Stanley H. Block’s…

IRS Times & Inquirer^™

“Read About Taxpayers with IRS Problems &
Learn Helpful Tips on How To End Them.”

Learn how to avoid IRS problems and solve them if you find yourself with one!

Volume VII, Issue 4   -   www.mdtaxattorney.com

Owner of Dietary Business Pleads Guilty to Tax Charges

The former owner of Geral Vital International, a company in Marina Del Ray, Calif., that marketed dietary supplements to senior citizens, has pleaded guilty to tax charges after the government alleged that he inflated his business expenses to evade millions of dollars in corporate taxes.

Now a resident of Miami Beach, 60-year-old Almon Glenn Braswell pleaded guilty to the felony charge and admitted a tax liability of $10,455,367. What’s more, Braswell has admitted that he has the money to pay the debt. As part of the plea agreement, he agreed to make full payment to the Internal Revenue Service in the next three weeks.

Also as part of the plea, Braswell has agreed to cooperate with the government in providing information on others who helped him evade taxes. He will serve 18 months in prison. However, if a federal judge determines that Braswell does cooperate as promised, he will receive 41 months in prison.
 

Florida Man Convicted in Tax Evasion Scheme

A Florida man who used a series of offshore trusts to conceal $2.5 million in corporate income from 1996 to 1999 has been convicted by a federal jury of four counts of income tax evasion.

According to evidence presented at trial, William L. Tiner purchased the AEGIS trust system promoted out of Chicago for $100,000. He then used a series of domestic and foreign trusts and foreign companies to conceal profits from his Clearwater software company, successfully evading $900,000 in income taxes over the four-year tax period.

Tiner faces up to five years in prison and $250,000 fine for each of the tax evasion charges and three years in prison and a $250,000 fine for each of the false tax return counts.
 

Calif. Man Receives 21 Months for Evasion

Francis Cosmo Manfred, a resident of Carlsbad, Calif., was sentenced to 21 months in prison after pleading guilty to tax evasion charges that alleged he underreported his 1997, 1998 and 1999 incomes by substantial amounts.

As part of his plea, Manfred admitted that he filed a false income tax return for the tax year 1998, falsely reporting income in the amount of $278,033 when he knew his income well exceeded this amount. Manfred also admitted that he evaded his income taxes by diverting commissions he received from TLC Investment and Trade Company to other individuals and corporations that he owned.

During the tax years 1997 to 1999, Manfred failed to report commissions in excess of $1 million, resulting in a tax loss of $476,364.
 

West Hartford Man Pleads Guilty To Tax Fraud

A West Hartford, Ct., man who was the owner and sole shareholder of two insurance companies has pleaded guilty to a two-count indictment charging him with tax fraud.

Marc C. Abrahms, 55, the former president of Abrahms Group Benefits Inc. and Abrahms Life Services, admitted that for the years 1997 to 2000, he filed false corporate income tax returns in which he claimed deductions for approximately $729,000 worth of non-business-related expenses, including payments for domestic help, household services, personal travel and other expenses for personal benefit.

According to trial evidence, Abrahms listed more than $500,000 in payments to his girlfriend and sons as salary payments, despite the fact that none of them worked for the company.

Also written off as business expenses were bills associates with his son’s bar mitzvah, a 50th birthday party and a planned wedding reception. In all, he evaded $297,525 in taxes.

He faces up to six years in prison and a five of up to $250,000.
 

IRS Question Corner …
 
Question: I owned a business in the late ’90s that boomed during the skyrocketing dot-com era. Although my business was a well-oiled machine, my accounting was a mess. In fact, after the market went bust, I learned that I owed $140,000 in payroll taxes to the IRS. I don’t have that kind of money now, and an IRS agent is threatening levies. What can I do?

Answer: Yours is definitely a situation in which you should consult a qualified tax professional. Obviously, the IRS is aware that you owe a considerable amount of money. And for one reason or another, your revenue officer is determined to collect, even if it requires levies.

The first thing you and your qualified tax professional should do is analyze the company’s books, if available, to determine the exact amount you owe in back payroll taxes. If mistakes were made here, it’s quite possible that you may owe the federal much, much less than $140,000.

But let’s assume for now that you do owe such a substantial amount. You have options. If indeed you do not have assets or the means to pay this debt, you can choose to file an Offer in Compromise. This is generally a cash offer meant to settle your debt once and for all. Oftentimes, believe it or not, a settlement offer that amounts to pennies on the dollar will be accepted if the IRS believes that is the best method to collect the debt.

On the other hand, if you do have the means to settle the tax debt, you may qualify for an installment agreement. Under this program, you and your qualified tax professional will work out an agreement with the IRS that will allow you to make small monthly payments that will satisfy your debt over time.

Although having an IRS agent on your trail is a scary, scary thing, you should remember that you have rights and options. Right now is the best time for you to have an advocate, someone who knows how to deal with the IRS. That’s what I do — I’m an IRS Problem Solver. For a free, no-risk consultation, call my office at 410-727-6006.
 

NASHVILLE MAN CHARGED AFTER FAILING TO DECLARE INCOME
Roderick C. Pounds, Sr., of Nashville, Tenn., has been charged in a one-count indictment that alleges he filed a false tax return.

According to the government, Pounds filed an IRS Form 1040PC for calendar year 1999 that reported $26,000 in employment income when he actually received about $61,677 in income that year. He faces up to three years in prison and a fine of up to $250,000 on this charge.
 

DELAWARE BUILDER CONVICTED ON TAX EVASION CHARGES
Donald L. Donovan, the 53-year-old former owner of a company that constructed pre-engineered steel buildings in Seaford, Del., was convicted of four counts of attempted tax evasion for the years 1996 to 1999. Donovan was also convicted of four counts of willful failure to file income tax returns for the same years.

According to the indictment, Donovan attempted to conceal his income from the IRS by using a personal bank account that listed a fictitious Social Security number and provided customers with false Social Security numbers for 1099 forms.

In his defense, Donovan argued that federal income tax laws do not apply to him. The jury rejected that defense.
 

KENTUCKY MAN PLEADS TO EMBEZZLEMENT
AND TAX EVASION
Angelo W. DeSimone, a 48-year-old former resident of northern Kentucky now living in Tampa, Fla., was sentenced to 37 months in prison and ordered to pay $370,828.55 in restitution to the IRS after embezzling money from a company that owned eight Burger Kings in the Cincinnati area. DeSimone pleaded guilty to leading a five-year scheme to embezzle funds and not report the income to the IRS.
 

ELECTRICIAN PLEADS GUILTY TO FILING
FALSE TAX RETURNS
Ronald W. Greer of Goodlettsville, Tenn., has pleaded guilty to two counts of filing false tax returns with the Internal Revenue Service. Greer, a self-employed electrician, under-reported his income by at least $84,000 on his 1995 return and by at least $77,000 on his 1996 return, resulting in a tax loss to the government totaling at least $51,000. Greer faces up to three years in prison and a fine of up to $250,000 on each charge.



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