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IRS Times & Inquirer Volume V, Issue 6 Disney Faces IRS Audit Not even Mickey and Minnie Mouse can avoid the internal Revenue Service. In its federal filing last month, the Walt Disney Co., which owns Disney, ABC, ESPN and well-known theme parks, announced that the IRS is auditing the company’s tax returns for the years 1993 to 1995. The IRS will examine “certain of the company’s tax positions,” according to the SEC filing. Because Disney mentioned the audit in its quarterly filing, it seems likely that the company will have to make additional payments to the IRS, according to Tim Mulligan, an analyst at Forensic Advisors. “They didn’t mention it in their prior quarters, so it may indicate the company is now realizing the possibility – if not the probability – that the IRS may assess a deficiency,” Mulligan commented to the Reuters newswire. “But Disney has also said that there’s nothing material involved.”
Physician and Husband Jailed for Tax Evasion A Maryland physician and her husband, who worked at her practice, each have been sentenced to 21 months in prison for failing to file personal income tax returns for the years 1990 to 1995 and 1998. Dr. Sakiliba Mines and her husband, Charles, operated Dupont Medical Associates in Silver Springs, Md., and drew regular paychecks from the company. Evidence at trial showed that the Mines owed at least $105,654 in personal income taxes – though prosecutors believe that number could be higher since Dupont Medical Associates often received cash through co-payments. Additionally, Dr. Mines has defaulted on her student loan debt, which amounts to more than $1 million.
Ohio Men Charged with Tax Evasion T. David Ring and Paul E. Palmer, a.k.a. Gene Palmer, weren’t playing amateur ball when it came to dodging taxes. Ring and Palmer allegedly opened several bank accounts in Champaign, Ill, using false Social Security numbers. Referring to the accounts as “trusts,” the two men then routed the money Ring earned from his business, J.M. Personnel, through the accounts to destroy the paper trail. It was a smart plan. The problem? It didn’t work. Earlier this year, the two men were indicted on three charges of willfully attempting to evade federal income taxes. The indictment alleges that Ring’s 1993 tax return failed to report approximately $571,650 in taxable income, on which there was an income tax owed of approximately $214,655. If convicted, Ring and Palmer could receive up to five years in prison and a fine of up to $250,000 for each count.
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 just couldn’t do it without you!
Strip Club Owner Nailed on Tax Charges Mark Bailey, a California strip club owner, has been convicted on two counts of filing false income tax returns that underreported the amount of money his company received for admissions and drinks. Bailey, 52, the vice president of Jagg Inc., which owned the Captain Creams strip club, skimmed approximately $700,000 off the top of the company’s earnings in 1992 and 1994 and did not report the money on the corporate tax returns for those years. In 1992, Bailey then used $389,000 to purchase a second strip club, Bailey’s 20/20 in Century City. At the time, Bailey claimed Magic Johnson and Jerry Buss fronted the money to open the club. Two years later, Bailey tried a similar scheme in Corona – this time with the help of his lawyer, Alan Curtis. Bailey gave Curtis $310,000 in cash to place in a safe-deposit box. Curtis then used the cash to pay the club’s rent and operational costs. Curtis pleaded guilty to conspiring with Bailey to structuring currency transactions. Connye Morgan, the owner of Jagg Inc., pleaded guilty to filing a false tax return for the year 1991. “A cash business may attempt to conceal its income from the IRS, but as this case shows, it’s not worth it. Bailey has been convicted of tax fraud and his attorney, who helped him in the scheme, now has a criminal record,” said Michael S. Kochmanski, Special Agent in Charge of the Los Angeles Field Office of IRS-Criminal Investigation. Questions about the services of David Semanchik, Esq., go online to www.problemsolvers.com or email him directly at millchik@quixnet.net.
PAINTER CHARGED WITH TAX EVASION Leonard J. Rizzuto, 39, a Belmont, Mass., painter who operated Belmont Painting, has been charged with tax evasion for the years 1996 to 1998. According to the indictment, Rizzuto tried to evade taxes by depositing checks into his personal, rather than business, bank account and by cashing checks at the issuing banks and then depositing the cash into his account, thereby making it more difficult to identify the source of the funds. Rizzuto then misled his tax preparer by presenting an incomplete list of business sales. The IRS alleges Rizzuto owes more than $47,000, excluding interest and penalties. If convicted, he faces up to five years in prison and a fine of up to $100,000.
CALIFORNIA MAN PLEADS GUILTY TO TAX EVASION Jim J. Kettman, 52, tried to play numbers games with the IRS and lost. He pled guilty to knowingly filing a false income tax return for the year 1993. According to the plea, Kettman claimed his taxable income was $22,775, with $9,495 in tax due. In fact, Kettman and his wife, Ona B. Schissel, earned $112,120.28 in 1993 and owed $38,015.22. Additionally, Kettman supplied the IRS with false documents. Kettman will be sentenced in August. He faces up to five years in prison and a fine of up to $250,000.
CALIFORNIA MAN SENTENCED TO FIVE MONTHS FOR NOT FILING Stephen Hundley, of Poway, Calif., was sentenced to five months in prison for not filing a personal income tax return for the year, 1995, despite earning $173,410 that year. After his sentence, he will serve one year of supervised release. In his plea agreement, Hundley admitted to failing to file individual income tax returns for the years 1995 and 1996, despite having a total gross income of $242,586 for those years. He owes $73,061.04 for that income. In all, Hundley said he expects to owe more than $300,000 in taxes, interest, and penalties.
GUN SHOP OWNER ENTERS GUILTY PLEA FOR FAILING TO FILE David W. Spellman, a 42-year-old gun shop owner in Pataskala, Ohio, didn’t tell the IRS he made $94,569 in 1995. Most of the money Spellman earned came from processing credit cards for an adult phone service, which had trouble obtaining a merchant account because of its industry. He charged 16 percent but did not report the income. After pleading guilty to failing to file a federal income tax return, Spellman now faces up to one year in prison and a fine of up to $100,000.
MASS. BUSINESSMAN CHARGED WITH EVASION Roland Joy, 34, of Medford, Mass., has been charged with conspiracy to evade corporate federal taxes and with filing a false personal tax return. The indictment alleges that Joy paid cash wages under the table to himself and other employees as a way to avoid company income and employment taxes. If convicted, he faces three years in prison and a fine of up to $250,000.
“Who Else Wants To Win $250 Transferable Gift Certificates?” 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, or 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 city is the capital of the European Union? a) Brussels b) Berlin c) Paris d) London Call me right now with your answer! 732-240-4055
IRS Question Corner … Question: My credit card companies aren’t negotiable on the amount I owe them. I can’t exactly enter into an installment plan with Carnival for this summer’s cruise of the western Caribbean. And my cable company only offers two options: pay or no television. So this is to say I find it hard to believe the IRS is negotiable and willing to enter into installment plans. How can it be true? Answer: You’re absolutely right. You won’t receive a break from your credit card company, Carnival won’t offer an installment plan and, no cable companies aren’t charitable organizations. But while the Internal Revenue Service does mean business when it comes after delinquent taxpayers, the agency is also much more flexible than most private enterprises. Unlike your cable company, the IRS will work with you when you’re in a tight situation. The tax-collecting agency isn’t interested in throwing anyone on the street without a dime to his name. In fact, you only have to pay the IRS what you can afford to pay. This is done with an Offer in Compromise. In entering into this kind of agreement with the IRS, you’ll need the guidance of a qualified tax professional. With this agreement, you and your tax professional will determine exactly what you owe and then show the IRS what you can afford to pay after you can account for reasonable expenses, such as housing, transportation, food, etc. Waterfront mansions and BMWs, of course, do not count as reasonable expenses. Oftentimes, in an Offer in Compromise, the debt is reduced to pennies on the dollar. Another, separate means of settling with the IRS is to enter into an installment plan. While this can be coupled with an Offer in Compromise, the two are different. With an installment plan, you simply pay a livable amount each month – just as you might do with your mortgage or car payment. I help taxpayers settle up with the IRS. I’m an IRS Problem Solver. No matter how much money it seems you owe the IRS, remember that no problem is unreasonable and taxpayers have more rights and option than you might think. For a free, no-risk consultation, please call my office at 732-240-4055.
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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