12 Jul Newsletter July 12, 2018
July 12th, 2018
Inside this edition:
- Olympic Figure Skater Scores a Zero with Judge
- Embezzled Money Must be Reported on Your Tax Returns
- A Bit of Humor
- Nail Salon Supplier Will be Polishing Up Her Act In Prison
- Your IRS questions answered here
- Question & Answer
- For the foodies … Richard Blais’ Spaghetti with Broccoli Pesto
Olympic Figure Skater Scores
a Zero with Judge
John Baldwin, Jr, who represented the US in figure skating pairs at the 2006 Winter Olympic Games, was indicted with his father, John Baldwin, Sr., by a grand jury on failing to comply with financial reporting obligations from their used car business. Both father and son pled not guilty.
The indictment came after a federal investigation that lasted several years and included a raid on Baldwin Sr.’s home.
The government’s case centers around bank cash deposits from Baldwin Auto Sales. The indictment states that the pair made regular cash deposits under $10,000, which is known as “structuring” as that dollar amount is below the threshold of a bank’s obligation to report the transaction.
According to the government, Wells Fargo Bank shows 194 transactions under $10,000 for a total of $1,060,029. The Baldwin’s state that they have been making the same deposits for years as a majority of their car sales are under $10,000, and 60% of those sales are in cash, and most of their deposits are made at the ATM which only accepts deposits of up to $5,000.
Several plea deals have been offered to the Baldwins’, but they state, “This is extortion from the government, trying to steal money from legitimate citizens, knowing that these legitimate citizens just want this to go away…They’ve tried to intimidate us, they’ve harassed us. Now they’re trying to hold us hostage by trying to make deals with us. If you do this and do that, we won’t take you to court. The answer is no.”
Photo: Figure skater John Baldwin Jr. holds a California flag as he cheers on fellow American Evan Lysacek at the 2006 Winter Olympics in Torino, Italy. (K.C. Alfred / Union-Tribune)
Nail Salon Supplier Will be
Polishing Up Her Act In Prison
Mythi Nguyen, of Troy, MI, pled guilty in District Court to charges of filing a false tax return.
Nguyen owned Y & B Nail Supply located in Madison Heights, MI. From 2009 to 2011, Nguyen underreported her income by more than $1.1 million in gross business sales. The underreporting caused a tax loss to the IRS of $272,680.72.
Nguyen will be sentenced on September 13, 2018, where she could face a maximum prison sentence of three years, supervised release, restitution, and monetary penalties.
A Bit of Humor…
“The government is really asking a lot of us this month — first we’re supposed to count how many people live in our home, then we’re supposed to count how much money we owe them. I actually got confused and accidentally sent a check to the census and a member of my household to the IRS. Sorry, grandma!”
Some of the Worst Tax Cheats in History
Walter Anderson, Telecommunications Tycoon
The 1990s were a prosperous time for numerous American entrepreneurs, but with many, you wouldn’t even know it. Anderson found creative ways to effectively hide his massive income — $365 million to be exact — using offshore tax havens, drop boxes in the Netherlands and shell companies. In 1998, for example, he paid just $495 in taxes after claiming an income of $67,939, when in reality, he earned more than $126 million. He was so well off that he kept a multimillion-dollar art collection and once considered leasing the Mir space station. Anderson, now serving a nine-year prison sentence, claims he’s innocent despite pleading guilty in 2006.
Edward and Elaine Brown, Dental and Pest Business Owners
Ed and Elaine are the Bonnie and Clyde to tax-haters everywhere. Their months-long 2007 standoff in their 110-acre home in New Hampshire, where residents “Live Free or Die,” made national headlines. The incident occurred after the couple was sentenced to 5 years and 3 months in prison for failure to pay federal income tax on $2 million of their income. Fortunately, nobody was injured, even though numerous weapons, ammunition, booby traps and explosive devices were found in their home. Now, Ed and Elaine are serving 37-and 35-year sentences respectively.
Reuben Sturman, Pornographer and Businessman
At one time the world’s biggest distributor of pornography, the late Sturman endured three decades of legal problems resulting from his shady business dealings. Not only was he subject to numerous raids during an era in which pornography wasn’t quite as mainstream as it is today, but he was also involved in numerous criminal activities, forging ties with the Gambino crime family. Not surprisingly, he failed to report $2.7 million in income from 1978 to 1982 — in 1979, he reported just $1,237 in taxable income — and accordingly was convicted of tax evasion and sentenced to 10 years in prison in 1989.
Dennis Kozlowski, Disgraced CEO
Your typical CEO of an American mega-corporation isn’t afraid to exhibit the trappings of his or her success. Kozlowski, the former chairman of Tyco International, was no exception, as he paid $14.7 million for 12 paintings — including a Monet, Renoir and Bouguereau — to proudly display in his Manhattan apartment. The obvious problem: he didn’t pay the accompanying taxes, resulting in his 2002 indictment and eventual agreement to pay $21.2 million to settle charges, $3.2 million of which was in sales tax and interest on the paintings. In the process, Kozlowski and Mark Schwartz, the company’s former financial chief, were convicted of stealing more than $600 million from Tyco. Currently, Kozlowski is serving an 8.33-to 25-year prison sentence.
Source: Criminal Justice USA
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.
Q & A
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?
Yes. A Notice of Federal Tax Lien (NFTL) is public record and is generally filed with the County Recorder where you reside. A federal tax lien will also negatively impact your credit report scores. It is notice to all your other creditors that the IRS has a secured interest in all your real and personal property you have now and acquired in the future.
A federal tax lien will make it very difficult, if not impossible, for you to purchase a home, vehicle and other property on credit. It may also prevent you from accessing the equity in real estate that you may have built up over the years.
However, the IRS has several different solutions that can resolve your NFTL if you qualify. You can resolve a federal tax lien by: paying it in full, or if that is not an option you can find out if you qualify for a “Release of Lien,” a “Lien Subordination,” a “Lien Discharge” or “Lien Withdrawal” It is essential to keep in mind that IRS problems didn’t just happen overnight and will take some time to resolve. The good news is that generally, you won’t have to meet or even speak with the IRS while we’re retained. It’s important to consult with a tax resolution professional to see which Lien relief solutions you may be eligible for before the IRS starts enforcing aggressive collection action against you. We can help protect what you have and preserve your rights!!
**If you have a general question that you would like answered in our next publication, email Jeffrey Schneider. Unfortunately we cannot provide answers to your specific problem.
For the Foodies…
Richard Blais’ Spaghetti with Broccoli Pesto
Last week Jeff traveled to Texas to teach other tax practitioners, EAs, and CPAs federal tax matters.
While he was gone that gave me a great opportunity to have a bit of a binge on pasta and not tempt him with all the carbs that he tries to moderate. The pasta will be Hodgson Mill whole wheat pasta. Yummm. It’s my favorite and I can just taste the nutty texture as I write this article.
With that being said, bring on the pesto, extra, extra, sliced garlic, lots of crushed red pepper flakes and to make it healthy, broccoli. And this recipe just does it for me.
Oh yeah…wine! Gotta have wine with the pasta. But no garlic bread, that borders on serious overkill, even for me!!!
I hope you enjoy this recipe.