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Tax Times Newsletter - September 2005

- Jay Schlichting

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

• Filing returns - even without the records
  • Challenge: My wife passed away suddenly, and my life was in extreme disarray.  When I went to my wife's office to pick up her belongings, I was shocked to discover that all of our personal records had been thrown away shortly after her death. Soon after, I received a letter from the IRS complaining that I had not filed my latest tax return. Although I remembered mailing it myself, the copies and all supporting documentation had been thrown away.
  • Solution: One meeting with Jay Schlichting allayed all of my fears. The Schlichting Group created a tax return the IRS would accept, even though I didn't have any records.
  • Results: I am totally out of IRS trouble. In fact, I plan to have The Schlichting Group file my personal tax returns every year.
• Saving thousands for a troubled taxpayer
  • Challenge: After failing to pay estimated taxes for several years, I owed the IRS more than $50,000.
    Solution: The Schlichting Group negotiated with the IRS. They also helped me get current with my estimated payments.
    Results: My debt was reduced from $50,000 to $4,000. And thanks to The Schlichting Group's help, I will never be faced with this problem again.
     

TOP NEWS

• Aspen Resident Obstructed IRS Investigation
       An Aspen resident has pleaded guilty to obstructing a tax investigation in an attempt to thwart an effort by the Internal Revenue Service to verify the legitimacy of his tax filings.
       George S. Gradow, 65, is scheduled to be sentenced December 19. Gradow had previously waived his right to indictment by a federal grand jury and was charged by criminal information on June 6.
       According to court records, from August 21, 2000, to March 14, 2001, Gradow allegedly obstructed and impeded the IRS by destroying, altering and/or creating documents and directing corporate employees to destroy or fabricate documents that would be used by an IRS Revenue Agent during an audit of tax returns of the defendant's corporation.
       Specifically, Gradow instructed the chief financial officer of his corporation, the Churchill Group, to forward to him original promissory notes and real estate leases. He then altered the interest rates and due dates on the promissory notes and changed the terms of the leases.
• Bookmaker Pleads Guilty to Tax Evasion
       A bookmaker in Cherokee County, Alabama, near Birmingham, pleaded guilty to three counts of federal excise tax evasion.
       According to prosecutors, James "Frog" West, 61, of Centre, Alabama, operated a bookmaking operation and received hundreds of thousands of dollars in wagers from bettors each month that he did not report to the IRS and for which did not pay federal excise taxes. Federal law requires that a monthly report be filed each month with the IRS and that a 2% excise tax be paid on all wagers - a technicality given the fact that the gambling operation itself was illegal.
       West admitted to managing the illegal operation and has cooperated with law enforcement officials in an ongoing investigation into public corruption in Cherokee County.
       West faces up to 15 years in prison and a fine of up to $300,000.
• Texas Man Sentenced to 1 Year for Evasion
       A Texas businessman has been sentenced to one year in prison and fined $20,000 after pleading guilty to tax evasion.
  David L. Hirschfeld, of San Angelo, Texas, pleaded guilty in February to a one-count information charging him with income tax evasion.
       During the calendar year 1996, according to court records, Hirschfeld was the president and CEO of Hirschfeld Steel Co., Inc. As a part of the Hirschfeld Steel's business operations, the company produced scrap metal as a byproduct of its manufacturing process. The scrap metal had to be discarded, but instead of throwing it away, Hirschfeld Steel sold the scrap metal to Acme Iron and Metal Company, another Texas company.
       In 1996, Acme paid $140,000 cash for eight shipments of scrap metal. After accounting for business expenses, Hirschfeld received a $67,049 profit from the Acme sale. However, he did not report the income. The sales to Acme continued through 2000, and by then, Hirschfeld received a total of $240,514.16 that he did not report as income to the IRS. The total in income taxes that he evaded was $67,343.96.

THE ANSWER SPOT

• I heard that the IRS will settle for cents on the dollar. Is that true?
  Yes! The IRS will settle if you qualify.  Call for a free consultation and analysis to see what you can do under this remarkable program.
   

ASK THE EXPERTS

• To me, the Offer in Compromise sounds just like one of those get-rich-quick schemes on late-night television: too good to be true. Does it really exist? And if so, how is it that the federal government can offer such a program?
       Yes, the Offer in Compromise does indeed exist. And no, it's not too good to be true.
       To understand why such a program exists, first consider the circumstances. The IRS's job is to collect taxes. Over the years, the agency learned that chasing taxpayers for debts they cannot pay will not result in collections. Someone can't pay with money they don't have, right? So the Offer in Compromise program came into effect to allow taxpayers with substantial tax debts to negotiate a price that they can afford.
       For most taxpayers with substantial tax debt, here's how it would work: They would first consult with a qualified tax professional who would closely analyze their previous tax return. This is to ensure that the taxpayer is not volunteering to pay even a penny more than he/she owes.
       Once the qualified tax professional has the exact debt figure, he/she will then consult with the IRS. Assuming the taxpayer qualifies for the Offer in Compromise program, the qualified tax professional will negotiate a settlement that often amounts to pennies on the dollar. That's right, through this program, you can substantially reduce the amount of taxes you owe.
       Now, please realize that this program isn't for everyone. Asking to participate in the program while driving a $100,000 automobile likely won't go over well with the IRS. But participating in the program also won't put at risk your ability to continue sending your children to college. For taxpayers with substantial debt, the Offer in Compromise program is win-win.
       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