service should not be tarnished by honest mistakes, which, upon learning of them, he quickly addressed. He made a common mistake on his taxes…”

So, I guess we should expect the man who is now in charge of the agency which is over the IRS to perhaps be a bit more understanding of others in his shoes? We’ll wait and see…

Tags: , ,
Posted in Newsworthy | 2 Comments »

Wesley Snipes Roams Free As 3-Year Tax Evasion Sentence Appealed

Tuesday, February 23rd, 2010

Know where your favorite tax evading actors are hanging out these days?  In Wesley Snipes case, you might think after being sentenced to 3 years for tax evasion, Snipes might be wearing stripes behind bars.

But that’s certainly not the case.

Snipes was seen September 9, 2009, attending a screening featuring his latest starring role—playing opposite Richard Gere, Don Cheadle and Ethan Hawke in a movie called “Brooklyn’s Finest”.

He looked quite chipper—quite a different look than he had back in April when he was convicted of three counts of willfully failing to file tax returns, and was sentenced to 3 years in prison, and ordered to pay restitution of $17 Million plus interest. So far, Snipes has avoided jail time by appealing to the 11th Circuit Court of Appeals.

His attorney is arguing the trial was improper and the sentence too long. Snipes claims he was an innocent bystander of a pure trust scam, not a participant.

So far he hasn’t shown much remorse about his situation and has claimed that he’s been “scapegoated” somehow by the U.S. government “because there’s more public interest in ‘celebrities gone bad’ than ‘rich people being taken advantage of ‘”.

He says it “has more to do with a few individuals with access to power, making moves; trying to move up; and less with some alleged crime against the whole population of the United States of America”.

Tags: , ,
Posted in Newsworthy | No Comments »