08 May May 2020 Tax Problem Solutions Newsletter
Inside this edition of the May SFS Tax Problem Solutions Newsletter, you can read about: What To Do When You Receive the Dreaded Letter from the IRS, Warranty Fraud Got this Texan a Warrant for his Arrest, Florida Tax Evader Gets to See the World From a Jail Cell, Dentist Has a Brush with the Law and Loses, Executive Assistant to Jail?, The ABCs of Tax Resolution Explained – K is for Knowing Your Rights, More Interesting Reading… Question and Answer, Kind Words From a Satisfied Client, For the foodies and A Bit of Tax Humor.
May 8, 2020
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In the News!
Warranty Fraud Got this Texan a Warrant for his Arrest
Vaughn Simon, from Pearland, Texas, was charged with filing a false tax return, tax evasion, and mail and wire fraud for a scheme involving manufacturers’ warranties. Simon obtained serial numbers for products sold by Cisco, Neat, iRobot, and APC and then submitted false warranty claims. Simon claimed the products had defects he knew could not be solved, and the respective companies sent him replacement products for items he never purchased in the first place. Simon then sold the products on eBay and Amazon.
Simon attempted to obtain more than five million dollars worth of products and was successful in getting more than three million dollars’ worth of products from Cisco alone.
Simon filed false tax returns for 2014 and 2016, where he under-reported his income by $95,000 and $212,000, respectively. He evaded taxes altogether in 2015 by failing to file a return and storing the proceeds of his fraud in bank accounts and PayPal accounts in the names of his co-conspirators. He also hid cash at home, paid his living expenses with cash, used false domain names, prepaid gift cards, and false identities.
He faces a maximum sentence of 821 years in prison, five years of supervised release, and a fine of $8,250,000.
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Florida Tax Evader Gets to See the World From a Jail Cell
Palm Beach County businessman Dusko Bruer pleaded guilty to tax evasion and failure to file a Report of Foreign Bank or Financial Account.
Bruer owned a company that bought the U.S. made agricultural machinery and parts and sold them throughout the world. From 2003 Bruer did not receive a salary, but he used millions of dollars from the company’s bank accounts to pay his personal expenses, including the purchase of a yacht for $1,350,000, a waterfront home in Florida for $1,650,000, a home for an employee and real property in Serbia.
From 2007 to 2011, Bruer transferred 5.8 million dollars of the company’s profits to foreign financial accounts in Croatia, Germany, Serbia, and Switzerland. Between 2007 and 2014, Bruer failed to report more than 7.7 million dollars in income and did not pay taxes of more than 2.7 million dollars.
Bruer’s company never filed a corporate tax return and never paid any taxes. The company had a number of employees but never filed employment tax returns, and did not withhold and pay over payroll taxes.
From 1999 to 2014, Bruer didn’t file a personal tax return and didn’t pay any taxes on his income. In 2015 Credit Suisse closed his account in Switzerland, which at one point had a value of $6,177,586, and advised Bruer to enter the IRS’s Offshore Voluntary Disclosure Program by which taxpayers could avoid criminal prosecution by making a voluntary disclosure to the IRS. Instead, Bruer filed a ‘quiet’ disclosure that involved filing several delinquent tax returns.
Bruer faces a maximum sentence of five years in prison for each charge, three years of supervised release, restitution, and monetary penalties.
Dentist Has a Brush with the Law and Loses
A federal jury has convicted Frederick Kriemelmeyer, a Wisconsin dentist, on four counts of tax evasion. In 2007 Kriemelmeyer was ordered to pay the IRS $135,337 for unpaid income taxes. The dentist ignored the order, and by 2012 the debt to the IRS was more than $450,000, including taxes, interest, and penalties.
Kriemelmeyer took numerous steps to avoid paying the taxes owed. From 2013 to 2015, he failed to file tax returns reporting the income from his dental practice, directed his patients to pay him in cash or by check with blank payee lines, and paid his business and personal expenses with third party checks and cash.
Court orders showed that Kriemelmeyer had been in trouble with the IRS numerous times, with tax claims filed against him going back to the 1990s.
Kriemelmeyer faces a maximum sentence of five years in prison for each count of tax evasion, along with monetary penalties and restitution.
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, K is for Knowing Your Rights.
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!
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If you needed heart surgery, would you shop around for the least expensive surgeon, or would you get the very best you can find? The same holds for dealing with the Internal Revenue Service. Having IRS problems can ruin all aspects of your life, your marriage, relationships with your children and family members, your employment, ability to buy a house, a car, money for retirement, or even have a bank account. You want the best possible person for the job, not the cheapest.
Did you know that your IRS debt doubles every 6-8 years due to the daily compounding effect of interest and penalties? The IRS has at least ten years to collect from you. Therefore, giving your tax problem to the lowest bidder in town is probably not a wise decision. You’ll have peace of mind and sleep better at night knowing that we’re working hard on your case to get you the lowest possible settlement, allowed by law, with the IRS!
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Bananas Foster Bread
Along with many other folks that sheltered at home, I have hopped on the food train. I have been baking banana bread! I found this recipe on Pinterest, and it is delicious. I suppose the rum has something to do with it.
Jeff and I like chocolate, so I added chocolate chips. Dad, on the other hand, is a nut person, so I tossed in walnuts. Perhaps a combo of chips and nuts would be even better. Make it your own with the add-ins.