WARNING: IRS ANNOUNCES PLANS FOR PASSPORT REVOCATION FOR TAXPAYERS WITH DELINQUENT TAX DEBTS

The IRS recently announces that it plans to move forward with a passport revocation program for US citizens who have outstanding federal tax liabilities of more than $50,000.  Those taxpayers are now at a substantial risk of having their US passports revoked within the next few months.  The program also provided that US citizens living abroad may be forced to return to the US until the resolve their tax liabilities.

In December of 2015, Congress enacted legislation which requires the IRS to provide the State Department a listing of all taxpayers with “seriously delinquent tax debt.” (See Section 32101 of Fixing America’s Surface Transportation (the “FAST”) Act, Pub. L. 114–94).  That term was defined in the statute to mean a tax liability in excess of $50,000, including penalties and interest.  (See 26 U.S.C. § 7345(b)).  This new legislation give the State Department the discretion to revoke currently issued passports and enables them to refuse issuance of new passports. (See 22 U.S.C. § 2714A.).

Last week, the IRS announced that it would begin sending the State Department, within the next 30 days, IRS Letter 508C, notices of certification of seriously delinquent tax liabilities. These letters will indicate the taxpayer and their last known address.

In their announcement, the IRS indicated that the State Department would begin their actions within the next 30 days.  Taxpayers can avoid revocation or non-issuance of passport by reaching a formal agreement with the IRS.  It should be noted that the 2015 legislation significantly limits a taxpayers rights to appeal the State Departments decision on revocation or non-issuance.

 

 

CEO of Medical Device Companies Convicted of Tax Evasion

President and CEO of multiple medical device companies,  Briant Benson of  El Dorado Hills, CA was sentenced to 12 months and one day in prison for tax evasion.

From 2004 to 2006, despite receiving over $2 million in income, Benson failed to file tax returns or pay personal income tax to the IRS.

Instead of paying the Internal Revenue Service, Benson used the funds to support a lavish lifestyle, including purchasing multimillion dollars homes, buy hundreds of thousands of dollars in jewelry and furniture, and pay for lavish travel accommodations including luxury hotels, private jets and limousines.  Benson also used the funds to pay over half a million in gambling debts.

The failure to file resulted in a tax loss to the IRS in the amount of at least $249,000.

Sacramento County Woman Receives Sentence for Conspiring to File False Claims

An unlicensed tax preparer, Barbara Antonucci, was sentenced in December to three years, 6 months in prison and ordered to pay $1,895,833 in restitution after being found guilty of conspiring to file false claims with the IRS.

Antonucci and her co-conspirator Sherry Taggart, created a scheme in which to maximize refunds with the IRS.  They prepared and filed hundreds of returns between 2012 and 2014 seeking refunds totaling approximately $1.4 million.  Acting alone, Antonucci  filed additional false refund claims in which the IRS paid over $1.8 million.

The fraudulent returns included false wages and dependents and qualified their clients for the refundable Earned Income Credit when their true wages would not have qualified for the credit. They also list as wages self-employment such as “housekeeper” which is not documented by a W-2.  They obtained names and social security numbers of minors and falsely listed them as dependents on tax returns for their clients.

Antonucci and Taggart also filed many false claims on their behalf.

According to Michael Batdorf, Special Agent with the IRS Criminal Division, “it is very important for taxpayers to review their tax return with the tax return preparer to verify that it has been prepared correctly before it is filed with the IRS and ask questions when they do not understand what has been prepared.”

Pub Owners Plead Guilty to Tax Fraud

James and Mardeen Perin of West Des Moines, IA pleaded guilty to tax fraud charges.  Former owners of Sully’s Pub, the Perin’s admitted to failing to report cash earned from the business that was deposited into their personal bank accounts.  Sentencing is scheduled for April where they could face up to three years imprisonment.

Your IRS Questions Answered Here…

Question: I was self-employed and haven’t been able to pay my taxes for 3 years.  Now I’m a W-2 employee but I’m getting letters from the IRS demanding payment and threatening to garnish my paycheck. What should I do?

Answer:  The IRS doesn’t like being ignored and they want you to know they won’t go away. They have a lot of power over your life. They have 10 years to collect from the date you filed your return. Not only can they freeze your bank accounts and take the money, but they can garnish your wages and legally take as much as 75% of your net paycheck. The IRS can and will slap a lien on your house and other property as well. If you sell your house the IRS gets their money first before you do. Federal Tax Liens will damage your credit, making it harder to rent an apartment, get a car, obtain credit, and even get a job.  The IRS can even show up at your door!  Interest and penalties continue to accrue on a daily basis. You need professional expert help to deal with the IRS!  You can’t do this on your own. We offer immediate relief by protecting you from the long arm of the IRS. This is what we do on a daily basis.

H&R Block – Get Your Billions Back Scheme

Remember those commercials by H&R Block where they emphatically stated: “Get Your Billions Back America.”  Well several clients has posed the question, what does it really mean?  Well, their advertisement states that about 1 in 5 taxpayers who prepare a return themselves “leave money on the table by not claiming all of the tax credits and deductions for which they qualify.”  In our opinion however, we believe that getting part of your billions back was really a well intended marketing scheme in order for H&R to drum up new business in the preparation of old tax returns.

Pursuant to IRS rules you are only entitled to get a refund that’s up to three years old – this means that you can currently file back returns for 2015, 2014, and 2013 – if those returns yielded refunds – you would be entitled.  However if you were supposed to get a refund for the 2012 or any prior year and are just filing your return now – you would not be entitled to your refund.  (The 2013 return needs to be filed prior to April 15, 2017 to be refund entitled)

We often represent taxpayers who have not filed returns for several years and need to file their back returns.  It is not uncommon for us to represent a client who may have been entitled to refunds for several years and ends up losing those refunds because they negligently failed to file.  In one instance we recently represented a client who forewent over $50,000 in refunds over a 10 year period.

The IRS really only wants taxpayers to be “current and compliant.”  If you are a current client of our firm you will often hear us preach the necessity of being current and compliant.  “Current” means that you have filed all of your tax returns due, and “compliant” means that you either have proper withholding or are making estimated tax payments on a regular basis.

Now, if you don’t file a return and are due a refund, the IRS will not give you the benefit of a refund past the three year period.  However, if you were to owe money and didn’t file, the IRS may file a return on your behalf called a “substitute return” or an “SFR.”  The concept of an SFR is based off of the IRS computer which will calculate out tax due off of your Wage and Income Transcript to see whether you may owe tax.  The computer will then take into account a cost-benefit-analysis whereby it will determine whether the cost of pursuing the outstanding liabilities, or taxes, is outweighed by benefit of capturing the liability due.

 

If you have outstanding returns that have not been filed contact our office to schedule a free consultation.

IRS Terror Tale – Former Police Chief Does Crime & Time

When it comes to tax evasion, sometimes it’s the ones you least expect, like the most respected public figures, who try to weasel their way out of paying their income taxes.  Such was the case with a former Port of LA police chief.

In October, the LA Times reported the former police chief at the Port of Los Angeles, Ronald J. Boyd, was charged with federal tax evasion.  Upon the final verdict he could face a two-year prison sentence.  The 58-year-old from Torrance, CA, was accused of lying to the FBI and hiding over $1.1 million in income.

According to reports from the US Attorney’s office, Boyd was in a revenue-sharing agreement with a mobile app developer.  In exchange for marketing and promotion, Boyd would receive 13% of the profits for an emergence and crime reporting app.  The part that went wrong?  Creating the app would require under the table deals.  It was discovered that Boyd accepted a bribe, and all he had to do was acquire port contracts for the app developer.  As if taking the bribe wasn’t bad enough, Boyd lied to federal investigators, saying he had no stake in the company.  In the end, it wasn’t taking the bribe that got Boyd in trouble.  The investigation against Boyd that turned up $1.1 million in income he received between 2007 and 2011, acquired from a security company, went unreported.

While Boyd’s attorney, Vicki Podberesky, maintained the former chief “did not act with corrupt intent,” she did tell the LA Times she believed the courts administered a fair ruling.  Boyd plead guilty to the charges.  So not only will Boyd serve two years behind bars, but he will also be subject to a three-year supervised release and over $300,000 in restitution fees.

It just goes to show that the IRS always wants their share of the money, whether it’s from a bribe or not.

How Does a Federal Tax Lien Affect You?

The IRS files Federal Tax Liens (“FTL”) to secure the governments interest in property against individuals with back tax liabilities.  The FTL is of public record, often filed in the county courthouse where the tax payer lives.  According to the IRS, a FTL can affect you in numerous ways:

Assets — A lien attaches to all of your assets (such as property, securities, vehicles) and to future assets acquired during the duration of the lien.

Credit — Once the IRS files a Notice of Federal Tax Lien, it may limit your ability to get credit.

Business — The lien attaches to all business property and to all rights to business property, including accounts receivable.

Bankruptcy — If you file for bankruptcy, your tax debt, lien, and Notice of Federal Tax Lien may continue after the bankruptcy.

Famous Tax Evasion Cases You Never Heard of…

-Professional race car driver Hélio Castroneves was charged in 2009 for filing years of false tax returns and tax evasion in the amount of $80 million. Although he didn’t deny the charges, his attorney stated that “The racer isn’t to blame due to a brain injury which had compromised his decision-making abilities.”

-In 1952, the then IRS commissioner Joseph D. Nunan, Jr. made an $1,800 bet  that Harry Truman would win the presidential election.  Nunan won the bet but failed to report his winnings on his income tax returns. When this story became public knowledge, he was convicted of tax evasion.

-William Berroyer was in the  Hauppauge, NY, IRS office in 2008 to negotiate a settlement of his $60,000 tax bill when he tripped and fell over a telephone cord. Berroyer spent 17 days in hospitals and rehabilitation clinics for his injuries and sued the IRS for $10 million.  His case went before a judge who ruled in favor of Berroyer in 2014, but reduced his award to $862,000, and waived his tax liability.

Somerset County Landscaper Pleads Guilty to Tax Evasion for Failing to Report More Than $1.6 Million

The president of a landscaping business based out of Belle Mead, N.J., pleaded guilty today to income tax evasion.

Angelo Dimeglio, a resident of Lawrenceville, NJ, entered his plea in Newark federal court before U.S. District Judge Jose L. Linares. Dimeglio pleaded guilty to one count of personal income tax evasion pertaining to his 2011 tax return. Sentencing is scheduled for June 11.

“As we continue with this year’s filing season, today’s guilty plea by Mr. Dimeglio should serve as a strong reminder that IRS-Criminal Investigation takes criminal violations of our nation’s tax laws very seriously,” stated Jonathan D. Larsen, Special Agent in Charge, IRS-Criminal Investigation, Newark Field Office. “Those Americans who file accurate, honest and timely returns can be assured that the government will hold accountable those who do not.”

According to court documents and statements made in court:

Dimeglio was the president of Caliper Farms Nursery, LLC, a landscaping business based in Belle Mead, N.J. Caliper Farms Nursery maintained business bank accounts into which customer payments were supposed to be deposited. Dimeglio had sole control and access to these business bank accounts.

In order to conceal Caliper Farms Nursery true income, Dimeglio cashed and/or deposited customer checks into his personal bank account or the bank account of family members, rather than depositing them into the Caliper Farms Nursery business bank account. Dimeglio also issued Caliper Farms Nursery checks payable to himself and/or family members, and deposited those checks into his personal bank account or the bank account of family members. Dimeglio also provided false information to his tax preparer for the preparation of his tax returns.

For the 2011 tax year, Dimeglio’s tax return only reported approximately $25,896 of taxable income. Dimeglio admitted that for the 2011 tax year, he failed to report approximately $520,968 of additional taxable income from Caliper Farms Nursey, upon which there was an additional tax due and owing to the government of approximately $158,619.

For sentencing purposes, Dimeglio’s relevant conduct will be taken into account by the court relating to his failure to properly report all of the income he received from Caliper Farms Nursery on his 2009, 2010, 2012 and 2013 individual income tax returns. In total, for the years 2009 through 2013, Dimeglio failed to report approximately $1,650,499 in additional income, upon which there was an additional tax due and owing to the government of approximately $429,898.

The count of tax evasion carries a statutory maximum prison sentence of five years and a statutory maximum fine equal to the greatest of: (1) $250,000; (2) twice the gross amount of any pecuniary gain derived from the offense; or (3) twice the gross amount of any pecuniary loss sustained by any victims of the offense.

The investigation was conducted by IRS-Criminal Investigation, Newark Field Office, under the direction of Special Agent in Charge Jonathan D. Larsen and the U.S. Attorney’s Office, under the direction of U.S. Attorney Paul J. Fishman. The Government is represented by Assistant U.S. Attorney Erica Liu.