Man Claims He Didn’t File Tax Returns Because of the Bible

James Schlosser of PA was convicted of failing to file tax returns for 21 years because he considered using a Social Security number akin to using the “mark of the beast” spelled out in the Bible.

Schlosser failed to file returns from 1994 to 2014 on his earnings of approximately $2.3 million as a medical equipment salesman.  The prosecution showed he funneled the income through foreign business trusts and corporations registered in Nevada.

Schlosser could face 5 years in prison and $450,000 in fines.

Your IRS Questions Answered Here…

Question: I own a small business and in order to keep afloat, I did not send the IRS my employee’s withholding taxes for a few years.  How much trouble will I be in?

Answer: Owing 941 payroll taxes is very different from owing personal income taxes. Not only can the IRS padlock the doors to your business, they can come after you personally, levy your bank accounts, confiscate your receivables and seize your property.  Scarier still is that it could turn into a criminal matter.  Why? Because the money has already been deducted from your employee’s payroll checks; so it’s not your money to begin with! The IRS will look at it as if you stole their money. Payroll tax delinquency is the IRS’s number one enforcement priority.

You need to get help from an experienced professional who deals with the IRS every day.  We can assess your situation and figure out the best way to protect you, and will take over all dealings with the IRS so you don’t have to.  Don’t let them take everything you’ve worked so hard for; call us today!

Weird State Tax Facts

-Alabama-Residents still pay a Confederate veterans tax, despite the fact that all Civil War veterans are long dead. Nowadays the tax supports the Confederate Memorial Park.

-Arkansas-Charges a 6% tax on body piercings, tattoos and electrolysis.

-South Carolina-Any meat packer or butcher in the state can get a $50 rebate by donating a deer carcass to charity to be used to feed the hungry.

-Arizona-Ice cubes are exempt from sales tax because they are used in mixed drinks.  Blocks of ice are not.

-New York-There is no tax on the sale of whole bagels, but an 8.875% tax is charged if you get it sliced.

-Illinois-Candy made without flour, such as Twix is not taxed. If candy is made with flour, such as Snickers, it’s taxed at 5%.

-Missouri-Single men between the ages of 21 and 50 must pay a $1 annual tax. The law was enacted in 1820 to encourage more men to marry.

-Colorado-Coffee cup lids are taxed at 2.9%, but not the coffee cup itself.

-Utah-Since 2004, Utah charges a 10% tax on escort services and strip clubs.

-Hawaii-Residents can claim up to $3,000 in personal income tax deductions for maintaining “exceptional” trees on their property.

-New Jersey-Pumpkins that are sold as decorations are subject to sales tax. If you plan to eat the pumpkin, the sale is tax free.

Fried Chicken Restaurant Owners Take a Lickin’ From the IRS

In a superseding indictment, three restaurant owners were charged with 18 counts of conspiracy and willful failure to pay taxes.

Hazrat Khan and Kurshed Iqbal, both from Boston, MA were initially indicted in April 2016 and the superseding indictment added Rahman Zeb, also of Boston to the charges.

The defendants owned two Crown Fried Chicken restaurants as well as the New York Fried Chicken Restaurant.  It’s alleged that Khan and Iqbal took steps to conceal their ownership in two of the stores and provided tax preparers with false information regarding payroll and income, causing the preparers to file false returns. Khan and Zeb used a similar scheme for the third restaurant.

To avoid paying payroll taxes, all three are alleged to have falsely reported the number of employees, many who were undocumented workers, and wages paid to the IRS.  It’s also alleged that they paid their employees under the table and filed false tax returns with the incorrect amount of sales, total income, compensation of officers, salaries and wages and taxable income.

If convicted, Khan, Iqbal and Zeb face up to five years in prison for conspiracy, a fine of $250,000 and restitution.  On the charge of willful failure to pay taxes, the court could impose a maximum sentence of five years in prison, an additional fine of $250,000 and three years supervised release.

Interior Designer Redecorates his Tax Returns

The owner of a Kirkland, WA, interior design firm, Daniel Nix was indicted in April, 2017 on thirteen counts of tax evasion, eleven counts of providing fictitious financial obligation and one count of corrupt interference with the administration of the Internal Revenue code.

As alleged in the indictment, as early as 1998 and from 2000 to 2007, Nix refused to pay his income tax which totaled more than $340,000, using shell companies to hide his income, filed false bankruptcy claims and filed false claims against the government.

For the tax years 2010-2013, Nix again attempted to hide his income to avoid paying taxes.  Nix sent 11 fake money orders exceeding $1 million to the IRS in 2013 to make it appear as if he was paying his tax obligations.

Tax evasion carries a maximum prison sentence of up to 5 years and a $250,000 fine.  For presenting fictitious financial statements Nix can be sentenced to up to 25 years in prison and an additional fine of $250,000. Attempts to interfere with the administration of the tax code is punishable by up to 3 years in prison and a $5,000 fine.

Spa Owners Caught Massaging Their Income

Four family members from Queens, NY were indicted on charges of failing to pay more than $1.5 million in taxes. Steve Chon and his brothers Daniel Chon, Victor Chon and his daughter Stephanie Chon were charged with two counts of grand larceny in the second degree, eight counts of criminal tax fraud in the second degree and one count of criminal tax fraud in the third degree.

From the tax years 2010 to 2013, it’s alleged that the four failed to report millions in income to avoid paying the $1.5 million due in taxes.

If convicted, the four could spend anywhere between five and fifteen years in prison

Kingpin of U.S. Tax Scam Arrested in India

Upon arrival at Mumbai’s International Airport, Indian police arrested Sagar Thakkar, 24, also known as Shaggy, for being the mastermind behind a call center IRS scam that targeted thousands of Americans and netted more than $300 million.

In October 2016, the U.S. Justice Department charged more than 60 people in India with participating in the scam, where call center agents impersonated IRS employees or other federal officials and demanded payment for non-existent debt.

Call center operators would threaten their potential victims with arrest, imprisonment, deportation or hefty fines if they did not pay immediately.  They also told people to make their payment by prepaid debit cards, or to wire transfer money to accounts that were stolen or fake identities. Authorities have identified at least 15,000 people in the U.S who were targeted.

Following the arrests in October, Thakkar fled to Dubai and also spent time in Thailand. During that time it is alleged he led a lavish lifestyle, staying at five-star hotels and purchasing expensive cars.

The U.S. is working with India to have Thakkar extradited to the United States.

Tennessee Doctor and his Wife Plead Guilty to Long History of Filing False Returns

Jeffrey McCoy Jr. and his wife, Andra McCoy pled guilty to charges of conspiring to defraud the United States.  The McCoys admitted in court that from July 2002 through August 2014 they under reported their income and claimed fake income tax withholding amounts. In their 2003 return alone, they falsely claimed income tax withholding of $439,850. Their sentencing date has not been set, but face a statutory maximum sentence of five years plus monetary penalties.

New W-2 Phishing Scam Targets Schools, Restaurants and Hospitals

The IRS issued an alert in February 2017 that a W-2 phishing scam which used to be only in the corporate world has now evolved to other sectors, including schools, tribal casinos, chain restaurants, temporary staffing agencies and healthcare organizations.

The scam works like this: Cybercriminals use various techniques to disguise an email to make it appear as it is from an executive in the organization. The email is sent to an employee in the payroll or human resources department, requesting a list of all employees and their W-2 forms.

In some cases, the cybercriminal follows up with another executive email to the payroll department or comptroller and asks that a wire transfer to be made to a certain account.

IRS commissioner John Koskinen says, “This is one of the most dangerous email phishing scams we’ve seen in a long time.”

Interesting Facts About the IRS

-When the IRS tax form 1040 was first introduced in 1914, it had only 3 pages including instructions. Today, it has 101 pages of instructions.

-The IRS requires you to declare all sources of illegal income (i.e. embezzlement)—they can’t prosecute you for the activity, but they can prosecute you if you don’t report the income.

-In 2014, 35% of all calls to the IRS went unanswered by the IRS customer service division.

-The IRS has instructions for employees on how to collect taxes after a nuclear war.

-The IRS had to use a special computer to process Bill Gates’ taxes because “their normal computers can’t deal with those numbers.”

-The goodie “swag” bags given to guests at the Academy Awards are so expensive the IRS requires the guests to declare them as taxable income.

-The IRS website has over 1,977 different forms and publications, and the tax code is approximately 3.7 million words in length.

-The IRS can audit you up to 3 years after your taxes were filed and up to 6 years if you underreported your income by at least 25%. If you are suspected of fraud the limit is indefinite.