13 Feb February 2020 Tax Problem Solutions Newsletter
Inside this edition of the March SFS Tax Problem Solutions Newsletter you can read about:
Stormy Outlook for Attorney Michael Avenatti, Our Client Successes, They Knew the Drill But Cheated the IRS (and got caught) Anyway,A Troupe of Frauds in Tampa, The ABCs of Tax Resolution Explained – H is for Handling IRS Audits, A Valentines Day, Did You Know? How to Select a Reputable Tax Resolution Company to Permanently Resolve Your Tax Problems.
More Interesting Reading… Question and Answer, For the Foodies and A Bit of Tax Humor.
February 13, 2020
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In the News!
Stormy Outlook for Attorney Michael Avenatti
Michael Avenatti became a household name as the attorney representing former adult film star Stormy Daniels in her case against President Donald Trump. But Avenatti’s most recent notoriety is strictly of his own doing. During a California Bar Association disciplinary hearing over allegations that he scammed a client out of $840,000, IRS agents arrested Avenatti on charges that he violated bail by committing a series of state and federal crimes while awaiting trial in New York.
IRS agents arrested Avenatti after they found that he arranged to have his ex-wife purchase a $50,000 Mercedes in her name that was used by Mr. Avenatti and his driver. Documents on the arrest stated that between June 2019 and September 2019, Avenatti ‘flipped’ cashier’s checks on eight occasions to himself to limit the amount of funds available in his U.S. Bank account. Thus limiting his creditors’ ability to levy his accounts and recover the debts he owed to his creditors.
The New York trial is based on charges that Avenatti tried to extort more than 25 million dollars from Nike, but a more significant trial looms on his horizon. Avenatti is expected in court in Los Angeles in May on a 36-count indictment that includes allegations that he defrauded clients of millions of dollars, committed bank fraud, and conveniently forgot to pay the IRS.
Following his arrest, a judge refused to grant Avenatti bail, citing a danger to the community at large. Shortly after that, he was flown to New York for the beginning of the Nike extortion trial.
Questions? Contact me: Jeffrey Schneider, EA, CTRS ACT-E, NTPIF at 855-355-8010 or firstname.lastname@example.org.
A Troupe of Frauds in Tampa
Aaron Troupe, 30, who was in the business of filing false tax returns using stolen identities, was sentenced to five years and one month in federal prison for theft of government property and aggravated identity theft. Troupe also had debit cards in his name that loaded with illegally obtained federal income tax refunds. The IRS ordered him to pay $449,529.97.
From 2012 to 2018, Troupe, a member of the “Manche Boy Mafia,” participated in identity refund fraud and credit card fraud.
Troupe’s days of crime came to an end when a property cleaning service found firearms, a laptop, and notebooks in an abandoned property they were cleaning. They turned their findings over to the Tampa police, who were able to track Troupe through a variety of identifying markers, one being his fingerprints.
For tax years 2011 to 2013, Troupe filed numerous fraudulent tax returns claiming refunds totaling $1,295,583. The IRS did not pay the total amount claimed but still paid out $449,529.
How to Select a Reputable Tax Resolution Company
Owing back taxes is difficult and stressful. The IRS and/or State taxing authorities have the power to garnish your paycheck and freeze your bank account in order to collect what they think is their money. The IRS is the most brutal collection agency on the planet. Calling the IRS is time consuming and annoying as hold times can be longer than 30 minutes and the information you receive from them may not be correct.
The good news is that there are legal tax solutions to ensure that you pay the minimum allowed by law based on your current financial situation.
It is important to work with a skilled tax resolution professional because they know how to present your case, in your best interest, before the IRS Financial information has to be presented accurately the first time around. Mistakes are very costly and, in some cases, doing the wrong things can be impossible to solve; doing things right the first time is essential. You don’t get a second chance with the IRS.
They Knew the Drill But Cheated the IRS Anyway
Dentists Mike Hsieh and Christine Chen, owners of Comfort Family Dentistry in Washington State, have pleaded guilty to filing a false tax return. Between 2007 and 2014, Hsieh and Chen kept two sets of financial statements for the business. One set of books showed actual expenses while another showed inflated expenses. They gave the fake statements to their accountant for tax preparation. The pair also had a bank account their accountant was not aware of and deposited patient fees into this account and did not report it as income. Also, they didn’t report cash they took from the dental practice to their accountant or on their taxes.
For the tax year 2013, Hsieh reported a taxable income of $232,753 when, in reality, he should have paid taxes on $348,663. For the same year, Chen reported revenue of $319,131, but her actual income was $425,679. For tax years between 2007 and 2014, both Hsieh and Chen admit failing to pay about $231,000 in taxes.
They have agreed to make restitution of more than $231,000 each and pay any additional tax, penalties, and interest, which their attorneys believe will be in the neighborhood of $300,000.
Attorneys argued for no jail time, citing the pair had lost their relationship with their bank, and their dental practice was dropped as a preferred provider by a major insurance carrier. The judge handed down a sentence of seven days in prison and 400 hours of community service.
The ABCs of Tax Resolution Explained
One of the most common questions I hear is, “I owe the IRS years of back taxes, what are my options?” The good news is the IRS has many other options available to alleviate an individual’s back taxes.
When you have a tax problem, your best bet is to work with a Certified Tax Resolution Specialist (CTRS),and Enrolled Agent (EA). During the process, there are many terms that you are likely to hear that are unfamiliar to you and notices that you will probably receive from the IRS or state.
We have begun a series of blogs, “The ABCs of Tax Resolution” that will provide you with a brief overview of many of these terms and concepts.
Learn about, H is for Handling an IRS Audit in our latest blog.
Read A-F here The Tax Resolution ABCs
(For a complete explanation about notices read my book, Now What I Got a Notice from the IRS.)
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I received a Notice of Federal Tax Lien via certified mail for unpaid back taxes, and I’m scared and don’t know what to do. Can you help me?
The Now What Help! Series
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With apples being so plentiful this time of year I baked a yummy apple crisp.
I recently received the KitchenAid Spiralizer with Peel, Core and Slice Attachment from Jeff and I just had to try the peeler. It was so quick that the apples were peeled and cored in just a few minutes.
As many of you know Jeff and I are always watching our food intake (Is that a classy way of saying we are dieting?) however, I fool myself into believing that this recipe is not fattening. After all, it is mostly apples and you need to have fruit in your diet, don’t you? I sorta forget about the flour, sugar, and butter.
I made no changes to this recipe as it is perfect. It is so quick and easy to make that you might want to dig in straight out of the oven. .