Olympic Figure Skater Scores a Zero with Judge

John Baldwin, Jr, who represented the US in figure skating pairs at the 2006 Winter Olympic Games, was indicted with his father, John Baldwin, Sr. by a grand jury on failing to comply with financial reporting obligations from their used car business. Both father and son pled not guilty.

The indictment came after a federal investigation that lasted several years and included a raid on Baldwin Sr.’s home.

The government’s case centers around bank cash deposits from Baldwin Auto Sales. The indictment states that the pair made regular cash deposits under $10,000, which is known as “structuring” as that dollar amount is below the threshold of a bank’s obligation to report the transaction.

According to the government, Wells Fargo Bank shows 194 transactions under $10,000 for a total of $1,060,029. The Baldwin’s state that they have been making the same deposits for years as a majority of their car sales are under $10,000 and 60% of those sales are in cash, and most of their deposits are done at the ATM which only accepts deposits of up to $5,000.

Several plea deals have been offered to the Baldwins’, but they state, “This is extortion from the government, trying to steal money from legitimate citizens knowing that these legitimate citizens just want this to go away…They’ve tried to intimidate us, they’ve harassed us. Now they’re trying to hold us hostage by trying to make deals with us.  If you do this and do that, we won’t take you to court.  The answer is no.”

Nail Salon Supplier Will be Polishing Up Her Act In Prison

Mythi Nguyen, of Troy, MI pled guilty in District Court to charges of filing a false tax return.

Nguyen owned Y & B Nail Supply located in Madison Heights, MI.  From 2009 to 2011, Nguyen underreported her income by more than $1.1 million in gross business sales.  The underreporting caused a tax loss to the IRS of $272,680.72.

Nguyen will be sentence on September 13, 2018 where she could face a maximum prison sentence of three years, supervised release, restitution and monetary penalties.

Embezzled Money Must be Reported on Your Tax Returns

New York Attorney Steven Etking was charged in District Court of NY on counts of conspiring to defraud the United States, corruptly endeavoring to impede the internal revenue laws and tax evasion.

Etkind was a partner and the head of a New York law firm’s tax, trust and estates group and also a certified public accountant.  According to the indictment, Etkind was named co-executor of a successful entrepreneur client who died in 2008 with an estate valued at over $35 million.

The client’s “will” directed the creation of charitable trusts for the sole purpose of donating money from his estate to the charitable organizations. Etkind and a currently unnamed co-conspirator originally directed donations to legitimate organizations, and then set-up phony charities in which he was named co-trustee and used these to steal more than $3.5 million from the estate. Etkind used part of the money he stole to purchase a 6,300 square foot home in the name of someone else.

To cover his theft, Etkind filed false personal, corporate and charitable trust tax returns with the IRS and made false and misleading statements to the IRS during an audit and examination.

If convicted, Etkind faces a statutory maximum sentence of five years in prison on the conspiracy charge, five years for each count of tax evasion and three years for obstruction.

The IRS has come looking for Courtney Love again…

The former star, actress, and widow of Nirvana singer, Kurt Cobain, is used to being on Uncle Sam’s bad side. Starting from her early days as a grunge rock star, Love’s many infractions include drug abuse, assault, failing to make court appearances, and one public outburst that led to her being banned from Virgin Airlines by founder Richard Branson. Between all these wild episodes, Love has also clashed with the IRS over unpaid taxes on three separate occasions.

While the media doesn’t go into a frenzy over tax liens like they do drunken bar fights, the amount Love owed would get anyone to sit up and pay attention. A tax lien from early 2018 indicates Love owes the IRS over $568,000 in unpaid taxes from 2016. This came just three months after Love paid around $320,000 for unpaid 2012 taxes, and less than two years after she handed the IRS $266,000 for taxes she failed to pay for 2009 and 2011.

“I know that’s a lifetime of money to most people, but I’m a big girl,” she explained. “It’s rock ‘n’ roll, it’s Nirvana money, I had to let it go. I make enough to live on I’m financially solvent, I focus on what I make now.”

Love sounds optimistic, but at this point, the IRS probably has her on speed dial. Hopefully Love will understand that it doesn’t matter how much money you make – if you fail to pay your taxes, you will end up in a world of hurt.

Funny Tax Quote

“The U.S. Senate is considering a bill that would tax Botox. When Botox users heard this, they were horrified. Well, I think they were horrified. It’s difficult to tell.”

– Craig Ferguson

Your IRS Questions Answered Here…

Question: I owe a lot in back taxes. I’m constantly getting threatening letters from the IRS. This has become a big problem that I have no idea how to solve.  Can you help me?

Answer:  For what it’s worth, take some comfort in knowing that you are not alone. There are millions of Americans in similar situations, dealing with debt hanging over their heads and concerned about how it will affect their future.

The good news: You have many options.  To fully understand and take advantage of your options, we urge you to see a qualified tax resolution professional. He or she will take a close look at your previous returns, looking for mistakes that may have resulted in an inflated tax debt amount.  This process alone can substantially lower your IRS debt.

Once you and your qualified tax professional have analyzed your previous returns, the next step is to negotiate a resolution with the IRS.  You will most likely be looking at one of two options – the Offer in Compromise or the Installment Agreement.

The Offer in Compromise was created for people who owe a substantial amount to the IRS but who, for whatever reason, are unable to pay their tax debt off, even over time. The Offer in Compromise allows taxpayers to negotiate a settlement amount that will take care of the entire tax debt once and for all. This settlement agreement can lower the tax debt by a significant amount.  If you do not qualify for the Offer in Compromise – and to do so you must be able to prove eligibility – then you may consider the Installment Agreement, which allows you to pay off your debt by making manageable monthly payments.

Top Tax Crime Prison Sentences for 2017

  •  In July 2017, a Watertown, NY restaurateur was sentenced to 150 months in prison for tax evasion and investment fraud. He engaged in a scheme to evade more than $4 million in taxes and obstruct the IRS.
  •  In October 2017, a Grand Junction, CO business owner was sentenced to 88 months in prison for tax evasion and failing to file corporate and individual tax returns.  He had not filed a personal tax return since 1992 and had not paid individual income taxes since 1993.
  •  In July 2017, a Potomac, MD doctor and entrepreneur was sentenced to 119 months and 29 days in prison for defrauding his former company’s shareholders and for failing to pay more than $7.5 million in employment taxes.
  •  In October 2017, a Boynton Beach, FL resident was sentenced to 30 months in prison for obstructing the IRS.  He filed fraudulent personal tax returns with the IRS that sought more than $5.6 million in fraudulent refunds, of which the IRS paid more than $485,000.
  • In January 2017, a St. Louis, MO tax return preparation business owner was sentenced to 27 months in prison for tax evasion.  He underreported his businesses’ gross receipts by over $1.5 million and evaded over $580,000 in tax.
  • In July 2017, a Fort Meyers, FL businessman was sentenced to 57 months in prison for conspiring with investment advisors to hide money in offshore bank accounts. He used secret numbered bank accounts and foreign shell companies to hide millions of dollars in order to evade more than $728,000 in U.S. taxes.
  • In July 2017, a Loveland, CO businessman and delicatessen owner was sentenced to 24 months in prison for conspiring to file fraudulent claims for tax refunds. He conspired with his return preparer to file three tax returns that claimed more than $1 million in bogus refunds, of which the IRS paid $350,765.  He spent the funds on precious metals and coins, jewelry and luxury travel.

Escort Service Business Owner Tries to “Trick” the IRS

Dennis Zarudny of Miami, FL pled guilty to filing a false tax return in court for the Southern District of Florida.

Zarundy, owner of Denzar, Inc, which operated under the business name of “Elite Escort Service”, advertised his business on the internet as a “prestigious escort agency providing 24-hour outcall escort services & adult entertainment for upscale gentlemen and couples in South Florida.”

Zarudny not only filed a false individual tax return for 2012, but also filed false corporate and personal returns for the tax years 2011 through 2014.  Customers of the escort service were allowed to pay by credit card, checks or cash.  Zarudny reported all of the credit card transactions but did not report income received by cash or check.

Sentencing is scheduled for this month, where he faces a statutory maximum sentence of three years in prison, supervised release, monetary penalties and restitution.

The IRS Reports a Surge in Email Phishing Schemes

Phishing is a scam where fraudsters send email-messages to trick unsuspecting victims into revealing personal and financial information that can be used to steal the victim’s identity. To trick taxpayers into thinking the emails come from the IRS, they use the actual logo, so victims think it’s an official communication.  These emails contain various scare tactics, and they ask the person to confirm personal information and verify their PIN information.

According to a recent press release the scammers are at it again. The IRS is advising Taxpayers to be weary of a new scam aimed at obtaining taxpayer banking information. See the press release below:

IRS warns of variation of Form W-8BEN scam; crooks impersonate IRS to get banking and other information

Washington – The Internal Revenue Service today warned of a new twist tied to an old scam aimed at international taxpayers and non-resident aliens. In this scam, criminals use a fake IRS Form W-8BEN to solicit detailed personal identification and bank account information from victims.

Here’s how the scam works. Criminals mail or fax a letter indicating that although individuals are exempt from withholding and reporting income tax, they need to authenticate their information by filling out a phony version of Form W-8BEN, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting. Recipients are requested to fax the information back.

The Form W-8BEN is a legitimate U.S. tax exemption document, however, it can only be submitted through a withholding agent. In the past, fraudsters have targeted non-residents of the U.S. using the form as a lure to get personal details such as passport numbers and PIN codes. The legitimate IRS Form W-8BEN does not ask for any of that information. The phony letter or fax also refers to a Form W9095, which does not exist. Furthermore, the IRS doesn’t require a recertification of foreign status.

Scam variations

Be alert to bogus letters, emails and letters that appear to come from the IRS or your tax professional requesting information. Scam letters, forms and e-mails are designed to trick taxpayers into thinking these are official communications from the IRS or others in the tax industry, including tax software companies. These phishing schemes may seek personal information, including mother’s maiden name, passport and account information in order steal the victim’s identity and their assets.

Note that the IRS does not:

  • Demand that people use a specific payment method, such as a prepaid debit card, gift card or wire transfer. The IRS will not ask for debit or credit card numbers over the phone. For people who owe taxes, make payments to the United States Treasury or review IRS.gov/payments for IRS online options.
  • Demand immediate tax payment. Normal correspondence is a letter in the mail and taxpayers can appeal or question what they owe. All taxpayers are advised to know their rights as a taxpayer.
  • Threaten to bring in local police, immigration officers or other law enforcement to arrest people for not paying. The IRS also cannot revoke a license or immigration status. Threats like these are common tactics scam artists use to trick victims into believing their schemes.
    Taxpayers who receive the IRS phone scam or any IRS impersonation scam should report it to the Treasury Inspector General for Tax Administration at its IRS Impersonation Scam Reporting site and to the IRS by emailing phishing@irs.gov with the subject line “IRS Impersonation Scam.”

Taxpayers who receive the IRS phone scam or any IRS impersonation scam should report it to the Treasury Inspector General for Tax Administration at its IRS Impersonation Scam Reporting site and to the IRS by emailing phishing@irs.gov with the subject line “IRS Impersonation Scam.”