11 Apr Newsletter April 11, 2018
Inside this edition:
- Building a “Villa” Isn’t Considered a Business Expense by the IRS
- The IRS Smells Something Rotten with Produce Business
- A Bit of Humor
- Things are not Smelling Rosy for Florist Couple
- Your IRS questions answered here…
- For the foodies … Slow Cooker French Onion Soup
Building a “Villa” Isn’t Considered
a Business Expense by the IRS
Joseph Nocito, of Sewickley, PA was indicted by a federal grand jury in February 2018 on charges of conspiring to defraud the US and filing fraudulent income tax returns.
It’s alleged that Nocito, the CEO and President of Automated Health Systems Inc. (AHS), fraudulently claimed millions of dollars of personal expenses as corporate business expenses, such as the construction of his 39,000 sq. ft. house which he named “Villa Noci”, payments on a Jaguar, Maserati and Rolls Royce, a personal butler and cook, and country club memberships. Nocito did not report the income he diverted on his personal tax returns.
Furthermore, the indictment alleges that Nocito hid millions of dollars in taxable income from AHS by diverting the funds to other companies he owned, and falsely claimed these funds on his corporate returns as management, administrative and consulting expenses to reduce his tax liability.
If convicted, he faces a maximum sentence of five years in prison for the conspiracy charge, three years for each count of filing a fraudulent return, monetary penalties, restitution and supervised release.
The IRS Smells Something Rotten with Produce Business
Thomas Paine of Johnson Creek, WI, and former corporate officer of Tree RipeCitrus Company, pled guilty in U.S. District Court to charges of tax evasion.
Paine was responsible for the financial and tax aspects of the business but did not file corporate tax returns from 2010-2012. He concealed the business’ income by structuring cash deposits of less than $10,000 to avoid the bank’s reporting requirements. The loss to the IRS is estimated to be between $250,000 and $550,000.
Paine faces a maximum sentence of five years in prison, supervised release, restitution, and monetary penalties.
A Bit of Humor…
Things are not Smelling Rosy for Florist Couple
The owners of an internet floral business, Andrew Bassaner, and his wife, Vicki Bunchuk of PA were convicted in February 2018 for failing to pay employment taxes to the IRS as well as filing fraudulent personal and corporate tax returns.
Evidence presented at trial showed that from the years 2010 to 2012, the couple diverted funds from their business, Florist Concierge Inc. (FCI) by writing the funds off as business expenses on FIC’s corporate tax returns and not reporting it as income on their personal returns. Instead, they used the money to pay for luxury items including $17,000 a month rent for a home in Florida. From 2011 through 2014 the couple also falsely claimed that their employees were independent contractors which allowed them not to pay any employment taxes on their wages.
The couple will be sentenced in District Court on June 27th and could face a maximum sentence of five years in prison for each employment tax count, three years for each count of filing a fraudulent tax return as well as supervised release, restitution, and monetary penalties.
I’d like to hear from you…
If you have an IRS issue, or just want to refer a friend, relative or client, I’d love to hear from you. I can provide a no-obligation, confidential consultation to help you solve your IRS problems.
Thank you for your kind words
Jeff provides professional and timely income tax service. I’ve used him for over 13 years without having any problems.
~ Tim P.
Q & A
Answer:If you go into the IRS collections process for delinquent taxes, you will be notified and offered payment arrangements before the agency garnishes your wages. The IRS does not have to get a judgment, like other creditors do, to start garnishing, but it tries to work with you before taking that drastic step. You’ll receive at least two notices, one itemizing the amount you owe with a deadline for full payment and a final notice letting you know the IRS plans to garnish your wages. You have 30 days to respond to the final notice and work out other payment arrangements.
For the foodies…Slow Cooker French Onion Soup
This recipe is really for me. I love soup. I can eat soup every day.
Jeff tells me I should open a soup restaurant; that my soups are so tasty and I laugh!
I just came across this recipe for onion soup and decided to share it even though I have not tried it yet. It looks so easy and from what I can see the only ingredient missing is minced garlic… I put garlic in almost everything I cook.
I’m off to Publix tomorrow to buy yellow onions and Gruyere cheese and try this recipe. Let me know if you make it and if you enjoyed it.
Oh… and a really nice Pinot Noir!