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Tax Times Newsletter - August 2005

- Jay Schlichting

SUCCESS STORIES
We help real people with real tax issues - successfully.

• Fighting for a fair payment plan
  • Challenge: I wanted to give the IRS the taxes that I owed. But some large medical expenses made it impossible for me to pay. At first, the IRS said it would accept an installment agreement with low payments I could afford. Then suddenly, the IRS changed its mind. They refused to consider my medical expenses and demanded much higher payments.
  • Solution: The Schlichting Group appealed the decision, asking that the IRS once again take my medical expenses into account when calculating my payment agreement. The IRS did not respond for six months. The Schlichting Group then filed a Taxpayer Assistance Order. Through the Taxpayer Advocate's office, The Schlichting Group reached an IRS regional director.
  • Results: The regional director overturned the IRS rejection. As a result, they accepted my original payment agreement. Since it spans seven years, I can afford my monthly payments.
• Protecting an innocent spouse
  • Challenge: As a CPA, I carefully filed my own tax return each year. After I married my husband, he informed me that he had not filed a tax return in 12 years.
  • Solution: I called The Schlichting Group. Together, we filed a post-nuptial agreement, which protected my personal assets from the IRS. The Schlichting Group then went to work resolving my husband's $83,000 tax debt.
  • Results: After negotiations with the IRS, my husband owed only $6,000. Best of all, the retirement savings I worked to accumulate before we got married is safe.

TOP NEWS

• Former ESPN Reporter Gets 11 Months for Evasion
       Adrian K. Karsten, a former ESPN sportscaster and winner of a 1991 Emmy Award, was sentenced by a U.S. district judge in Wisconsin to 11 months in prison for tax evasion.
       Karsten, who pleaded guilty to two counts of failing to file federal income tax returns for the years 2000 and 2002, was also sentenced to nine months of home confinement, which will include electronic monitoring, as part of his two-year probation.
       During the two tax years in question, Karsten received more than $600,000 in income from ESPN, where he reported from the sidelines of football games and served as a writer-producer for SportsCenter.
       By failing to file tax returns, Karsten did not pay federal income taxes totaling $167,000. Under the terms of his sentence, Karsten, who has now filed tax returns for the years in question, is required to cooperate with the IRS in the collection of these taxes as well as any penalties and interest.
• Dry Cleaner Tried to Evade $325k in Taxes
       The owner of two dry-cleaning establishments in Michigan was sentenced to 15 months in prison after he tried to evade paying about $325,000 in federal income taxes.
       From 1996 to 1998, Riza Selenica, 38, who operated Euro Express in Birmingham and Southfield, Mich., accepted checks as payments from customers but then failed to deposit those checks in his business account, according to the government. Selenica instead deposited the checks into his personal account, attempting to conceal the income from the federal government.
       During these years, Selenica filed false 1996, 1997 and 1998 federal income tax returns, claiming $0 gross income or, as on the 1998 return, showing gross income of $48,747 when his joint taxable income with his spouse during those years totaled more than $980,000. Total tax loss to the IRS was calculated at approximately $325,000.
• Tax Fraud Promoters Get Prison Time
       Five people associated with a tax fraud group known as "We the People" have been sentenced to federal prison for promoting bogus tax shelters that falsely promised to lower federal income taxes.
       The leader of the operation, Lynne Meredith, 55, of Sunset Beach, Calif., was sentenced yesterday to 121 months in prison. A federal jury last year convicted Meredith of conspiracy, four counts of mail fraud, two counts of using a false social security number, making a false statement in a passport application and five counts of failing to file a tax return.
       Meredith and her co-defendants - Gayle Bybee, 57, Gregory Paul Karl, 55, Teresa Manharth Giordano, 42, and Willie Watts, 46 - were sentenced in Los Angeles. In sentencing Meredith, U.S. District Judge Dean D. Pregerson said her ideas on tax laws were "delusional."
       Meredith wrote books, including How to Cook a Vulture and Vultures in Eagle's Clothing, in which she falsely claimed that individuals could stop paying income taxes, stop their employers from withholding income taxes, and refuse to produce books and records to the IRS.

THE ANSWER SPOT

• I'm self-employed and not sure about how to file my return. Can I still list deductions?
  Even if you don't have good documentation, we can help you file the best possible tax return.  Call today, and we'll walk you through the process.
   

ASK THE EXPERTS

• I'm at my wit's end. I owe a huge amount to the IRS in back taxes, thanks to a combination of unpaid income and capital gains taxes, and now I'm wondering if I'll ever get free of debt. Is there anything I can do? I simply don't have the money to pay the tax debt!
       You're not alone. Thousands of American taxpayers are in the exact same situation you are. For a variety of reasons, it's not uncommon for taxpayers to get way behind on their tax debt. At the same time, it's not the end of the world - although it might seem like it.
       As a taxpayer, you have a number of rights and options available to you. Since you obviously owe a large amount in taxes, the first thing you should do is consult with a qualified tax professional. He or she will analyze your tax filings in question, ensuring that you are not paying even a penny more than you owe.
       Once you have the exact figure of your tax debt, you and your qualified tax professional will meet with an IRS agent. You'll likely have two options:

1) An Offer in Compromise - This program allows taxpayers, in certain cases in which they cannot pay the debt they owe, to make a compromise offer. Often, this offer amounts to pennies on the dollar. That's right - you can reduce your tax debt to an amount you can afford. Once that new amount is paid, your tax debt is erased.
2) Installment Agreement - For taxpayers who still have the financial ability to pay their tax debt but cannot pay it all at once, the IRS offers this Installment Agreement. After negotiating an agreement with the IRS, you can begin to pay down your tax debt with small monthly installments. That way, you can settle your debt without, say, losing your house.

I deal with problems such as yours every day. I'm an IRS Problem Solver with years of experience dealing with the IRS. I think you'll find much of the IRS-related stress you currently feel will be alleviated with one visit. For a free, no-risk consultation, please call my office toll free at 1-877-590-2500.

Tax Times Newsletter is an online Publication by
The Schlichting Group
Specialists in IRS Representation and Tax Preparation