Your IRS Questions Answered Here…

Question: I have a huge tax amount owing, the IRS is harassing me and I need help.  I got a quote from another company at a much lower price.  Why should I go with you?

Answer:  If someone quoted you a much lower fee, think about this: do you think an experienced tax resolution CPA, EA or attorney worth their “salt” would work for peanuts? – Especially given the fact that IRS Representation is a highly valued skill set.  You usually get what you pay for in this world we live in today. This is your financial life and the stakes are very high. If you needed heart surgery, would you shop around for the least expensive surgeon or would you get the very best you can find? The same holds true for dealing with the Internal Revenue Service. Having IRS problems can ruin all aspects of your life, your marriage, relationships with your children and family members, your employment, ability to buy a house, a car, money for retirement or even have a bank account.  You want the best possible person for the job, not the cheapest.

Your IRS debt doubles every 6-8 years due to the daily compounding effect of interest and penalties and the IRS has at least 10 years to collect from you to so hand this off to the lowest bidder in town is probably not a wise decision.  You’ll have peace of mind and sleep better at night knowing that we’re working hard on your case to get you the lowest possible settlement, allowed by law, with the IRS!

Gas Station Owner Tries to Hose the IRS

A New Jersey man who owned four gas stations in Peoria, Il, Adnan Rashid, was sentenced in March 2017 on charges of mail fraud and tax evasion.

Rashid had previously pled guilty and admitted that he grossly underreported his sales at the four stations on his federal corporate tax returns and the Illinois sales and use tax returns. Rashid admitted to altering the stations’ gross receipt data before providing the information to his accountant. Information was shown in court that he had over $41 million in unreported gross receipts and $1 million in unreported personal income.

The judge in the U.S. District Court sentenced Rashid to serve 21 months in federal prison and pay $1.28 million in restitution to the State of Illinois and $206,573 to the IRS.

Church Treasurer Needs to Repent

Gregory Olson, formerly of Las Vegas now living in North Dakota, was sentenced to four years in prison for stealing nearly $1.5 million from the church where he was treasurer and committing more than $500,000 in tax fraud.

Olson earlier pled guilty to the charges and admitted in court that he made unauthorized cash and check withdrawals from the church’s bank accounts, false claims for reimbursement for church expenses, unauthorized receipt of mortgage loan proceeds and solicited loans from church members. He failed to report the stolen money as income to the IRS.

Olson’s fraud scheme bankrupted the church.

Chiropractor Adjusts His Income to Zero

A Maryland chiropractor, Dr. Warren Gregory Belcher, was indicted on one count of corruptly endeavoring to impede the IRS and six counts of filing false tax returns.

Dr. Belcher operated a chiropractic business for nearly 20 years.  He received income for chiropractic services from insurance companies, patients and other third parties.  For the tax years 2009 through 2015, it’s alleged that Belcher filed false individual income tax return where he failed to report he owned a chiropractic business and reported he earned $0 in business income.

In addition, it’s alleged that Belcher threatened insurance companies and other third parties that if they filed a 1099-MISC, they could be subject to civil and criminal penalties for reporting his income to the IRS. Belcher even threatened his accountant in hopes to prevent him from reporting his income to the IRS. Belcher also submitted approximately 68 fraudulent 1099-MISC forms on which he claimed that the companies who reported his income to the IRS for those years paid him $0 in income.

If convicted, Belcher could face a statutory maximum sentence of three years on each count in the indictment, as well as supervised release, restitution and penalties.

IRS Q&A TIME

Question: I just received a letter form the IRS informing me they want to audit my 2014 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!

Delivery Business Owner Gets a Package from the IRS

David B. Schmitt of North Tonawanda, NY was sentenced to 30 months in prison and ordered to pay $748,459 in restitution for his conviction of tax evasion.

Schmitt, who operated three delivery businesses, attempted to evade payment of a large part of federal employment taxes by filing false forms with the IRS, having nominees open bank accounts to conduct business for the corporation and creating fraudulent trusts for the corporation.

Pizza Store Owners Fail to Report a lot of “Dough” to the IRS

Charles and Mary Bangle, owners of a popular pizza restaurant chain, who reside in Ocean City, NJ, both pled guilty to tax evasion.  Charles pled guilty to structuring transactions to avoid reporting requirements to his 2010 personal tax returns.  His wife, Mary Bangle, pled guilty to knowingly making false statements to IRS special agents.

Charles Bangle admitted in court to failing to report income he deposited in cash in his personal bank account.  On his 2010 tax return, he listed his income as $127,955 and omitted additional income of $263,113, thereby avoiding an additional $91,577 in taxes. Bangle also admitted to making cash deposits of in increments of less than $10,000 to prevent the bank reporting the deposits to U.S. Department of Treasury (known as structuring).

In court, Mary Bangle admitted she lied to special agents of the amount of cash she deposited into her personal bank account.

Charles Bangle was sentenced to 15 months in federal prison, three years supervised release and ordered to pay $248,560 in restitution and fined $5,000.  Mary Bangle was sentenced to three years probation and fined $3,000.

What is a John Doe Summons?

Federal law requires U.S. taxpayers to pay income tax on all earnings worldwide.  U.S. taxpayers are also required to report to the IRS any foreign financial accounts if the value of those accounts exceeds $10,000 at any time in a calendar year.

U.S. taxpayers seeking to hide their assets in offshore accounts can use the services of companies that open foreign accounts, create false corporations or other entities and serve as nominee officers.

In order to obtain a list of customers who use these companies, the IRS issues a John Doe summons, which allows the IRS to get the names of all taxpayers in a certain group.

One company that received an IRS John Doe summons was Sovereign Management & Legal (SML), a Panamanian company run by Michael Behr of Bozeman, MT. It’s alleged that SML advertises several different “packages” which allow taxpayers to hide assets offshore.  One of these “packages” includes creating corporations owned by other entities (including fake charitable foundations), which are all held in the name of the nominee officers of SML.  SML then opens bank accounts for these entities and provides debit cards in the name of the nominee to the taxpayer. By using these debit cards, the taxpayer can access their funds without revealing their identity.

Dentist Gets Drilled by the Federal Court

A Washington state couple, dentist Dr. James Hood,  and his wife, Karen Hood were found in contempt from a Federal Court for violating a previous permanent injunction requiring them to file payroll tax returns and pay payroll taxes in a timely manner.

The Court previously entered a permanent injunction against the Hoods and their entities to comply with federal employment laws.

The Court found the Hoods in contempt for showing a consistent pattern of disregarding their tax obligations by making incomplete employment tax payments, making dishonored payments and missing deadlines. The Hood’s failed to pay their taxes for the fourth quarter 2016 by the end of January 2017.  They also found that the Hoods attempt to make payroll tax payments were dishonored due to insufficient funds in their accounts.

As a result, the Court ordered the Hoods to close their dental business, cease operating as employers and barred them from opening any new businesses where they would serve as employers.

Owner of Iceoplex Skates on Thin Ice with the IRS

A tax attorney from Pittsburgh, PA and co-owner of the Iceoplex recreational sports facility, Steven Lynch, was sentenced to 48 months in prison for failing to collect, account for and pay over employment taxes to the IRS.

From 2012 to 2015, Lynch controlled the finances for the business and withheld more than $790,000 from the wages of his employees but failed to turn those funds into the Internal Revenue Service.

According to Principal Deputy Assistant Attorney General, Caroline Ciraolo, “Business owners and operators who choose not to pay over to the United States that they withheld from their employee’s wages are stealing from the U.S. Treasury and should plan on facing prosecution and incarceration.”

In addition to his prison sentence, Lynch will serve three years supervised release, pay $793,145 in restitution and a $75,000 fine.

If you owe payroll or employment taxes, it is important to contact an attorney to see whether you may be prosecuted.  The IRS is cracking down on employment taxes – shutting businesses down and even prosecuting the liable parties.