If you owe the IRS taxes, they can file a federal IRS tax lien against you! With a tax lien filed against you or your business, your credit is affected. It shows up on your credit report and will make it difficult, or impossible, to obtain financing for an automobile or a home. How does an IRS tax lien get filed against you? A great example is this man in Akron, Ohio, who found all sorts of ways to evade taxes.
Daniel L. French, of Akron, Ohio, was sentenced to eight months in prison, to be followed by three years of supervised release, for attempting to evade personal income taxes for the year 2003.
French pleaded guilty to the charge in a written plea in which he also acknowledged he attempted to evade his 2002 taxes and filed false 2002 and 2003 S Corporation returns for a corporation he previously owned and operated under the name D.L. French Co. Inc.
According to the plea agreement, French filed false S Corporation returns (Form 1120S) for the years 2002 and 2003, whose deductions for purported corporate payments for “shop supplies and parts” and “subcontract labor” were in fact disbursements for his personal benefit.
Among these disbursements were checks deposited into a nominee bank account French controlled. As a result of the overstatement of costs, the corporate returns also understated the corporation’s income, which was reportable on French’s personal returns as distributive income. French attempted to evade his personal income taxes for 2002 and 2003 by filing false tax returns on which he understated his income and tax liabilities by reporting his falsely understated business income.
A Las Vegas personal injury attorney who was convicted last year of tax evasion and owes almost $4 million to the IRS was sentenced to five years in federal prison.
Edmund C. Botha, 47, was also ordered to serve three years of supervised release and to pay $685,505 in restitution to the IRS as a condition of supervised release.
“The length, breadth, and complexity of this scheme and the gravity of the offense warranted a severe penalty,” said Greg Brower, U.S. Attorney for the District of Nevada. “Despite earning more than $7 million between 1996 and 2006, Mr. Botha paid just over $230,000 in taxes and went to great lengths to hide his assets from the IRS.”
According to the court records and evidence presented at trial, Botha evaded the taxes by purchasing luxury vehicles in his ex-girlfriend’s name; transacting all of his business in cash and cashier’s checks; and entering into a sham child-support agreement requiring him to pay about $20,000 per month for two children. Testimony at trial showed that Botha conducted over $2 million in cash transactions from 1998 to 2003 and paid his rent, utilities, payroll, and other business expenses with cash or cashier’s checks. Evidence further showed that Botha purchased more than 10 vehicles worth more than $400,000 over a six-year period in his ex-girlfriend’s name, while at the same time having only a 15-year-old car with over 100,000 miles on it in his name.
If you need professional tax representation, contact Tax Resolution Services for a free tax consultation or call our office at 1-866-IRS-PROBLEMS. We are here to help you find tax relief.
James Press, the Deputy Chief Executive of Chrysler, is now facing government tax liens due to his inability to pay off loans without his bonus paycheck.
Chrysler received $4 billion in government rescue loans in early January of 2009 to avoid collapse–the harsh conditions faced by Chrysler also led to the discontinuation of all managerial bonus payments.
According to Bloomberg News, “Due to the turmoil in the automobile industry and uncertainty surrounding our ownership, my request for bonus payment was denied,” Mr. Press said, after informing the Western Federal Credit Union that he would be unable to make two pending loan payments for $203,000, according to the lawsuit, portions of which were posted by The Detroit News on its Web page. “I am attempting to arrange for a loan against my future bonus with my employer, which would allow me to pay this loan off.”
If you suddenly lose one of your sources of income, you may find yourself in a similar situation as James Press. Instead of waiting to be chased after by the government with threats of tax liens and bank levies, seek tax help from a professional tax expert. Being proactive about your tax problems is the first step to a successful tax resolution.
In an effort to keep the doors open for foreign bank account holders wary of criminal prosecution, the IRS has extended the deadline for voluntary disclosure from September 23rd to October 15th, giving taxpayers an extra 2.5 weeks to come clean about their undeclared income.
If you have undeclared funds in foreign bank accounts, now is the time to act in order to reduce your chances of criminal prosecution and to work out an affordable tax resolution payment plan.
More than 3,000 taxpayers have already come forward this year, compared to only 88 from last year. Much of this can be attributed to the original deadline of Wednesday, September 23rd. However, due to the large amount phone calls from taxpayers and tax attorneys asking for more time, the IRS decided to give everyone a break.
According to Laura Saunders of the Wall Street Journal, “This year’s program has received outsize attention thanks to a dispute between the U.S. and Swiss governments over the identities of U.S. taxpayers holding at least $10 billion in some 52,000 secret accounts at UBS. In a comprehensive settlement in August, the Swiss government agreed to identify at least 4,450 more UBS account holders and possibly many from other banks. Attorneys say they have been inundated with calls from clients. Recently many more have decided to confess, say attorneys. Bryan Skarlatos, an attorney with Kostelanetz & Fink in New York, says his firm is handling more than 250 disclosures.”
Anyone who steps forward will significantly reduce their chances of criminal prosecution. Many of the people who have confessed to undeclared income will face IRS penalties and interests on their back taxes up to 40% to 60% of their total account balance (this does not include legal and accounting fees). You can save a lot of money by being proactive about disclosing your foreign funds–call a tax attorney for tax help if you are unsure of how to proceed in your best interest.
For those who think that they may be able to get away undetected is taking a larger-than-life gamble. It’s not worth the IRS tax trouble to try and escape under the radar. Contact a professional tax attorney or tax resolution specialist today if you believe that you owe back taxes on your foreign accounts.
It’s important for foreign bank account holders to take advantage of this deadline extension to sort out their tax problems and come forward before UBS reveals their names to the IRS. Act now before it’s too late!
I help people resolve their tax problems every day–big or small. Contact our team of experts for a free consultation. Call us at 866-IRS-PROBLEMS (1-866-477-7762) or visit our website at www.TaxResolution.com
Every month I choose a very special Tax Client Of The Month. It’s my way of acknowledging good friends and saying “thanks” to those who support me and my business with referrals, word of mouth and repeat business.
This month’s Client Of The Month is Mr. Matthew Mark.
When Mr. Mark sought our help, his debt to the IRS was over $16,000. He wanted to file Bankruptcy, but that would extend the Tax Collection Statute. We advised him that if he waited he could get out from under his IRS debt for $0.00 due to the collection statute date expiring. As a result of our analysis of his situation, the $16,000 went to $0.00. Congratulations Mr. Mark!
You might be my next Tax Client Of The Month too! Watch for your name here in an upcoming month.
Thanks for the Kind Words…
“TRS earned my trust in tax matters. I worked with 3 other tax resolution firms and TRS is the only one that actually kept their word.” I was very grateful.”
—— Question: Give it to me straight and easy. If I owe money to the IRS that I cannot find a way to pay back, how do I go about qualifying for and negotiating with the IRS in an Offer in Compromise?
Answer: No matter what, your first step at this point should be to consult a qualified tax professional. He or she will not only analyze your previous tax returns, but after doing so, we’ll be able to tell you whether the Offer in Compromise program will work for you.
First, it might help to understand fully what the IRS Offer in Compromise programis. Simply, after years of chasing deadbeat taxpayers with mixed results, the IRS realized that a kinder, gentler enforcement approach can be more effective than an iron-fisted one. Enter the Offer in Compromise program, which allows taxpayers who are absolutely unable to satisfy their debts to negotiate a settlement amount with the IRS. Oftentimes, believe it or not, that settlement is a lot less than you owe.
Now, assuming you do qualify for an Offer in Compromise, your qualified tax professional will closely analyze your previous returns to come up with the exact amount you owe the IRS. After all, why go to the negotiating table starting with an amount even a penny more than you owe? Once that’s complete, you and your tax professional will sit down with an IRS agent and come to an agreement on what you need to pay to settle this tax debt once and for all.
Really, it’s that simple. Keep in mind, too, that should you not qualify for the Offer in Compromise program, you have other options as well — including the Installment Agreement (also knows as an IRS Payment Plan)— and you should discuss these alternatives with your tax professional.
—— A note from Michael Rozbruch: I’ve seen it time and time again: Life is much easier for clients once they solve their IRS problems and no longer have to worry about the taxman. I solve tax problems every day. That’s because I’m an IRS Problem Solver. For a free, no-risk consultation, please call my office at 866-IRS-PROBLEMS (866-477-7762).
I’ve blogged many times about people who fail to file taxes, for whatever reason. They may be knowingly evading taxes or they may be too scared to file taxes because they are afraid that they won’t be able to pay whatever they owe the IRS. Did you know that you can file a tax return, even when it is grossly late? Better to file a delinquent tax return, than be convicted of failing to file taxes like this gentleman below.
The owner of a Barnegat, N.J., construction company pleaded guilty to a charge of tax evasion for failing to report income of approximately $242,764.
At his plea hearing, Daniel Carlo, 45, stated that he owns and operates a construction company under the name of “Cartar” from his residence in Barnegat. Carlo admitted that in April 2006, he prepared, signed and filed with the IRS a 2005 individual tax return which stated that his taxable income for calendar year 2005 was $0.
Carlo admitted that he failed to report taxable income of about $242,764, upon which an additional tax of approximately $78,792 was due to the IRS.
Carlo also admitted that in an effort to hide a substantial part of the unreported income, he deposited client receipts into bank accounts in the name of his wife and daughter. He faces up to five years in prison and a fine of up to $250,000.
As the IRS Amnesty Period is drawing quickly to its expiration date next Wednesday, September 23rd, 2009, overseas account holders must act quickly to voluntarily disclose their funds abroad to reduce their chances of criminal prosecution.
Over Labor Day weekend, a member of the wealthy and privileged elite, Finn M. W. Caspersen, took his own life in the Shelter Harbor Golf Club in Rhode Island. Authorities believed that Caspersen may have owed up to $100 million in back taxes and IRS penalties, and may have even faced prison time.
Whether Caspersen really owed the government that much money or not is not clear, but it is unfortunate when someone chooses to end their life over IRS tax problems. IRS debt can seem overwhelming and can sometimes seem like the end of the world–I’d like to remind you that for every IRS tax problem, there is a IRS tax solution. You are entitled to professional tax help–don’t let your tax problems cripple your financial future.
According to the NYTimes.com, “The I.R.S. learned that Mr. Caspersen held an account at LGT, the private bank controlled with Liechtenstein’s royal family. Liechtenstein pledged last December to disclose the names of some wealthy Americans with bank accounts there, but it was unclear if Mr. Caspersen’s name was among them or how the I.R.S. learned of any account in his name. According to the person familiar with the investigation, federal authorities recently placed tax liens on the personal trusts of Mr. Caspersen’s four sons.”
The latest IRS crackdown on the use of offshore bank accounts by wealthy Americans led to the UBS deal where the big Swiss bank divulged the names of nearly 300 of its American clients in February and agreed to hand over several thousand more last month.
For those who owe back taxes on their money abroad, it’s important to act now before the Amnesty Period ends next Wednesday. By partaking in voluntary disclosure, you will pay a significantly less amount of IRS penalties than what you will owe if you wait to be caught. For instance, if you have one million dollars offshore – that will equal to about $400,000 in IRS penalties in interest. If you don’t do the voluntary disclosure the penalties jump to 2.3 million on a $1 million asset. Additionally, not voluntarily disclosing your foreign bank account will expose you to possibly severe criminal charges. (If you participate in voluntary disclosure before September 23rd, your chances for criminal prosecution will be greatly reduced.)
It is unwise to take your chances of not getting caught by sitting this wave out, voluntary disclosure is a good way for those who owe back taxes for their foreign bank accounts to seek IRS penalty relief. Act now before the September 23rd deadline to save your financial future before it’s too late!
Tax Resolution Services works with clients on voluntary disclosures – so if you owe back taxes or interest/penalties on offshore accounts, we can help. Don’t wait for IRS to come after you, we can help you resolve your IRS problems before it’s too late. Can contact our team of experts for afree consultation. Call us at 866-IRS-PROBLEMS (1-866-477-7762) or visit our website at www.TaxResolution.com
Auto dealers across the nation have been benefiting from the “Cash for Clunkers” stimulus program–selling more fuel efficiency cars in exchange for fuel-guzzling “clunkers.”
Not only are average consumers loving the $4,500 non-taxable cash vouchers from trading in their old cars for new ones, auto dealers can also benefit above and beyond the mere increase in sales. In order to auto dealers to save money and avoid serious IRS tax problems, they must accurately account for the taxability of the credit amount they receive from the “Cash for Clunkers” program.
Auto dealers are required to include the full amount of the auto stimulus voucher in addition to any value left from the traded-in “clunkers” as a part of the dealership’s income. Fortunately, dealerships can offset regular and additional business expenses from participating in the program–such as the cost of disposing of the “clunkers.”
The best way for auto dealerships to ensure that they receive the full amount of their tax deductions is to keep clear and consistent documentation of all transactions including gross receipts from the sales of new vehicles and any expenses incurred. Proper record keeping will help any business or individual get the tax help they need while making sure they avoid additional IRS penalties.
If you find yourself in IRS trouble, you are entitled to get professional tax help. You can get help from our specialized staff of tax attorneys, CPAs, EAs and tax professionals at TRS. VisitTax Resolution Services for a free income tax relief consultation or call us at 866-IRS-PROBLEMS (1-866-477-7762).
Tax evasion is tempting – especially when you are a business owner and the money is flowing in. Who doesn’t want to live a luxurious lifestyle by evading taxes and pocketing the extra money, like the story below of this man from Rhode Island. But what about his spouse? Is she an innocent spouse eligible for tax relief?
A Rhode Island man pleaded guilty to tax evasion and bankruptcy fraud after admitting he failed to pay $2.1 million in employment taxes for his two construction companies from March 2005 to July 2006.
Steven Allard, 47, of Scituate, R.I., also admitted that in October and November 2005, he made false statements in a personal bankruptcy petition and during the bankruptcy creditor’s hearing, in that he failed to disclose his ownership of real property in Warwick, R.I.
Instead of paying the employment taxes, Allard used funds from his companies for the benefit of himself and his wife and by diverting funds from the companies to Eaglewood Realty for the purchase of luxury automobiles. He faces up to five years in prison and a fine of up to $100,000.
In my industry, I see many cases where taxpayers could avoid or reduce IRS penalties if they provide sufficient documentations that substantiate their business deductions.
Upon IRS request, you must have sufficient documentation to prove the legitimacy of your tax deductions in order to avoid tax evasion charges. If however, you are unaware of illegal deductions that your spouse made on your joint tax return, you are eligible to file for Innocence Spouse (again, with sufficient proof in favor of your position).
Recently, the IRS imposed tax penalties on a couple who failed to provide sufficient documentation to support their business expense deductions. The wife was able to prove her lack of involvement in the case and thereby received partial Innocent Spouse relief.
CCH (http://tax.cchgroup.com) reports:
Couple Fails to Substantiate Deductions; Penalties Imposed; Innocent Spouse Relief Partially Applied to Penalties
A doctor and his wife, who filed jointly, failed to produce business records, documents, or other evidence sufficient to sustain deductions claimed for an emergency room physician business, horse training and related sales activities, interest expenses, or legal and professional services expenses. The horse training and related sales activities did not meet the threshold standard for an activity engaged in for profit under Code Sec. 183 because the taxpayers failed to produce credible evidence sufficient to demonstrate that they maintained detailed and contemporaneous records for those activities, conducted the activities in a businesslike manner, or had the requisite intent to make a profit from those activities; accordingly, deductions under Code Sec. 162 were not allowed.
The taxpayers also were liable for additions to tax under Code Sec. 6651, and an accuracy-related penalty under Code Sec. 6662. They presented no evidence regarding their failure to file their tax returns or their substantial understatement of tax. Equitable relief applied under Code Sec. 6015 to relieve the wife from liability for penalties with respect to tax deficiencies stemming from the husband’s emergency room physician business because she had no substantial involvement in that business and did not assist in maintaining its business records during the years at issue. Further, there was no evidence that the family’s lifestyle changed; therefore, she had no reason to know that the deductions her husband claimed were erroneous.
T.L. Phemister, TC Memo. 2009-201
It’s important for you to know what tax deductions you are entitled to and what records you need to keep in order to prove the legality of your deductions. If you think that you may have wrongfully deducted some expenses or if you are expecting an IRS audit, I strongly encourage you to get expert tax help from a tax attorney to reduce your penalties.
You can get help from our specialized staff of tax attorneys, CPAs, EAs and tax professionals at TRS. VisitTax Resolution Services for a free income tax relief consultation or call us at 866-IRS-PROBLEMS (1-866-477-7762).
Recently I blogged about my guest appearance on Fox Business News talking with Brian Sullivan about the latest IRS collection efforts and how taxpayers need to know how to avoid and resolve back taxes in order to secure their financial future.
In the current tax climate, the US Government is hard-pressed for funding in order to pay for programs such as the $800 billion stimulus package, the “Cash for Clunkers” program, and a possible overhaul of the health care bill. Since the government has not been paying for these programs with current taxpayers’ money, it has turned to collect from non-filers, delinquent taxpayers, and tax cheats with increased aggression.
In tricky times like these, it’s important for taxpayers (especially those who owe back taxes) to be informed. Here are some common mistakes that people make when facing IRS tax problems:
Believing the IRS Forgives “Honest Mistakes”
For those who have experienced unusual circumstances (such as a death or serious illness of a loved one or natural disasters like wildfires) and as a result of these unexpected situations, failed to pay back taxes, are more likely to get penalty relief from the IRS. The IRS is the most brutal collections agency on the planet–always has been and always will be. There is no “honest mistake” in the IRS eyes that will dissolve any one taxpayer’s back taxes. However, if you choose your words correctly and pick a good tax expert to represent you, you could reduce your IRS penalties substantially.
Talking Too Much Can Get You in Deeper IRS Trouble
Another one of the biggest mistakes taxpayers make is to talk too much to the IRS representative or agent over the phone (or in person). The IRS auditor will oftentimes appear nice enough that you become “comfortable” to talk about your IRS issues. This is misleading; half of the referrals to criminal investigation comes from IRS auditors that appear “nice” but are actually schmoozing to get incriminating evidence out of your chatter.
Not Knowing Your Rights as a Taxpayer
Taxpayers need to know that they are protected under the Taxpayer’s Bill of Rights (signed into law in 1998 by Clinton) that acts like the Miranda Rights. Taxpayers are not at all obligated to speak to any IRS officer or agent until they want to–or until their representation takes over the communications with the IRS for them.
As soon as you are notified by the IRS for back taxes, delinquent tax returns, or IRS penalties, you are walking a long legal road on “egg shells.” If you owe more than $15,000 in back taxes, you will need professional tax representation (tax attorney, CPA, or certified tax resolution specialist) to help fight your case against the IRS.
Baseball superstar, “Miracle Met” Jerry Koosman went from being cheered by his fans to being escorted by the police to jail for not paying his back taxes for the years 2002-2004.
Between Koosman’s Major League Baseball pension, autographs, public appearances, and selling his stocks, he made around $754,950 over those years, out of which $80,000 belonged to the government.
In May, Koosman pleaded guilty to IRS tax evasion charges. “Like most people in their sixties, I’ve made some bad decisions in my life,” he said. U.S. District Court Judge Barbara Crabb reduced his sentence from one full year in prison to half a year with one year of supervised release. Koosman realizes that the bad publicity to his well-earned reputation is not worth the exuberant sum of back taxes.
If you have back taxes, you need to resolve them now before it gets to be even more overwhelming. You have the option to work out an IRS payment plan or get a penalty abatement. Either way, any action is better than no action. Being proactive about solving your IRS tax problems is the first step to financial well-being.
Recently I was a guest on Fox Business News with Brian Sullivan to talk about the latest increase in IRS enforcement and how taxpayers and small business owners can protect their financial well-being by seeking professional tax representation.
With the government struggling for funds to pay for economic stimulus plans such as the “Cash For Clunkers” program and the $800 billion stimulus package, the IRS is under high pressure to collect back taxes from people who have not paid their dues in full. Since the government has not mandated regular taxpayers to pay for these expensive programs, the IRS is going after delinquent taxpayers, non-filers, and tax cheats to help foot the bill.
For the regular taxpayer, this means they need to be extra careful about getting into IRS debt while the IRS grows more aggressive on tax collection. Honest mistakes can happen (death in the family, inexperienced tax accountant/adviser); as long as the taxpayer keeps a solid record that will prove a strong case against the IRS charges, they are more likely to receive a penalty abatement.
If however, you find yourself in trouble with the IRS, it is extremely important that you refrain from talking too much to the IRS in order to prevent unconsciously incriminating yourself. Many people don’t realize that by speaking freely to an IRS agent about their charges, they could be adding evidence to the record that do not help their cases.
This Wednesday, I will be appearing as an expert guest on Fox Business News to talk about some of the pressing tax problems taxpayers are facing due to the recent surge in IRS enforcements.
Please tune in to Fox Business News tomorrow morning, September 2nd, at 8am to learn how you can protect your financial future by staying informed of your tax obligations as well as how you can save money from legal tax breaks (such as the first-time homebuyer’s tax credit.)
The current IRS tax climate is troublesome for some taxpayers who may find themselves under scrutiny by the IRS even when they are innocent. It is extremely important to stay informed and understand your rights to a tax attorney’s representation when fighting against the IRS. In my morning show tomorrow, in addition to talking about tax breaks like the first-time homebuyer tax credit, I will be sharing my expertise on IRS penalties and the tax implications of the health care bill. For taxpayers who want to learn more about the current tax climate to protect their financial well-being, this show is for you!
If you are unsure about how to handle your current tax problems, it will benefit you to tune in to learn various ways that you can ameliorate your IRS penalties and back taxes. I am a tax resolution specialist. My team of tax attorneys and CPAs deal with tax problems on a daily basis.Contact us today for a free tax relief consultation to see how we can help you reduce your IRS penalties today.
News, commentary, insight, tips and humor from tax expert Michael Rozbruch
Michael Rozbruch is a Certified Tax Resolution Specialist, a member of the American Society of IRS Problem Solvers and a Maryland CPA.
IRS PROBLEMS?
If you find yourself in trouble with the IRS and need professional tax attorney and tax resolution services, call (888) 699-7630. Effective tax negotiation and representation means that your tax attorney, Certified Tax Resolution Specialist or CPA will take over all communications with the IRS, filing any delinquent tax returns to bring you to full IRS compliance while vigorously defending your rights as a taxpayer to permanently resolve your back taxes and IRS problems.
