IRS Reels in Fisherman—Hook, Line & Sinker

Billie Schofield of Scituate, RI was indicted by a federal grand jury in March, 2018 on charges of corruptly endeavoring to impede the internal revenue laws, tax evasion and perjury.

Schofield, who worked for several fishing companies from 2005 to 2016, earned several hundreds of thousands of dollars in income during that time, but in an effort to evade paying taxes, hid his incomes by depositing the funds in nominee’s accounts and filing false income tax returns.

The IRS placed a lien on his house in which Schofield attempted to pay off with bogus checks, and prevented the delivery of levy notices to his employers.  In February, 2018, Schofield gave false testimony before a grand jury in response to questions about checks that were drawn on a closed bank account and submitted to the IRS.

If convicted, Schofield faces a maximum sentence of five years on the tax evasion and perjury charge, with an additional three years for obstruction of the internal revenue code, a period of supervised release, restitution and monetary penalties.

Attorney Gets Barred in Tax Scheme

An attorney from Southwest Ranches, FL , Michael Meyer, has been handed a civil complaint filed by the US to permanently bar him from providing federal tax advice because of his alleged tax scheme that he marketed to financial planners and CPAs.

It’s alleged that Meyer, an attorney licensed in Kentucky and Indiana, advised participants to claim unwarranted charitable donations to three bogus charities that he controls.  The donations are made on paper only and no money was ever donated.  Some of the “contributions” were backdated promissory notes and fabricated intellectual property.  It’s also alleged that Meyer prepared baseless appraisals and false federal tax forms to facilitate the scheme.

The complaint also alleges that Meyer misrepresented himself as a licensed CPA and Certified Valuation Analyst.

The United States Treasury is seeking to recover the more than $35 million it claims to have lost in Meyer’s scheme

Interesting Facts From the IRS

 

  •  The IRS has instructions for employees on how to collect taxes after a nuclear war.
  •  According to the IRS Rules, hair donations to organizations such as Locks of Love are not tax deductible as hair is considered to be a bodypart and just like blood donations, they are not tax deductible.
  •   If you rob a bank, the IRS requires you to pay taxes on the stolen money.
  •   The lowest number ZIP code is 00501, which is for an IRS center in NY.
  •   There is an Atari 2600 game called Tax Avoiders and it was conceived by a former IRS Revenue Agent.
  •   The goodie or “swag” bags given to the guests at the Academy Awards are so expensive that the IRS categorizes them as taxable income.
  •   The IRS ranks higher than Comcast in terms of customer satisfaction.

Willie Nelson released an album in 1992 specifically to pay off his debts to the IRS, entitled, ‘The IRS Tapes:  Who’ll Buy My Memories?

IRS Terror Tale of the Month

Divorce can be messy, but when you live in the limelight, all that drama ends up in the public for everyone to see. In June 2016, Lisa Marie Presley, the only daughter of Elvis Presley, filed for divorce from her husband, Michael Lockwood. Lockwood demanded Presley pay his $450,000 in legal fees and provide $22,000 in monthly spousal support. In February 2018, a judge gave Presley 30 days to pay $100,000 of Lockwood’s legal fees. The rock’n’roll heiress claimed she would be unable to do so because she was in debt for over $16.7 mission. However, the biggest source of Presley’s debt is the $10 million she owes the IRS in unpaid taxes from 2012-2015.

In addition to hundreds of thousands of dollars in credit card bills, courts documents show Presley defaulted on the mortgage of the $6 million home she owns in the United Kingdom. This is shocking news, considering Presley inherited her fathers $100 million estate in 1993 when she turned 25. Today, Presley claims the fortune has dwindled to $14,000. She’s claimed that her financial distress is primarily due to the “reckless and negligent mismanagement and self serving ambition” of her former business manager, Barry Siegel.

Presley is not the first celebrity to owe big bucks to the IRS or blame the loss of their fortune on poor money management. In 2009, actor Nicolas Cage sued his former business manager for alleged mismanagement that cost him millions. However, regardless of who is to blame for the poor management of the Presley estate, Lisa Marie is still expected to pay off the debts and answer to the IRS for her unpaid income taxes.

MC Hammer who filed for bankruptcy in 1996, has faced similar tax problems. He might be known for singing, “U Can’t Touch This,” but the IRS thinks differently; they sued him for back taxes owed.

Moral of the story: It doesn’t matter if you’re rich or poor, a commoner or a celebrity. If you don’t pay what’s owed to the IRS, they will find you, and you could end up in “Heartbreak Hotel.”

Owner of Catholic Online Website Thinks Charity Begins at Home (His)

Michael Galloway of Bakersfield, CA, who owned and operated one of the oldest websites on the Catholic internet, Catholic.org, was convicted on four counts of tax evasion by a jury in March 2018.

The Catholic Online website solicited donations to help the victims of the 2004 Indian Ocean Tsunami and Hurricane Katrina. It was shown in court that Galloway used some of those funds for personal and business expenses, including his homeowner’s association fees on his personal residence, car payments, insurance, utilities, cable services, tile work and personal legal fees. Galloway did not report any of the money taken from the charities as income on his personal tax returns.

It was found that Galloway had underreported his income between 2003 and 2006 by at least $671,755, and one year Galloway reported an income of less than $30,000 a year although he lived in an $850,000 house.

Sentenced is scheduled for June 18, 2018 where he could receive a maximum statutory sentence of five years in prison and a $100,000 fine.

A Must! Read Your Return Before Filing

A Denver, CO woman found out the hard way that you MUST read your tax return before your tax preparer sends it out electronically.

Andrea Dean waited to receive the nearly $6,000 she expected from her return to show up in her bank account. Unfortunately, her friend who is an attorney put the wrong bank account number on the tax refund portion of the electronic filing form.

The IRS states that once a taxpayer signs a return, it’s final.

It’s up to the taxpayer to approve all items on the return before it’s submitted to the IRS.  The only recourse the taxpayer has is to initiate a civil case to settle the loss. Only if fraud is suspected will the IRS investigate.

No one has come forward to report the unexpected deposit.

Airplane Broker Tries to Slip Under the IRS’s Radar

A resident of Pompano Beach, FL, Timothy Beverley was sentenced to 90 months in prison for filing fraudulent tax returns, wire fraud and filing false monthly reports with the U.S. Probation Office.

From 2010 to 2013, while working as an airplane broker at Majestic Jet, Inc., Beverley would direct the airplane escrow agents to wire funds from the sale of planes to nominee accounts that he controlled.  It was shown in court that the amount Beverley stole during this time was over $2.2 million. In addition, Beverley stole funds directly from the business bank accounts of Majestic and used the funds to pay for his personal expenses, including his boat and rent.

Beverley did not disclose these stolen funds on his 2010-2013 personal income tax returns.

While working at Majestic, Beverley was on supervised release for a 2004 federal conviction for money laundering.  Part of his conditional release required him to file monthly reports with the U.S. Probation Office that listed his net earnings from his employment.  Beverley failed to report the stolen funds on his reports.

Beverley’s sentencing included three years of supervised release as well as payment of restitution to the U.S. Treasury in the amount of $634,906.

Things are not Smelling Rosy for Florist Couple

The owners of an internet floral business, Andrew Bassaner and his wife, Vicki Bunchuk of PA were convicted in February, 2018 for failing to pay employment taxes to the IRS as well as filing fraudulent personal and corporate tax returns.

Evidence presented at trial showed that from the years 2010 to 2012, the couple diverted funds from their business, Florist Concierge Inc. (FCI) by writing the funds off as business expenses on FIC’s corporate tax returns and not reporting it as income on their personal returns. Instead, they used the money to pay for luxury items including $17,000 a month rent for a home in Florida.  From 2011 through 2014 the couple also falsely claimed that their employees were independent contractors which allowed them not to pay any employment taxes on their wages.

The couple will be sentenced in District Court on June 27th and could face a maximum sentence of five years in prison for each employment tax count, three years for each count of filing a fraudulent tax return as well as supervised release, restitution and monetary penalties.

Your IRS Questions Answered Here…

Question: I just received a letter form the IRS informing me they want to audit my 2015 income tax return. I really didn’t need this right now. What should I do?

Answer: First, take a deep breath knowing there is expert help available to you. As part of the IRS’s audit process they’ll ask you dozens of very innocent sounding questions, however many of these can be invasive as well as intrusive.  The answers to which can “seal” your fate with the IRS auditor. But there is a “right way” to answers these questions. The IRS’s mission is to determine the accuracy of your tax return and they will leave no stone unturned to accomplish this.  We have found that many taxpayers who decide to handle an IRS audit themselves wind up with a substantial bill owing the IRS thousands of dollars. Auditors are trained to obtain information from you that in a lot of cases is not required under the law. They get away with this because most people fear them and don’t know their rights.

Our clients generally NEVER meet or speak with the IRS. We handle everything for you so you don’t have to take time away from your job or business to deal with all of the IRS’s paperwork. Simply forward your audit letter to us and we’ll handle the rest.   Don’t let them walk all over you. We know the law.  We know your rights. We can help!

Dentist Gets Caught Filling her Pockets with Cash by the IRS

Andrea Henry of Shelby County, TN was sentence to serve 12 months in prison on charges of evading payment of taxes.

Henry was the owner of 2 dental practice locations and it was shown that although she filed her 2005, 2006, 2008, 2010 and 2013 returns, she failed to pay $113,781 in income and self-employment taxes.  Henry also failed to pay the employment taxes withheld from her employee’s paychecks for several quarters from 2005-2015.  The IRS assessed trust fund penalties in excess of $160,000.

Instead of paying her taxes, Henry spent the money on personal expenses including private school tuition, expensive housing and luxury cars.

Once the IRS assessed penalties again Henry, she stopped using her personal bank accounts and used the business account instead to pay personal expenses, including a Dodge Viper and Porsche Panamera.
In addition to jail time, Henry must serve three years supervised release and pay restitution in the amount of $653,116.78 to the IRS.