Fisherman Looking at 15 Years in The Graybar Hotel For Not Paying Over $2,721,268 in Payroll Taxes!

Wendy Brockenbrough, the owner of three businesses in Virginia, pleaded guilty for failing to pay over payroll taxes that she deducted from her employees’ paychecks from 2011 to 2019. She is also accused of failing to file quarterly tax returns for each of her three businesses.

An avid fisherman, Brockenbrough holds the Virginia state record for catching the largest albacore tuna, at 70 pounds, 11 ounces, in 2019.

Brockenbrough lived a lavish lifestyle that included purchasing a Regulator center console boat for $126,000, a Hatteras 60-foot yacht for approximately $820,000 and a Jeep Wrangler for $41,000.

She concealed her actions by telling her accountants that she made the payments, and forged IRS records and QuickBooks entries to show that the taxes had been paid.

Her actions caused the IRS a loss of $2,721,268.00. In addition to restitution, she faces up to 15 years in prison.

 

Contact McCauley Law Offices, P.C. to discuss your TAX JAM and get the IRS off your back today!

Your IRS Questions Answered Here…

Question: I’ve been getting threatening letters from the IRS saying I owe them $47,000 for 2018 – 2021. This is beginning to affect other aspects of my life as well. What should I do?

Answer: There are many options available to you today to resolve this.  However, you need to take the first step and call us to see what you qualify for. Solutions may include negotiating an Offer in Compromise where we will offer a lower amount and request a release of federal tax liens.  We can also ask for an Appeal of the amount owed and request the IRS re-examine your case to reduce the amount you owe.

We can request the IRS remove penalties by presenting valid reasons for removal of these. Additionally, we can offer a monthly Payment Plan that is workable within your budget.  Many clients have unfiled tax returns that need to be filed first before the IRS will enter into resolution. We will prepare all delinquent returns (even if you do not have any records) for past years.  This alone usually reduces the Tax, Penalty and Interest owed.

If you’re being audited, we’ll represent you in front of the IRS at the audit or hearing, so you do not have to appear.

We at McCauley Law Offices are experts in IRS tax problem resolution and help taxpayers with their IRS Problems every day.  We know the “ins and outs” and know how to navigate the IRS maze. There is a solution to EVERY problem. Call us today! 877-TAX-JAMS for a FREE, no-obligation confidential consultation!

School Board President Chooses Friend Over Ethics Learns Hard Lesson

The former board president for the Madison County School District, Albert Morrison, was charged with tax evasion and failure to file tax returns.

Morrison was president of the school board from 2012 to 2018, and during that time was instrumental in awarding several lucrative maintenance and construction contracts to his good friend, John David, the owner of Emergency Restoration. In order to avoid competition for David, the district, under Morrison’s instruction, sidestepped the bidding requirements by splitting up invoices and classifying all repairs as emergencies. Morrison also arranged the sale of three acres of school property to David for $60,000, well under the land’s value, which at the time was estimated to be worth almost half a million dollars.

In exchange for the business, David made payments to Comfort Consulting, a company owned solely by Morrison. From 2014 to 2018 David wrote checks to Comfort Consulting totaling $561,667.

Morrison did not declare any of the payments made to Comfort Consulting on his tax returns and did not file returns altogether from 2015 to 2018. He avoided paying approximately $118,200 in taxes and faces up to 20 years in prison.

 

Contact McCauley Law Offices, P.C. today to discuss your TAX JAM and get the IRS off your back!

IRS Tax Tip 2022-98: Claiming a child as a dependent when parents are divorced, separated or live apart

Claiming a child as a dependent on your taxes can be confusing in situations where the parents are divorced, separated, or live apart. Below are some tips and helpful links straight from the IRS website to keep in mind if you are in this situation.

When the IRS comes knocking, let us answer. Contact McCauley Law Offices, P.C. today for help getting out of your Tax Jam.

IRS Tax Tip 2022-98: Claiming a child as a dependent when parents are divorced, separated or live apart

Parents who are divorced, separated, never married or live apart and who share custody of a child with an ex-spouse or ex-partner need to understand the specific rules about who may be eligible to claim the child for tax purposes. This can make filing taxes easier for both parents and avoid errors that may lead to processing delays or costly tax mistakes.

Only one person may be eligible to claim the qualifying child as a dependent.

Only one person can claim the tax benefits related to a dependent child who meets the qualifying child rules. Parents can’t share or split up the tax benefits for their child on their respective tax returns.

It’s important that each parent understands who will claim their child on their tax return. If two people claim the same child on different tax returns, it will slow down processing time while the IRS determines which parent’s claim takes priority.

Custodial parents generally claim the qualifying child as a dependent on their return.

  • The custodial parent is the parent with whom the child lived for the greater number of nights during the year. The other parent is the noncustodial parent.
  • In most cases, because of the residency test, the custodial parent claims the child on their tax return.
  • If the child lived with each parent for an equal number of nights during the year, the custodial parent is the parent with the higher adjusted gross income.

Tie-breaker rules may apply if the child is a qualifying child of more than one person.

  • Although the child may meet the conditions to be a qualifying child of either parent, only one person can actually claim the child as a qualifying child, provided the taxpayer is eligible.
  • People should carefully read Publication 504, Divorced or Separated Individuals to understand who is eligible to claim a qualifying child.

Noncustodial parents may be eligible to claim a qualifying child.

Special rules apply for a child to be treated as a qualifying child of the noncustodial parent.

More information:
Publication 501, Dependents, Standard Deduction, and Filing Information
Whom May I Claim as a Dependent?

Payroll Manager Finds Multiple Ways to Bankroll Himself

Matthew Hernandez, the manager of a San Diego technology company, was found guilty of embezzling more than $350,000.

Hernandez was responsible for the company’s payroll and accounts payable, and  had authority to sign checks. Between 2010 and 2017 he stole money from the company hundreds of times in multiple ways.

His scheming involved:  making online payments from the firm’s business checking account to pay off his personal credit cards, using the company credit card to make personal purchases, issuing company checks directly into his bank account, and paying himself multiple times during a single pay period.

Some of the personal items he purchased with company funds included a home gym, a $3500 hot tub, a TAG Heuer racing watch, and tickets to the Coachella music festival.

Hernandez was sentenced to 24 months in prison and ordered to pay $356,664.46 in restitution.

Contact McCauley Law Offices, P.C. today to discuss your TAX JAM and get the IRS off your back!

Water District Manager Drowning in a Tsunami of His Own Making

Dennis Falaschi, the general manager of the Panoche Water District in central California, was indicted for conspiracy, theft of government property, and filing false tax returns.

In 1992, Falaschi discovered that an abandoned drain turnout on the Delta-Mendota Canal that had been sealed years earlier was leaking water. He instructed an employee to install a new gate inside the standpipe so that the site could be opened and closed on demand. While his superiors thought the old turnout was sealed and not functioning, Falaschi proceeded to sell 25 million dollars’ worth of federally owned water over a period of 23 years. A drought in 2015 caused water levels to recede and the site was discovered.

Falaschi used the proceeds from the illegal water sales to pay himself and his co-conspirators exorbitant salaries, fringe benefits and personal expense reimbursements. From 2015 to 2017 he failed to report to the IRS the more than $900,000 in income he received from private water sales.

If convicted, Falaschi faces a maximum of 23 years in prison and fines up to $750,000.

Contact McCauley Law Offices, P.C. today to discuss your TAX JAM and get the IRS off your back!

Did You Know?

Joseph Nunan, an IRS commissioner in the 1940s, was charged with evading over $90,000 in taxes. Among the income he failed to report was $1800 he won on a bet that Harry Truman would beat Thomas Dewey in the 1948 presidential election. He was sentenced to five years in prison.

Contact McCauley Law Offices, P.C. today to discuss your TAX JAM and get the IRS off your back!

Resolution Mill Puts Taxpayer Into Bad Deal

Have you ever heard those radio and TV spots promising a settlement on your back tax debt?  Well, they do not always tell you the full truth.  In our experience most of those “big companies” who spend thousands of dollars on each radio/TV advertisement, are not necessarily concerned about putting their customers into the best deal with the IRS.  We tend to find their business model is more so geared towards billing their customer as much as possible, as quickly as possible, and after getting paid, typically get the quickest and easiest deal they can with the IRS.  In other words, they do not represent their customers to the fullest extent and put them in the best possible position given their tax debt and financial circumstances.

This was the case with this client.  After paying one of the big companies $15,000 for their “services,” they insisted that his only option was a $9,000 per month installment agreement on his back tax debt.  If he didn’t agree they were going to close his case and let him deal with the IRS himself, even after he had paid them.  Yes, he could afford the $9k/mo, but he said to himself that “it just didn’t feel right.”  After contacting our firm, in our initial call, we determined that he was correct; the “big firm” was letting the IRS dictate the agreement as opposed to negotiating on his behalf.  The Net Results you ask?

Structured an installment agreement with the IRS for $2,445 per month;
Forced the “big company” to fully refund our client the $15k that he had paid them for their shoddy “representation”; and
Employed tax savings strategies that are saving the client over $15k per year in taxes.

If you are working with one of those “big companies” that blanket TV and Radio with advertisements and feel like they are just bilking you (hint – they probably are); your not getting great customer service; your talking to someone different every time you call; your case is dragging on forever and your not getting anywhere; you don’t think their giving you solid advice; or you just want another opinion, give our firm a call for a free consultation.

IRS Settles NY Music Exec $50k Tax Debt for $2763

Even though you have a CPA preparing your returns, they may have no idea that you’re not paying your taxes. That was the case with this client. After he had a return prepared, he complained to his CPA that he couldn’t afford to pay his tax liability as he was already in a payment plan with the IRS on his older tax years and owed the IRS over $50k. After hearing this, the CPA instructed him to call our firm immediately for a consultation.

Upon reviewing his case, we found that the payment arrangement that IRS had put him into was almost $600 per month. The IRS put the taxpayer in a position where he was paying towards his old tax debt but continuing to accrue new tax debts – pyramiding – moving forward. After conducting a financial analysis and determining that he was a likely OIC candidate, we immediately contacted the IRS, defaulted his installment agreement and submitted our petition for a settlement. After negotiating with the IRS, we were able to structure a settlement of the $50,430 tax debt for only $2,763.

 

Tree Trimmer Tries to Prune Taxes

The owner of Bert’s Tree Service in Connecticut, Robert Porzio, was charged with tax evasion for failing to report more than $900,000 in income on his tax returns from 2012 to 2016.

Porzio deposited numerous business checks into his personal bank accounts, transferred thousands of dollars into a personal investment account, and hid the payments from his bookkeeper.

He was sentenced to 12 months and one day in prison, fined $25,000, and ordered to pay restitution to the IRS in the amount of $331,388, plus interest and penalties.

Contact McCauley Law Offices, P.C. today to discuss your TAX JAM and get the IRS off your back!