15 Jan SFS January 2020 Tax Problem Solutions Newsletter
Inside this edition of the December SFS Tax Problem Solutions Newsletter you can read about: Hillsboro Beach Businessman Indicted for Multiple Crimes, Our Client Successes and testimonial, CPA to the Elite Gambled Away Client’s Money, She Got Caught Trying to Rip Off the System, Another Tax Preparer Taken Down! Charged With Fraud and Defrauding Banks, The ABCs of Tax Resolution Explained – G for Garnishment, What Do I Do? I Didn’t Report My Crypto Trades On Prior Year’s Tax Return?
January 16, 2020
Inside This Edition:
In the News…
• Hillsboro Beach Businessman Indicted for Multiple Crimes
• Our Client Successes
• CPA to the Elite Gambled Away Client’s Money
• She Got Caught Trying to Rip Off the System
• Another Tax Preparer Taken Down! Charged With Fraud and Defrauding Banks
• The ABCs of Tax Resolution Explained – G for Garnishment
• What Do I Do? I Didn’t Report My Crypto Trades On Prior Year’s Tax Return?
Question and Answer
• What Folks Have to Say About Us and a Recent Settlement
• For the foodies…Crispy Sheet Pan Gnocchi and Veggies
• A Bit of Tax Humor
Call 877-355-8010 for more information about our services
In the News!
Hillsboro Beach Businessman Indicted for Multiple Crimes
Vincent Celentano, the owner of several businesses in Florida and Michigan, was indicted for tax evasion, employment tax fraud, and other tax-related crimes.
Celentano was recently accused of using more than $360,000 from his businesses’ bank accounts to pay for personal expenses, including credit card payments and fuel and sundry items for his yacht. During the same year, Celentano sold ownership in entities under his control for approximately 2.7 million dollars. He also asked for payment in a way that kept his accountants from accurately reporting the sale to the IRS. Also, Celentano failed to file his individual tax returns from 2013 to 2016.
From 2013 to 2018, Celentano and others conspired to withhold payroll taxes from his employees and not pay the taxes to the IRS. He used the money to pay for business and personal expenses. When the IRS tried to collect, Celentano and his co-conspirators attempted to thwart their efforts and made false statements to the IRS about who was responsible for paying the taxes. According to the indictment, Celentano failed to pay over $216,700 in payroll taxes.
If convicted, Celentano faces a statutory maximum sentence of five years for each tax evasion and conspiracy charges. He will also receive three years in prison for each count of failure to pay employment taxes. And a statutory maximum sentence of one year on each count of willful failure to file his personal tax returns.
Questions? Contact me: Jeffrey Schneider, EA, CTRS ACT-E, NTPIF at 855-355-8010 or firstname.lastname@example.org.
CPA to the Elite Gambled Away Client’s Money
A gambling addiction led Los Angeles CPA Jonathan Schwartz, the business manager for Alanis Morissette and other well-known performers and athletes, to steal more than seven million dollars from his clients’ accounts.
Schwartz had access to his clients’ bank accounts to pay their bills and get cash for them, but instead, he frequently took money for himself. He concealed the embezzlement by not sending bank statements to his clients. Instead, he sent his clients a prepared statement from GSO Business Management, the firm Schwartz worked for, which contained a false ledger of expenses submitted to the bookkeepers by Schwartz.
Schwartz admitted that between 2010 and 2014, he stole almost five million dollars from Morissette by falsifying records and claiming the expenses were for “sundry/personal” items. He took more than a million dollars from another client and embezzled $737,500 from yet another client.
Schwartz admitted that he failed to file a tax return in 2012 and failed to report nearly one million dollars in income that year. He owes the IRS almost 1.7 million dollars in federal income taxes. Schwartz was sentenced to six years in prison, followed by three years of supervised release. He was ordered to pay $8,657,268 in restitution.
She Got Caught Trying to Rip Off the System
Movita Johnson-Harrell, a member of the Pennsylvania House of Representatives, has resigned from office after being accused of using funds for personal items from a non-profit. She created the tax exempt entity to help people struggling with addiction, poverty, and mental illness. She founded the non-profit, Motivations, Education & Consultation Associates (MECA), after losing four family members, her father, brother, cousin, and son, to gun violence.
She is alleged to have spent more than $500,000 from the charity’s bank accounts to pay personal items, such as vacations, private school tuition for her grandchildren. Also, she bought designer clothes, matching furs for her and her husband and a Porsche. She also funneled money from the account into her state representative campaign. The disgraced politician took money from her clients’ government benefits, which the non-profit controlled to provide housing, and then covered it up by lying on her financial records, and those of the non-profit and her campaign.
Attorney General Josh Shapiro claims that Johnson-Harrell committed tax fraud when she failed to report her MECA spending as income. In addition to making direct transfers to her bank account, Johnson-Harrell wrote numerous checks made out to ‘cash’ whenever she needed extra money. Johnson-Harrell is awaiting trial.
The money from the non-existent books was illegally funneled to her political campaign through a straw company, and used for personal items, including a house. For the tax year 2016, Pugh claimed her taxable income was $31,020, and the tax due was $4,168. In reality, her taxable income was $322,365, and she approximately owed $102,444.
The federal government is hoping to seize a house owned by Pugh worth $770,000. Meanwhile, Pugh’s attorney claims that she is so fragile physically and mentally; she is unable to make “major decisions.” If convicted, she could serve up to 100 years in prison.
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.
Our latest blog, G is for Garnishment is posted.
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.)
Get a FREE copy here, https://www.nowwhathelp.com/
Another Tax Preparer Taken Down! Charged With Fraud and Defrauding Banks
A Port Murray, New Jersey tax preparer Brian Day, pleaded guilty to filing false tax returns and bank fraud in a scheme to misappropriate clients’ money and defraud the IRS.
Day told his clients that they owed more money to the IRS than they did. He instructed them to write checks made out to the IRS and then altered the payee information on the checks to make them payable to one of his tax preparation companies. He made these false claims to at least five individuals, resulting in a loss of $124,289 for his clients.
When two clients questioned him about the checks, he presented them with fake documents he claimed were from the IRS.
Additionally, Day is accused of submitting at least 21 false tax returns to the IRS from tax years 2009 to 2015, resulting in a loss of approximately $491,000 to the IRS.
From 2013 to 2015, he also inflated clients’ tax forms by more than $383,000 to get them larger tax returns.
Day was sentenced to 32 months in prison and ordered to pay nearly $500,000 in restitution.
What Do I Do? I Didn’t Report My Crypto Trades On Prior Year’s Tax Return?
In 2014 the IRS determined that cryptocurrency was property for tax purposes, and there are well-established rules for how to treat property. However, many people aren’t disclosing their cryptocurrency transactions. If you were buying and selling cryptocurrency at any point in the past few years, you need to report these transactions on your annual tax return.
The IRS has ramped up its efforts to go after those that did not correctly report their cryptocurrency-trading on prior years’ tax returns.
Back in the summer of 2019, the IRS mailed some 10,000 letters to crypto account owners to educate crypto account holders about the rules. And tell taxpayers to review their tax reporting for crypto transactions to be sure they reported income correctly.
I own a small business, and to keep the doors open, I did not pay the IRS for my employee’s withholding taxes for a few years. How much trouble will I be in?
Owing 941 payroll taxes is very different than owing personal 1040 income taxes. Not only can the IRS shut down your business, but they can also come after you personally, and levy your bank accounts. They can also take your receivables and seize your property, including your house. Even more frightening is the fact that what might seem to you as a small tax problem could turn into a criminal matter. Why? Because the money was already deducted from your employee’s payroll checks, so it’s not your money, to begin with! The IRS looks at this as if you stole their money.
You need to get help fast from an experienced professional who deals with the IRS every day.
We can assess your situation and figure out the best way to help you, and we will take over all dealings with the IRS, so you don’t have to.
We know the law, we know your rights, we can help!
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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
Crispy Sheet Pan Gnocchi and Veggies
The image might look familiar as I previously made it with tortellini. This recipe calls for gnocchi. I used the packaged variety found on the shelf in the pasta isle.
It is a super easy weeknight recipe that can be prepped ahead of time. Needless to say, I added tons more garlic, lots of fresh basil, rosemary and thyme from my garden and plenty of black pepper. It was so good!
Jeff who is a true carnivore really enjoyed this dish, even without meat or shellfish. Perhaps I will add some jumbo shrimp next time.