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IRS Times & Inquirer^™

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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 7   -   www.mdtaxattorney.com

Public Official Indicted on Tax Charges

A former engineer with the Miami-Dade County Fire Rescue Department was indicted last month on tax charges.

According to an indictment issued by U.S. Attorney Marcos Daniel Jiménez, Istvan Steven Fazekas was, as part of his public duties, responsible for evaluating and approving fire sprinkler plans for compliance with building and safety codes. At the same time, Fazekas was receiving money from fire sprinkler design companies.

Fazekas failed to report the additional income on his taxes, the indictment alleges. If convicted, he faces up to five years in prison.

Former Cape Code Physician Convicted

A former Cape Cod physician has pleaded guilty to failing to file individual income tax returns for the years 1997, 1998 and 1999, despite earning more than nearly $1 million in gross income during those years.

Kenneth E. Smith, 59, formerly of Osterville and Centerville, Mass., and currently of Hilton Head, S.C., pleaded guilty following a three-count information field by the federal government.

According to the federal prosecutor, had Smith not taken a plea, the evidence would have shown that the doctor from 1997 to 1999 had received significant income from his medical practice, Hyannis OB-GYN Associates.

In fact, that income exceeded $800,000. Despite the six-figure income, Smith did not file tax returns reporting his income and did not pay the taxes that were due on the income.

He faces up to one year in prison for each of the three counts.
 

Gov’t: Lawyer, Wife Tried to Defraud IRS

When Richard and Tracy Corona’s tenants received notices from the IRS that they should make their monthly rent payments to the government, Tracy Corona simply told them to ignore the notices, the government alleges in a five-count indictment against the California attorney and his wife.

From May 1997 to October 2001, the government alleges, the Coronas attempted to defraud the IRS by first questioning the government’s right to tax them, asserting that they were not U.S. citizens but instead “natural born free American National Sovereign Citizen of the California Republic.”

Additionally, Richard Corona concealed his ownership of Park Centre Properties, which owned commercial real estate in San Diego, by creating a fake trust, the indictment alleges. In all, from 1997 to 2001, the couple earned $2.5 million in income and avoided paying nearly $600,000 in taxes.
 

Tech Manager Sentenced for Tax Fraud

An Alabama computer manager was sentenced to 37 months in prison, plus three years of supervised release, for a scam in which he bilked a healthcare company and then did not report proceeds as income.

According to U.S. Attorney Alice H. Martin, 41-year-old Timothy V. Buckner, of Springville, Ala., managed the computer systems at Eastern Health System in Birmingham. While employed there, Buckner created a fake business, Network Services Inc., an unincorporated entity which allegedly provided computer services to Eastern Health. However, the company consisted of nothing more than letterhead, a mail-drop, and a checking account set up with Buckner’s wife’s Social Security number.

Bucker then submitted bogus claims to Eastern Health System in the name of Network Services. In all, he received $273,000 in income from the scam. He then deposited the proceeds. What’s more, Buckner did not report the proceeds as income on his 1999, 2000 and 2001 federal tax returns. That ultimately led to his conviction. “All income, from whatever source, is taxable income, even income generated by fraud,” said Martin in a statement. “Convictions for healthcare fraud and tax fraud carry stiff sentences.”
 

IRS Question Corner …
 
Question: I’ve been seeing some signs on the side of the road lately that advertise: SETTLE YOUR TAX DEBT FOR PENNIES ON THE DOLLAR. I’m pretty wary of any business advertising with picket signs in the median, but I had heard that it was indeed possible to settle your tax debt for a substantial amount lower than you owe. I’m particularly interested because I currently owe $94,000 in back taxes. Is this program true, and would it be available to me?

Answer:  You’re probably wise to be wary of businesses advertising with roadside picket signs. Although they may be legitimate, there are a lot of scammers out there — and some of them do claim to work in the tax field.

But, yes, it’s true that you can settle your tax debt for pennies on the dollar! But make sure you hire a qualified tax professional to guide you through the process. It requires a delicate, graceful dance with IRS agents.

Here’s how it works: Realizing that the agents most likely will be unable to collect anything if they hound taxpayers for debts they simply cannot pay, the IRS instituted the Offer in Compromise program as a way to get something while, at the same time, allowing taxpayers to settle up. If you can prove that you do not have the economic means (or will not have the economic means in the near future), you may be eligible for the program.

The first step will be for a qualified tax professional to analyze your previous returns, making sure that you are not overestimating your tax debt. Once the true figure is established, your tax professional will negotiate with an IRS agent the amount of money you can pay in order to satisfy your debt. Oftentimes, this really is pennies on the dollar! Obviously, if you’re driving around in a new BMW, the IRS might not welcome you into the Offer in Compromise program. But if you can prove you do not have the financial means to pay off your debt, this program could be exactly what you need.

Why don’t you give me a call? I’m an IRS Problem Solver. For a free, no-risk consultation, call my office at 410-727-6006.
 

DELAWARE MAN ALLEGEDLY UNDERREPORTED INCOME BY $500,000
A federal grand jury in Delaware has indicted 42-year-old Ronald J. Saggese, of Centerville, Del., on three counts of tax evasion for the years 1996, 1997 and 1998, alleging that he underreported his taxable income by about $500,000.

He faces up to five years in prison and a $250,000 fine for each count.

MD. MAN INDICTED
FOR TAX PERJURY
 Ellicott City resident Syrakes Shah, 35, was indicted by a federal grand jury on three counts of tax evasion.

According to trial evidence, Shah prepared and filed false tax returns for the years 1999, 2000 and 2001 in which he reported taxable income in the amounts of $724, $3,166 and $11,672, respectively. However, Shah knew that he had substantial additional taxable income which he did not report.

Shah faces up to three years in prison and a fine of up to $250,000 for each count.

TOWING COMPANY OWNER CHARGED WITH TAX EVASION
 A Mansfield, Mass., man was charged with two counts of filing false and fraudulent federal income tax returns.

According to the indictment, Jeffrey Margolin owned a Brighton-based company called J.D. Towing. According to the government, from 1997 to 1998, Margolin filed tax returns that falsely understated the net profit from the business by artificially inflating expenses. Specifically, Margolin allegedly overstated J.D. Towing’s business expenses by about $97,000 over the two-year period.

If convicted, he faces up to 5 years in prison.
 

ALABAMA MAN GETS 15 MONTHS FOR EVASION
Ronald Terry Regan, a 61-year-old resident of Selma, Ala., was sentenced to 15 months in prison for making a false statement on his 1997 federal income tax return. Regan pleaded guilty to diverting $169,042 of his employer’s funds to pay personal expenses. However, he only reported $35,440 of these funds on his federal income tax return.

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