June 2020 Tax Problem Solutions Newsletter

Inside this edition of the June SFS Tax Problem Solutions Newsletter, you can read about: What To Do When You Receive the Dreaded Letter from the IRS, The IRS Returns, But This Tax Preparer Taketh, An Attorney is Going to Jail, A Buffet of Lies and Deceit, The ABCs of Tax Resolution Explained – L is for Lien and Levy, More Interesting Reading… Question and Answer, Kind Words From a Satisfied Client, For the foodies, and A Bit of Tax Humor.

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June 12, 2020

Jeffrey Schneider, EA -Jeff Headshot
IRS Problem Solver
Tax Controversy Specialist, Lecturer and
Author of the Now What Help! series

Call 877-355-8010 for more information about our services

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In the News!

The IRS Returns, But This Tax Preparer Taketh

Michigan tax preparer, Mark Alan Patterson, has been charged with wire fraud. Patterson worked for Shuster Tax Service as a tax return preparer from 2015 until February 2020, when the fraud was discovered.

He is accused of stealing a portion of his clients’ tax refunds by directing parts of the refunds into accounts that he controlled. Patterson hid his crime by giving his clients unfiled versions of returns. The returns showed they were owed a smaller refund amount than what they were due.

Jennifer Shuster Semer, the owner of Shuster Tax service, discovered the fraud and alerted law enforcement. In a review of returns filed by Patterson, Shuster found approximately 120 client tax returns dating back to 2015 that had refunds electronically diverted into accounts controlled by Patterson. Semer calculated an approximate loss to her clients of over $400,000.

Patterson faces up to 20 years in federal prison.

A Five Star Review 

“Jeff and his staff have helped our family through our tax troubles in the past. And I know he’ll continue in the future.”
~ Don & Georgia Musante

An Attorney is Going to Jail

New Jersey attorney Douglas M. Long pleaded guilty to evading more than $250,000 in federal taxes on income generated from his law firm. Long, managing partner of Long & Marmero LLP, had primary control over the firm’s finances and supervised its bookkeeper. He used the company’s bank accounts to pay for school tuition payments for his children, utilities and service fees for his homes, student loan payments for himself and his wife, and other personal expenses.

Long had the firm’s bookkeeper classify those payments as law firm business expenses to avoid his tax obligations. Also, he declared that his personal tax returns for tax years 2012 through 2015 were true and accurate when they were not.

During that time, Long concealed over $800,000 in personal income and evaded payment of over $250,000 in taxes owed to the IRS. It including $368,000 in income and $120,000 in taxes for the tax year 2014.

This was not Long’s first encounter with the law. In 2016 he was reprimanded by the state’s Office of Attorney Ethics for not supervising a bookkeeper who used almost $200,000 in client deposits that should have been held in trust for firm expenses including overdraft fees and paying back personal loans.

Long’s current tax evasion charge carries a maximum sentence of five years in prison and a potential fine of $250,000, or twice the gross gain or loss from the offense. In addition to the guilty plea, Long agreed to pay restitution to the IRS.

A Buffet of Lies and Deceit

The owners of the New China Buffet and Grill in Tennessee were charged with employment and income tax fraud, conspiracy to harbor illegal aliens and money laundering. Quanwei Shi and Chongqiang Chen, both 29, are accused of hiring undocumented workers from China and Guatemala to work at their restaurant. They did not require the workers to complete any forms related to immigration status and paid them in cash.

The indictment states that Shi evaded payroll taxes by failing to withhold $175,455 from the workers’ payments. Shi is also accused of signing and filing false forms with the IRS that underreported the business gross receipts for tax years 2017 and 2018.

The illegal workers, who lived with Shi and Chen, were transported to the restaurant daily and ordered to work in the kitchen, where they could not interact with the restaurant’s customers.

The defendants face up to 20 years in prison.

The ABCs of Tax Resolution Explained

 

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 a series of ongoing blogs, “The ABCs of Tax Resolution Explained” that will provide you with an overview of many of these terms and concepts.

Learn more about audits in our latest blog, L is Lien and Levy.

Read the blogs at The Tax Resolution ABCs Explained

For a complete explanation about the notices you may receive, download Now What? I Got a Notice from the IRS. Help!

For Your FREE copy click here, https://www.nowwhathelp.com/

Q&A- hand with marker

Question:

I do not have the funds to pay what I owe for my 2018 income tax return. I also was late in filing the return. Not only is the IRS demanding the tax I owe, but they have slapped on these enormous amounts for penalties and interest. I had extenuating circumstances that caused all of this. This isn’t fair. What can I do?

Answer:

We can request the removal (abatement) of penalties in two ways: 1) “First Time” Penalty Abatement and 2) a Reasonable Cause Argument. The IRS writes off billions of dollars in penalties every year, but you must know how to do it correctly. A First Time Penalty Abatement (FTP) can be requested if you have a “clean” compliance record, meaning you have not incurred a Failure to File or Failure to Pay penalty for the three years before you are requesting relief for. FTP is generally granted in most cases, regardless of what the underlying reason is. But you must be eligible.

If you do not qualify under FTP, there are nine leading “Reasonable Cause” arguments to get your penalties removed. They are 1) Death, Serious Illness, 2) Fire, Casualty or Natural Disaster 3) Unable to Obtain Records (a common issue with couples going through a divorce) 4) Mistake was made by the taxpayer or tax preparer, 5) Erroneous Advice or Reliance on a tax preparer 6) Written/Oral Advice from the IRS 7) Ignorance of Tax Laws 8) Reasonable Cause/Ordinary Business Care and Prudence 9) Undue Economic Hardship.

Your Tax Resolution Specialist will guide through what documentation we will need to submit a formal legal request in writing. For instance, let’s say you were going through a divorce and you ex-spouse withheld records from you that is needed to file a complete and accurate income tax return and you filed your return late because of this. You could request abatement of these penalties using one of the above reasonable cause arguments, specifically #3 above.

Our clients generally NEVER meet or speak with the IRS. We handle everything for you so you don’t have to take time away from your job or business to deal with all of the IRS’s paperwork. Don’t let them walk all over you. We know the law. We know your rights. We can help!

The Now What Help! Series

Defining and deconstructing the scary and confusing letters that land in your mailbox. Jeff defines and deconstructs the scary and confusing letters in a fashion that mixes attention to detail with humor and an intricate clarification of what is what in the world of the IRS.
The books are available in paperback and ebook on
Now What? I Want to Prepare My Tax Return. Help! book cover- jeffrey schneider EA
book 2- now what help

How can I help you?

If you have a state or federal tax problem or just want to refer a friend, relative or client, I’d love to hear from you. I provide a no-obligation, confidential consultation to help you solve your IRS problems.

Call us today and let’s get to work solving your tax problem 877.355.8010 or book your appointment online, https://meetme.so/SFSTax

877.355.8010
Jeffrey Schneider,
EA, CTRS, ACT-E NTPI Fellow
Email: jeff@sfstaxacct.com
738A Colorado Ave
Stuart, FL 34994
www.sfstaxproblemsolutions.com

GARLIC PARMESAN CHICKEN WINGS IN AN AIR FRYER

Chicken wings are the go-to food when I am too lazy to cook dinner, have no lunch in the fridge or Jeff has a craving. You can always find individual-sized portions in the freeze. Defrost and add fried onions.

This recipe was a change from the more traditional Buffalo Wings and Jeff endorses them. Enjoy!

Find the recipe on the SFS Tax Problem Solution Pinterest page along with other pins and videos.

A Bit of Tax Humor…

An IRS agent is walking through the park when a mugger jumps out and yells “Give me all your money!”. The IRS agent says, “You can’t do this after all I work for the IRS.” At which point, the
mugger yells: “OK, give me all MY money!”
From Crush the CPA

SFS Tax Problem Solutions
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