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 1   -   www.mdtaxattorney.com

Smuggler, Tax Shelter Operator Convicted

A South Florida man accused of smuggling into the United States ozone-depleting refrigerant chemicals known as Freon and hiding the income in tax shelters has been convicted of tax evasion and money laundering.

Marc M. Harris was found guilty on 14 counts in all. Trial evidence showed that Harris conspired to evade federal excise taxes on the sale of Freon to customers in South Florida by filing phony paperwork to hide sales of illegally imported Freon. Harris then used shell corporations and bank accounts to hide the income, resulting in a tax loss of approximately $6.2 million between January 1993 and June 1994. In some cases, Harris laundered money through wire transfers to Panamanian corporations and bank accounts.

Harris faces up to five years in prison for each of the two tax charges and up to 20 years in prison for each of the 12 money laundering charges.
 

Periodontist Pleads Guilty to Tax Evasion

A St. Louis periodontist pleaded guilty to filing false tax returns for the years 1996 to 1998 and now faces up to nine years in prison.

According to court documents, prior to 1996, the 54-year-old Linda Marilyn Weaks deposited all non-cash business receipts into one main bank account and reported the deposits to her accountant. In 1996, however, Weaks opened second bank account and began to deposit some business income into that account while not notifying her accountant of the receipts, causing her income tax filings from 1996 to 1998 to be false. Additionally, when Weaks received cash payments during those years, she did not report the income.

In all, Weaks was responsible for $39,026 in tax loss. In addition to possible prison time, she faces up to a $100,000 fine for each of the three counts.
 

N.J. Restaurateurs Admit Tax Evasion

The former principals and shareholders of two New Jersey restaurants called Company B’s admitted in court to attempting to evade $835,800 in payroll and sales taxes from 1993 to 2000.

Christopher T. Bruton, 44, of Suffern, N.Y., and Leon Badick, 40, of Congers, N.Y., underreported the total salary and wages paid to the employees by approximately $2.8 million in order to evade approximately $477,407 in payroll taxes, according to information filed with the court. The restaurateurs also concealed $358,397 in collected sales taxes.

Each faces up to five years in prison and a $250,000 fine.
 

Purported Bishop Gets 7 Years for Defrauding IRS

A North Carolina man who claimed to be a reverend and a bishop received seven years in prison after he was found guilty of conspiracy and federal tax violations in connection with workshops that instructed people on how to defraud the IRS.

Frank Lesters Bowden, 52, of Goldsboro, N.C., filed IRS forms used to report trust income in the names of several taxpayers, trial evidence showed. However, none of the taxpayers for whom the forms were filed operated trust accounts. All of the figures were fabricated.

Additionally, Bowden held seminars at his church and home that showed other taxpayers how to file such false IRS forms for personal economic gain. He also apparently told people about a fictitious place called “Washitaw Nation,” an area purportedly populated by tax protesters who have Washitaw-issued birth certificates and driver’s licenses.

Bowden charged $100 in cash to prepare fraudulent IRS forms for other American taxpayers. He worked in connection with a 42-year-old woman named Vickie Jones Peele, who was sentenced earlier to 18 months for her role in the scam.
 

IRS Question Corner …
 
Question: I have my own business, and I do my own taxes. It’s a one-man operation, but I make a good living. I also like to have complete control over the business. That’s why I do my own taxes, I guess. Wasn’t that a mistake! I got some advice online, read a few books, and made a number of write-offs on last year’s return. That resulted in an IRS audit. Now the government says I owe $25,000 in back taxes. I can’t pay that tomorrow. What can I do?

Answer: You’re not the first person I’ve talked to who has suffered this fate. Small-business owners who do their own taxes often research write-offs to reduce the amount owed. They sometimes get bad information and often become overzealous and write off expenses that aren’t allowed by law. That can raise red flags and result in audits, such as the one you received.

From your question, it sounds like you do have the financial resources to pay the $25,000 tax bill, even though you do not have the immediate cash available. For this reason, your best action would be to consult with a qualified tax professional about hammering out an agreement with the IRS that would allow you to make installments.

IRS agents realize that few people have large sums of liquid capital available. How many people can cut a check for $25,000 on command? Not many. That’s why the IRS provides installment plans. For qualifying taxpayers, the IRS allows debtors to pay a small monthly amount over a set period of time. It’s similar to the way you pay your mortgage or car loan.

Keep in mind, however, that the $25,000 figure may not be accurate. You may actually owe much less. A qualified tax professional will analyze your previous tax return, expenses and receipts to find the exact amount owed. This could be thousands of dollars below what you currently think you owe. Following that process, your tax professional can discuss an installment plan with the IRS.

I solve problems such as yours every day. That’s what I do: I’m an IRS Problem Solver. For a free, no-risk consultation, call my office at 410-727-6006.

 

HEALTHCARE BUSINESS OWNER ADMITS TO FRAUD, TAX EVASION
Harry Kwabena Ossei, 44, the owner of two healthcare businesses in Washington County, Minn., was sentenced to one year in prison and ordered to pay $255,608 after pleading guilty to fraud and tax evasion charges.
Ossei admitted that, from 1996 to 2001, he defrauded Medicare for 255,608 by submitting false claims. He then failed to report the fraudulent income on his tax return.
 

FOUR IN CALIFORNIA INDICTED FOR TAX REFUND SCHEME
Four people from the Fresno, Calif., area have been indicted for allegedly creating a scheme to collect false tax refund checks.

Jaime Sierra Torres, 32; Virginia Ramos, 47; Ramos’ sister, Oralia Barajas de Torres, 50; and Barajas de Torres’ son, Jose Barajas Torres, 27, allegedly filed income tax returns that listed employers who did not employ the alleged wage earner and then claimed wages that would make the wage earner eligible for a tax refund.

The four defendants used their home addresses and post office boxes to receive the fraudulent refund checks, which the defendants then cashed at various check-cashing establishments throughout California’s Central Valley. If convicted, the defendants each face up to 10 years in prison and a fine of up to $250,000.
 

TEXAS MAN GETS 33 MONTHS IN PRISON
Tyree Burks, of Arlington, Texas, was sentenced to 33 months and ordered to pay $4,175 in restitution after he pleaded guilty to filing a false income tax return. Burks admitted that he filed a 1998 personal tax return that contained a false amount of earned income and income withheld, resulting in a fraudulent tax refund.
 

TAX EVADER RECEIVES
21 MONTHS IN PRISON
Kenneth O’Kane, of Houston, Texas, was sentenced to 21 months in prison after a two-day bench trial proved that O’Kane had evaded more than $68,000 in taxes from 1994 to 1997. O’Kane, who worked at a car dealership, had told his employer that he was exempt from federal income tax withholdings. To further conceal his income, O’Kane used the Social Security number of his child for income reported on IRS 1099 forms, evidence showed.



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- L. East
 

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