When it comes to paying taxes, some people are criminals about it.  Sadly, some people who call themselves “tax professionals” are also criminals!  Chances are, if you are seeking tax help from a tax professional, you may already feel like you are in over your head.  If the “tax professional” gives you advice that sounds too good to be true, it just may be!  Do your research and arm yourself with this list of questions to ask a tax professional, tax attorney or tax specialist.  Remember, bad advice from a tax professional is just that - bad advice.  If you follow the advice, you are the one who is responsible for it and may pay the price like this Montana man who landed up in prison. 

Stephan Karchut, of Kalispell, Mon., was sentenced to four months in prison, four months of home detention with electric monitoring, and three years of supervised release following incarceration for attempting to evade his 2004 income taxes. He was also ordered to pay restitution to the IRS of $44,901 of taxes owed for the years 2003 and 2004 and to cooperate with the IRS in determining additional income taxes, penalties, and interest that he may owe for the years 2002 through 2004.

Karchut previously pleaded guilty to the charge, which involved Karchut’s efforts to conceal income he earned as sole operator of a business known as PC Surveillance, located in Cortland, Ohio, where he formerly resided.

Beginning in 2002, Karchut followed erroneous advice of a person who held himself out as a tax professional to conceal his income and tax liabilities. Karchut failed to file income tax returns for 2002 to 2004, on false advice that under Section 861 of the IRS Code income is not reportable unless it is received from foreign source — the so-called “861 argument.”

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This entry was posted on Tuesday, October 13th, 2009 at 8:11 pm and is filed under IRS Tax Cases, IRS Times and Inquirer. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.