Posts Tagged ‘irs’

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IRS “Men in Black” Demand 4-Cent Delinquent Payment From Sacramento Car Wash

Wednesday, May 19th, 2010

Aaron Zeff, owner of Harv’s Metro Car Wash in Sacramento, recently had the scary experience of being visited by two dark-suited IRS agents.

According to Mr. Zeff, the agents demanded payment of delinquent taxes in a “very serious, very aggressive, very condescending” manner.

His crime? According to the agents, the grand total of delinquent taxes due:

4 cents.

That’s right—not enough to buy a candy bar or a piece of gum.

Perhaps mailing the bill would have been a better idea?  At least a postage stamp would have only put the taxpayers forty cents or so in the red.

Instead, it cost taxpayers exponentially more than 4 cents to pay the gas for the trip over there—not to mention the salaries of the two agents.

Mr. Zeff took it all in stride, finding the entire situation laughable…that is, until he read the demand letter, informing him the interest and penalties on the unpaid debt had accrued to a whopping $202.81.

Allegedly, since the offending omission occurred in 2006, he apparently owed 5070 times four cents!

In his defense, Mr. Zeff produced a letter dated from October 2009 from the IRS which asserted that Harv’s Metro Car Wash “”has filed all required returns and addressed any balances due.”

In fact, prior to the incident in question, Mr. Zeff said no other notice of demand for payment was made by the government.

An IRS representative, when asked by local reporters, declined to comment, citing privacy and disclosure laws.

Mr. Zeff complained to reporters that the agents were not only rude, “they didn’t even get a car wash”.

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Owner of North Hollywood Restaurant Sentenced for Tax Evasion

Tuesday, May 11th, 2010

On October 2, 2009, in Los Angeles, Calif., James Saliba, owner of a North Hollywood restaurant, Barsac Brasserie, was sentenced to 24 months in prison, three years supervised release, and ordered to pay restitution and fines totaling more than $938,000 for failing to report all of the restaurant’s business receipts and overstating business expenses from 2001 through 2005.   According to court documents, Saliba underreported the gross sales of Barsac by using an account he called “Accrued Management Fees”, where he recorded some of the sales.  He also overstated expenses by writing corporate checks from Barsac to his wife, Lisa Long, and then deducting these payments as expenses on the returns for the restaurant and by writing checks to “Cash” and expensing them as tips; giving a small portion to employees while skimming the balance for himself.

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Two Ways You Should NEVER Deal With IRS Problems

Friday, May 7th, 2010

If you had cancer, who would you want to see first?

a) Nobody – I’ll go it alone

b) a Nurse

c) a Doctor

d) an Oncologist

An Oncologist, right?  Why?  Because an Oncologist is a physician that specializes in the treatment of cancer.

Along that same line of thinking, if you had a problem with the IRS, would you go it alone?

Don’t believe for a second that reading a couple books, a website or a couple emails about “how to deal with the IRS” will prepare you to deal with the IRS if you owe them money.

The IRS have employees who make a career out of extracting money from people who owe taxes.  They deal with it every day.  They’re good at it.

This is something you deal with once in a lifetime (hopefully).  Face it – you’re not good at it.

These people are trained to act like your friend and make you comfortable…and then use it to get you to say something you’ll regret.

You wouldn’t “go it alone” with a deadly disease – don’t go it alone with the IRS.

What about an accountant?

Most accountants spend 3 months out of the year dealing with taxes.  They spend the rest of the time balancing books and preparing financial statements.

Just like having a good nurse can be a huge help to a cancer patient, a good accountant is a fantastic resource while you are still “in the clear” with the IRS.  They can give you great advice on how to set up your personal finances and/or business finances to take advantage of legal tax breaks.

But even the best nurse doesn’t have the power to prescribe the powerful medicines that are needed by a cancer patient – that right belongs to the Oncologist.

Once you’re on the other side of the IRS and no longer “in the clear” (in other words you failed to file or failed to pay), your accountant is not in a good position to help you fight the mighty power of the IRS.

That alone is the job of an attorney specifically trained in dealing with IRS problems.

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Daughter of IRS Suicide Pilot Calls Dad a “Hero”

Tuesday, May 4th, 2010

According to his daughter, Joe Stack, the lone airman who flew his plane into an Austin IRS building killing himself and one IRS employee, was a “hero”.

A number of anti-government groups, including radical-right and white supremacist  groups agree.

Stack is already becoming a bit of an internet phenomenon, with a Facebook page devoted to discussing his views, as well as a crude video game of his attack circulating the web.

However, the son of Vernon Hunter, the IRS employee Stack killed, strongly disagrees with his hero status.

“How can you call someone a hero who after he burns down his house, he gets into his plane … and flies it into a building to kill people?” said son Ken Hunter on ABC. “My dad, Vernon, did tours of duty in Vietnam.  My dad’s a hero.”

In an interview with Good Morning America from her home in Norway, Stack’s daughter, Samantha Bell, said, “I think too many people lay around and wait for things to happen, but if nobody comes out and speaks up on behalf of injustice then nothing will ever be accomplished”. She went on to say, “But I do not agree with his last action and what he did. But I do agree about the government.”  The interviewer then asked,  “So is your father a hero?”  And Bell replied, “Yes.”

Another veteran, Robin De Haven, who was driving his glass truck by the building when the plane hit, immediately took his ladder off the truck, propped it against the burning building and successfully guided 5 people to safety.

Sounds like the real hero made himself evident.

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Cincinnati Doctor Receives Two-Year Sentence for Money Laundering

Friday, April 30th, 2010

On January 19, 2007, in Cincinnati, OH, Gregory L. Ebner was sentenced to serve 24 months in prison, followed by three years of supervised release and ordered to pay a $10,000 fine for his role in a money laundering and structuring a money transactions scheme relative to the proceeds he received from prescribing controlled substances.  Ebner was a physician who worked in the “pain clinics” two to three days a week and saw around 30 patients a day. Ebner prescribed drugs after cursory medical examinations in which he never checked the height, weight, or blood pressure of his patients. The “pain clinics” would not accept insurance or any other form of payment. Patients paid cash in amounts ranging from $175 to $200 per patient.  Ebner took the illegal “pain clinic” proceeds and laundered and structured these funds in order to conceal and hide his involvement in this illegal activity.

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Tax Avoidance vs. Tax Evasion… What’s the Difference?

Thursday, March 18th, 2010

Depending on who you ask, some people may say that tax avoidance is either “smart business” or it’s “immoral”.

But, if done correctly, there’s one thing it’s not…It’s not illegal.

There are numerous ways a person can decrease his or her tax liability legally:

- Claiming deductions

- Incorporating

- Setting up a charitable trust or foundation

More complicated and controversial methods include setting up a company, trust, or foundation in an offshore jurisdiction.

Tax evasion, on the other hand, is the willful act of misrepresenting financial information to avoid the tax liability. Common forms of tax evasion are understating income, wages, or gains on the sale of property, and/or overstating tax deductions.

What’s the Difference?

To keep it simple – think of it this way: Tax avoidance is maneuvering to avoid the tax liability in the first place. The tax does not exist, because in a legal sense, no income, profit, or gain ever existed.

Tax evasion is maneuvering to avoid the payment of a tax liability that has already been created.  The tax exists because the income, profit, or gain already exists.  To avoid paying the tax is a criminal act.

Why Would the Government Allow Tax Avoidance?

Obviously, no government could function if all its citizens legally avoided paying taxes.  While there are legal means of tax avoidance that every citizen has a right to put into practice, there are also “abusive tax avoidance strategies” the IRS warns against openly. These include:

- Anti-Tax Law Schemes

- Abusive Offshore Schemes

- Abusive Trust Schemes

- Misuse of the Disabled Access Credit

- Abusive Home-Based Business Schemes

- Employee Plans Abusive Tax Transactions

- Exempt Organization Abusive Tax Avoidance Transactions

The IRS tows a hard line with the promotion of Illegal Tax Schemes posing as Legal Tax Avoidance Strategies.

Tax Avoidance has always had its share of hucksters and scam artists who appeal to the “greed mechanism” present in some taxpayers by selling “get out of paying tax legally” kits and seminars.

Civil Injunctions are being charged against these con artists in an effort to stop these Illegal Tax Schemes. According to the IRS, in 2003, the government filed lawsuits to shut down 35 promoters of abusive tax schemes, and federal judges enjoined 28 promoters.

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Couple Sentenced on Conspiracy and Tax Evasion Charges

Saturday, March 13th, 2010

On November 16, 2006, in Erie, PA, Ronald J. and Carol A. Kapala were sentenced for conspiring to defraud the United States by impeding and impairing the lawful functions of the Internal Revenue Service.  Ronald Kapala was sentenced to 30 months in prison to be followed by three years of supervised release and ordered to pay a $100 assessment.   Carol Kapala was sentenced to three years probation and ordered to pay a $300 assessment.  According to the indictment, the Kapalas failed to file income tax returns from 1990 through 1998 and 2002 through 2004; attempted to conceal their construction business activity through the use of nominee names; disguised ownership of assets by transferring them out of their names; formed a bogus tax-exempt religious organization for the construction business in the name “Mission Builders,” and made fraudulent claims with the IRS concerning their obligation to pay federal income taxes.

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The Secret to Overcoming Fear of the IRS

Tuesday, March 9th, 2010

Ambrose Redmoon once said:

“Courage is not the absence of fear, but rather the judgment that something else is more important than fear.”

I understand that the IRS scares the pants off most people. That’s by design. The government wants you to fear the IRS and not be tempted to be lazy in paying your taxes.

But you cannot let fear of the IRS cause you to procrastinate or take the “head in the sand” approach.

The IRS is fully prepared and willing to use every collection method in the book to get their money once they’ve figured out that you owe them, including:

- Liens

- Wage Garnishment

- Seizure of bank accounts

- Seizure (and auctioning off) personal property

- Imprisonment

When you have the courage to stand up and face your problem, you have made the judgment that something else is more important than fear, like:

- Living a normal life where you are able to breathe easy, sleep at night, and not spend it looking over your shoulder wondering when the IRS is going to “jump out of the bushes”

- Knowing that you have the freedom to pursue your personal dreams & goals without the pressure hanging over your head that someday you’re going to have to “pay the piper”

- Keeping your marriage together without the burden of wondering if “today’s going to be the day” when the IRS finally catches up to you and throws a major wrench into your life

- Saving for the kid’s college, retirement, and other long-term goals without the worry that the IRS is going to come in and take it all out from under you

I’m not going to paint some rosy picture that facing up to your IRS problem and working out a solution is going to be pleasant.

But you must consider the alternative…

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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…

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The Good News About Installment Payments and the Statute of Limitations

Thursday, March 4th, 2010

When it comes to making installment payments to pay off a tax debt, it used to be that the IRS wouldn’t agree to the arrangement if the taxpayer’s debt would not get paid off before the collection statute ran out.

So, in the past, if you owed $30,000 in back taxes (including penalties and interest) and you had 5 years (60 months) left on the statute, the IRS would only agree to allow a payment plan that paid off the full $30,000 in 60 months.

So, if you could afford it or not – you were stuck with a $500 monthly payment. But, thanks to Congress, this is no longer the case.

Code section 6159(a) now makes it to where the IRS must take into consideration your entire financial situation before deciding on an installment agreement.

So, in the situation just described, if it was determined that – considering your monthly expenses and income -  you could only reasonably be expected to pay $300/month, that’s what you would pay in a Partial Payment Installment Agreement.

(NOTE: with a Partial Payment Installment agreement, your finances will come under review every two years. If it’s determined at that time that you could afford to pay more than $300, your payment would be increased.)

Assuming your payment was not increased, after the 60 months of $300 payments, you’ve paid a total of $18,000…and then the statute of limitations runs out.

You no longer are liable for the rest of the $30,000 tax.  So, the statute in this instance worked to your advantage to the tune of $12,000.

There may be ways of approaching the IRS in a manner that can use the Statute of Limitations to your advantage.

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