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IRS Times & Inquirer Volume IV, Issue 8 ‘Pursue Every Tax Cheat to the Ends of the Earth’ After cutting checks for as much as $300 for every taxpaying American, Bush administration made one thing clear: Tax evaders would not go unnoticed or unpunished. Speaking in front of the Senate Permanent Subcommittee on Investigations, Treasury Secretary Paul O’Neill said the U.S. Government is taking an aggressive stance toward eliminating offshore tax havens and punishing tax evaders. “We ought to pursue every tax cheat to the ends of the earth,” O’Neill commented to the U.S. Senate. Top on O’Neill’s list were Nauru, the Bahamas and Panama – countries with lax banking allow American taxpayers to hide their money overseas. O’Neill said the U.S. Government wants to stop going after the individual countries and instead target the tax evaders directly by negotiating treaties that will allow the U.S. government to gain easier access to overseas banking information. “We are dedicated, and determined, to do a better job than has ever been done,” O’Neill said of the government’s pursuit of tax cheats.
Agents Bust Tax-Rebate Scam Based on South Florida One of the biggest news stories of the month has been the release of tax rebate checks of up to $600 for taxpayers who filed for 2000. But already, two South Florida men have been arrested for operating an illegal scheme in which they sent out letters informing taxpayers that they could tell them the amount of their upcoming refund for a fee of $17.95. Borden Barrows, 39, and Russell Wayne Levine, 42, both of Boca Raton, Fla., were apprehended following an investigation by the Boca Raton Internet and Telemarketing Fraud Task Force made up of the IRS, U.S. Postal Inspection Service, FBI and Boca Raton police. The IRS was tipped off to the scam after a Leesburg, Ga., resident reported the letter he received from the South Florida men.
Arizona Businessmen Plead Guilty to Tax Fraud Phoenix businessmen Russell H. Ritchie and Dale E. Kipp thought they had created a scheme so elaborate that they could hide more than $2 million from the IRS. In fact, their scheme did work – but only for five years. In April, the Internal Revenue Service caught wind of it and investigated. According to the men’s guilty pleas, Ritchie and Kipp concealed $2,019,000 for the years 1994 and 1995, when they were majority shareholders in Multi-Micro Inc., a company that sold wireless cable frequencies. American Telecasting Inc., one of their clients, paid Multi-Micro installments in 1994 and 1995 totaling $2,019,000 for cable frequency rights. However, American Telecasting Inc. made these payments to a third company, Conference Management Services, which Ritchie and Kipp said was a legal company in Panama. Conference Management Services, however, was just a number of bank accounts located in Arizona and controlled by Ritchie and Kipp. Ritchie and Kipp face maximum sentences of three years and/or $100,000 in fines for tax evasion.
Thank You! Thank You! Thanks to YOU, the word is spreading. Thanks to my clients and friends who graciously referred me to their friends, clients and relatives last month! I enjoy building my business based on the positive comments and referrals from people just like you. I couldn’t do it without you!!!!
Houston Attorney Admits to Hiding $1 Million in Classic Tax-Shelter Scheme Patrick Strong, a well-known Houston attorney, thought he could outsmart the IRS by diverting $1 million to a foreign corporation in a classic tax-shelter scheme. On Oct. 15, however, Strong will learn what the government has in store when it sentences the attorney for four counts of tax evasion. Strong directed $1 million he earned as an attorney to the two foreign corporations. To further hide the money trail, Strong, a specialist in international legal matters, established a consulting agreement between himself and his foreign corporation. In all, Strong avoided paying $247,000 in taxes from 1992 to 1995. Additionally, the judge will take into account during sentencing the fact that Strong personally benefited from his tax-shelter scheme, which allowed him to purchase an expensive beach house in Galveston, Texas.
BUSINESSMAN FAILED TO PAY EMPLOYEE TAXES For four years, John Leroy Fischer, owner of Minneapolis-based Global Communication Services and Global Electric, failed to pay the IRS the money he withheld from the employees’ paychecks, which totaled more than $350,000. Fischer, who now lives in Scottsdale, Ariz., after having sold his company, pleaded guilty in a Minneapolis court to two counts of failing to pay withheld taxes. He faces a maximum sentence of five years in prison and/or a $250,000 fine.
JERSEY TRAVEL EXECUTIVE ADMITS TO TAX FRAUD It’s funny where gambling and tax evasion can take you. Ask Pam Koles. A former corporate executive for industrial gas maker BOC Group, Koles embezzled $3.1 million from her employer to fund her London gambling habit and then failed to report the money to the IRS. Koles, who holds residences in Jersey City and Fort Lauderdale, pleaded guilty to tax evasion. What’s more, before losing her job and facing income tax charges, Koles was something of an expert on business travel, having been quoted on the subject in numerous magazines and newspapers. She faces a maximum sentence of three years in prison and up to $250,000 in fines for tax evasion and embezzlement.
FAILING TO PAY TAXES ON STOLEN MONEY LANDS WASHINGTON STATE WOMAN IN PRISON You’d think the Bank of America would have been the one to turn in Roberta Andrina, considering the 56-year-old Washington woman embezzled more than $142,000. But it wasn’t the bank that got Andrina – it was the IRS. The tax-collecting agency learned that Andrina had not only received an additional $142,000 in income, but she failed to pay taxes on it. For tax evasion and embezzlement Andrina will serve one year and one day in prison.
OHIO MAN ALLEGEDLY EVADED $90,000 IN TAXES Ohio businessman Daniel Clinton Johnson discovered it’s not easy to hide nearly $300,000 from the IRS. In July, a federal grand jury indicted Johnson for tax evasion for the years 1994, 1995, and 1996. For those years, Johnson reported a combined income of $50,405, though the IRS alleges that he received $348,435 on which he should have paid $100,727. For those three years Johnson paid only $9,449 in taxes. If convicted Johnson faces a maximum sentence of five years in prison and a fine of up to $250,000.
FALSE WRITE-OFFS GET MAN 15 MONTHS IN PRISON Steven Traut learned that corporate write-offs can be dangerous. He will serve 15 months in prison for purchasing personal items through his company, M. Traut Wells Inc., and writing off the items and services as business expenses. He used either corporate checks or bartered the services. “The criminal prosecution of Mr. Traut makes clear the serious consequence of ignoring the tax laws,” said United States Attorney Robert Small.
“Who Else Wants To Win A $250 Transferable Gift Certificate?” Take my trivia Challenge and you could win too! This is one of my favorite sections. Each month I’ll give you a new trivia question. The first THREE people who call my office with the correct answer win a free $250 reduction on any IRS service I provide. (One per client, please) And best yet, your certificate is transferable. Use it yourself, of give it to a family member or special friend and help them save money. Take your best guess, then call me at 732-240-4055. This Month’s Mega Trivia Question… Which U.S. City will hold the next Olympic games?a) Salt Lake City Call me right now with your answer! 732-240-4055
IRS Questions Corner . . . Question: I realize the benefits of an Offer in Compromise and how I can offer to pay the IRS less than I owe. But no matter what amount we agree on, I am not in the position to write a check for a sizeable amount of money. What can I do? Answer: Since you already are familiar with an Offer of Compromise, you’re one step ahead of the game. As you know, the IRS may be willing to accept pennies on the dollar with an Offer in Compromise. But, if you have a sizeable debt, you’ll still need to pay a decent sum to the IRS. Now don’t panic here. While an Offer of Compromise that can help you reduce your tax bill, it also can help you work out an installment plan. That’s right, you don’t have to pay the amount upfront and in full. The IRS now realizes that it will not get its money if the taxpayer owes so much he or she cannot afford to make the payment. For this reason, the agency is often happy to work out a payment plan similar to a mortgage or car loan – a manageable installment paid monthly that will not drastically affect your lifestyle. Having a large tax debt over your head can be a stressful thing. Many of my clients worry themselves sick about how much money they owe and how they cannot afford to pay their bill. But once, I have an opportunity to show them how easy it is to manage their debt, they are immediately relieved. Dealing with the IRS can be one of the most stressful moments of your life – rivaling marriage, a death in the family or buying a home. Why go through this alone? A qualified tax professional can help you look at your situation more critically; examining the ways you can manage and even eliminate your IRS debt. Wouldn’t, say, a $150 monthly payment be worth it to have the IRS off your mind? Trust me, if you take just an hour out of one afternoon to see me, I promise I can ease your mind about tax debt. Although dealing with the IRS is serious business, a tax professional can make it easier on you and your wallet. My job is to solve IRS problems and help clients manage their tax debt. Let me put my experience and skills to work for you. I encourage you to call my office at 732 240 4055 for a free, no-risk consultation. Call me Today! I’d Like To Hear From YOU! Whether you’d like to avoid the IRS, contact the IRS, settle with the IRS or just want to refer a friend, relative or client, I’d love to hear from you. I would be happy to provide you or that special person you refer a no-obligation confidential consultation to explain every option available to solve IRS problems. David A. Semanchik, Esq. Copyright © 2001 USTC. All rights reserved. |
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