Inside This Issue …
of Nonprofit Hit With Tax Charges
Store Owner Pleads Guilty to Evasion
Store Evaded Taxes
Convicted Of Conspiracy and Tax Fraud
Receives 5 Years
Board Officers Charged in Tax Fraud Scheme
Web Designer Sentenced For Tax Fraud
Protestor Faces 87
Nursing Home Manager Sentenced On Embezzlement, Tax Evasion Charges
of Nonprofit Hit With Tax Charges
former CEO of the Redwood Family Clinic, a nonprofit healthcare clinic for
uninsured patients in Vallejo, Calif., has been indicted for embezzlement
and tax evasion. Osa Marie Healy, 44, of Vacaville, Calif., pleaded not
guilty to 30 counts of embezzlement and two counts of tax evasion.
Healy allegedly wrote more than 100 unauthorized clinic checks to herself,
including payments for dental care, kitchen appliances, construction of a
$15,000 pool, her home mortgage, and her residential utilities, according
to the indictment. Healy also allegedly failed to report the income on her
1999 and 2000 income tax returns.
Healy faces up to 10 years in prison for each embezzlement charge and up
to three years in prison for each tax charge.
The clinic received funding from Medicare, Medi-Cal and other public
programs. On June 17, 2003, another former CEO of the clinic, Lisa Jo
Baird, pleaded guilty to embezzlement and filing a false tax return.
Computer Store Owner Pleads Guilty to
The owner of a Beltsville, Md., computer retail store pleaded guilty to
tax evasion for the year 1997. Leon Chen, 43, of Silver Springs, Md.,
admitted that during the years 1994 to 1997 he reported income from
Computech in excess of $196,144. But during the same period, Chen did not
report substantial cash sales from Computech.
Chen then admitted to trying to evade taxes by reporting his 1997 income
as $61,845 and the amount of tax due as $11,955. However, Chen’s actual
taxable income for 1997 was $407,895. He, in fact, owed $123,882.30.
He faces up to five years in prison and $100,000 in fines.
Grocery Store Evaded Taxes
Vinh Phat Supermarket, Inc., a grocery store located at 6105A Stockton
Blvd. in Sacramento, Calif., pleaded guilty to one count of willfully
filing a false corporation income tax return for the calendar year 1995.
According to court evidence, Vinh Phat Supermarket, Inc., filed a
corporate income tax return reporting $9,250,608 in gross business
receipts and $1,410,071 in total business income. The corporation’s actual
income, however, was substantially more.
As part of the plea agreement, Vinh Phat Supermarket, Inc., agreed to pay
a $250,000 fine.
Board Officers Charged in Tax Fraud Scheme
A federal grand jury in October indicted
two members of the Northridge Water District Board, in Sacramento, Calif.,
with one count of conspiracy to defraud the United States, six counts of
tax evasion, and six counts of mail fraud.
Dewight Frances Kramer, 80, and Jerry Allan Ness, 61, both of Sacramento,
were employed as the general manager and assistant general manager of the
Northridge Water District. Together, they conspired to conceal from the
IRS hundreds of thousands of dollars in taxable income earned by
themselves and other NWD employees, according to the indictment.
From 1999 to 2001, Kramer and Ness caused payments made by NWD for sick
leave or vacation “buy backs,” bonuses, and salary advances to be
identified as “accounts payable” in order to conceal income from the IRS.
In addition, the two are charged with tax evasion. Kramer allegedly failed
to report $200,000 in income from 1999 to 2001, while Ness failed to
report $120,000 in income during the same period.
If convicted of the conspiracy, mail fraud and tax evasion charges, Kramer
and Ness each face up to five years in prison and a fine of up to
Question Corner …
Question: It’s gotten to the point that my taxes are literally
out of control. On advice I’d heard a long time ago, I’ve continued to
file my taxes but have not paid them for five years. I always figured I’d
catch up and reconcile with the IRS. Well, I haven’t caught up, but I’d
still like to reconcile. What can I do? I owe $98,500. But I’m lucky to
have $4,000 in liquid assets — assuming I sell my car.
Answer: Whoever gave you that advice early on was a smart
man. Not filing a personal income tax return is a criminal offense. Even
though you did not have the money to pay your tax debt, your filing year
after year may be the reason you’re not behind bars right now.
Your situation seems a bit extreme, but not at all uncommon. In fact, 26.3
million Americans owe money in back taxes. While the IRS does get a bad
rap for being an aggressive, sometimes unfriendly agency, the rap is
generally undeserved. Most IRS agents are more than happy to work with
taxpayers in difficult situations such as yours.
The first thing you should do is consult with a qualified tax
professional. Since it sounds like you were doing your own taxes, the
first step a tax professional will take is to examine your filings with a
fine-toothed comb. This procedure will often reduce your tax debt by
thousands of dollars. After all, you don’t want to pay the IRS anything
more than you owe.
At that point, you and your tax professional will meet with the IRS and
present what’s called an Offer in Compromise. In this procedure, you tell
the federal government what assets you have, what your current earning
potential is, and how much of your tax debt you can reasonably pay. In
many cases, people who present an Offer in Compromise reduce their tax
debt by pennies on the dollar, meaning that $98,500 tax debt will shrink
to an amount you can reasonably pay.
It’s that simple. I’ve handled many cases like yours and helped clients
abolish their tax problem. That’s what I do. I’m an IRS Problem Solver.
For a free, no-risk consultation, please call my office at 410-727-6006.
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positive comments and referrals from people just like you.
I just couldn’t do it without you!
MASS. MAN CONVICTED OF CONSPIRACY AND
Roland Joy, a 36-year-old from Medford, Mass., was convicted by a jury
of one count of conspiracy to obstruct the collection of taxes by the IRS
and one count of filing a false tax return for the year 1995.
According to evidence presented during the the six-day trial, Stoneham
Towing, Inc., from 1993 to 1995, paid cash wages to Joy and other
employees to avoid having to pay significant amounts of payroll tax. Joy
and the company’s principals then tried to obstruct an IRS. Joy also
failed to report the wages on his personal income tax return.
Joy faces up to five years’ in prison and a $250,000 fine on the
conspiracy conviction and three years in prison and $250,000 fine on the
false tax return conviction.
N.H. MAN RECEIVES 5 YEARS
Brian J. Thibeault, 37, of Goffstown, N.H., was sentenced to five
years of probation and ordered to pay a $30,000 fine after pleading guilty
to failing to file a federal income tax return.
According to the indictment, Thibeault earned $476,007 for the year 1997.
He admitted to the court that he knew he was required to file an income
tax return. The IRS Criminal Investigation Division had investigated
SAN DIEGO WEB DESIGNER SENTENCED FOR
After pleading guilty to willfully filing a false income tax return
for the year 2000, Brian Lee Petrosian was sentenced to five months in
prison and five months in a community confinement center.
According to the plea agreement, Petrosian is the president and sole
shareholder of Bellagio Insurance, Ltd., a corporation created under the
laws of the British Virgin Islands. Petrosian formed Bellagio for the
purpose of creating false insurance expense deductions for his Web design
company, Web Design, Inc.
Petrosian paid more than $420,000 to Bellagio Insurance from Web Design’s
bank account. The words “Insurance Premium” were handwritten in the memo
section of these checks. Petrosian, however, maintained full control of
Bellagio’s bank account at all times.
TEXAS TAX PROTESTOR FACES 87 YEARS
Tax protestor Royce Coleman McCarley was convicted in absentia on all
29 counts of a federal indictment that charged him with various tax
violations. The jury deliberated less than one hour in finding him guilty.
McCarley, who chose to represent himself, disappeared from court on the
third day. He faces up to 87 years in prison.
FORMER NURSING HOME MANAGER SENTENCED
ON EMBEZZLEMENT, TAX EVASION CHARGES
Carita Walton Harbin, 54, of Dora, Ala., was sentenced to 15 months in
prison on charges of embezzlement and tax evasion charges. She was also
ordered to pay $159,162. Harbin had pleaded guilty to embezzling more than
$150,000 between 1997 and 2000 while she was office manager of Cordova
Health Care Center. Harbin then did report the money as income on her 2000
Thanks for the Kind Words!
“You and your staff worked very hard in helping me settle my case with the
IRS. Your professionalism, courtesy, friendliness and hard work certainly
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- L. East
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