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Tax Times Newsletter - May 2006

- Jay Schlichting

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

• Keeping an IRS audit under control
  • Challenge: The IRS selected me for a complete audit, both of my self-employment incomes and rental properties.
  • Solution: The Schlichting Group handled the audit on my behalf. The process took three months, with a great deal of detail and documentation required. The Schlichting Group worked closely with the IRS auditor, creating spreadsheets of expenses for each business activity from my financial statements and receipts.
  • Results: The final assessment was 75 percent below the original estimate of taxes due. In addition, the IRS limited the audit to one year - rather than expanding it to include other years, as can sometimes happen.
• Spreading payments over time
  • Challenge: I failed to file tax returns for four years. When the IRS contacted me, it claimed that I owed thousands in back taxes.
  • Solution: In just two weeks, The Schlichting Group had prepared and filed my missing tax returns. They also negotiated a payment plan - even before the IRS had examined my returns.
  • Results: I was able to pay off my taxes over time. Plus, the entire matter was handled quickly, letting me move on with my life.

TOP NEWS

• Exec: I Evaded $119,579 in Income Taxes
       A corporate executive from Salem, Ore., and formerly of San Ramon, Calif., pleaded guilty to three counts of tax evasion, admitting that he evaded $119,579 in income taxes.
       Robert G. Gardner, 65, was the general manager of Pacific Coast Metals, a metal fabricating corporation owned by his wife. Although he and his wife divorced, he remained at PCM as general manager of the corporation.
       According to the plea agreement, beginning in 1998, Gardner started to receive a smaller salary and began having his ex-wife's company pay his personal expenses. Gardner admitted that during 1998, 1999, and 2000, he took money from PCM in the form of fictitious loans, checks paid to cash, and diverted PCM funds to himself through third parties. Gardner then failed to report the income to the IRS.
       He faces up to five years in prison and a $250,000 fine for each count.
• Telemarketing Sales Director Evaded Taxes
       The sales director for a now-defunct San Diego telemarketing business will spend time behind bars for attempting to evade income taxes for the year 2000.
       Michael Kayser has been sentenced to serve six months in custody, six months in home confinement, and three years of supervised release. Kayser was also ordered to pay $13,408 to the IRS, a fine of $2,000 and a $100 special assessment.
       Kayser was convicted by a federal jury in December 2005 of evading taxes by understating the income he declared on his 2000 individual tax return. According to the evidence presented at trial, Kayser failed to declare about $46,481 he received as commissions from the telemarketing company. He declared other income he earned during that year, but he concealed the income earned from his telemarketing employment, evading $13,408 in additional income tax.
• Man Goes to Prison for False Claims
       A Tennessee man who tried to claim more than $80,000 in false returns will spend time in the hoosegow.
       Tommie Brown Jr., 57, of Memphis, Tenn., was sentenced to 41 months in prison, to be followed by two years of supervised release after pleading guilty to conspiracy to defraud the United States.
       From March 12, 2000, and May 8, 2000, Brown participated in a scheme designed to help himself and others obtain payment of false claims from the IRS by filing false income tax returns for the 1999 tax year. The W-2's contained false wages and federal tax withholdings. The 14 false returns claimed approximately $80,946.17 in fraudulent refunds.

THE ANSWER SPOT

• I'm behind on payroll taxes, and the IRS has visited my business. What should I do?
  The IRS acts very aggressively in payroll tax cases.  It's crucial that you act now to avoid both civil and criminal penalties.  Call today.
   

ASK THE EXPERTS

• I owe close to $100,000 in back taxes. Yes, I know - that's a lot! But I just don't see how I can pay it. My business has gone under, I'm making one-fourth of what I used to, and I feel like I just barely get by. Do I have any options?
       Yes, you do have options. While $100,000 in back taxes is a lot, you should feel better knowing that there are thousands of taxpayers out there with as much tax debt - or even more. They, like you, have options and ways to get out of debt. In your case, since you are making substantially less money than you used to, it sounds like the Offer in Compromise program will be a suitable option.
       Here's how it works:
       The first thing you need to do is find a qualified tax professional who will analyze your previous returns. He or she will be able to determine exactly how much money you owe to the IRS (after all, why pay even a penny more than you owe? Once that figure is determined, you and your qualified tax professional will meet with an IRS agent to discuss the Offer in Compromise program.
       This program was created after the government became sick and tired of chasing down deadbeat taxpayers with no success. The Offer in Compromise program allows taxpayers to make a compromise offer that will settle the tax debt once and for all. Oftentimes, this settlement offer amounts to pennies on the dollar.
       If your financial situation has drastically changed and you have little possibility of paying down the debt, the IRS likely will agree to participate in the Offer in Compromise program. They will determine how much you can realistically afford and come up with a new settlement figure that often amounts to, as I said, pennies on the dollar.
       I'm an IRS Problem Solver. I handle tough tax cases like yours every day. For a free, no-risk consultation, call my office at 1-877-590-2500.

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