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Tax Times Newsletter - June 2006

- Jay Schlichting

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

• Paying off a multi-year tax bill
  • Challenge: Over a period of 11 years, I wracked up a tax bill of about $650,000.
  • Solution: The Schlichting Group took on my case. They kept the IRS at bay and started negotiations.
  • Results: The IRS accepted an offer in compromise. They took the equity in my home, which was $93,000, and absolved me of any remaining debts.
• Kissing expensive IRS penalties goodbye
  • Challenge: Because of financial circumstances beyond my control, my software development company was forced to make delinquent payroll tax deposits for two quarters. The IRS assessed penalties of almost $17,000.
  • Solution: The Schlichting Group presented my case before the IRS.
  • Results: Thanks to their convincing arguments and tough negotiations, The Schlichting Group was successful at getting the penalties removed.

TOP NEWS

• 'Survivor' Winner Sentenced to 51 Months in Prison
       The winner of the first season of CBS's popular show Survivor now has a new challenge - survive 51 months in the hoosegow.
       A federal judge sentenced Richard Hatch, of Newport, R.I., to 51 months in prison for evading income taxes. In January, a jury found him guilty of tax evasion for not reporting to the IRS about $1.4 million that he earned from Survivor and other sources.
       "In addition to punishing this defendant, this sentence should serve as a warning to others who might think of dodging their tax obligations," U.S. Attorney Robert Clark Corrente said in a prepared statement. "Paying taxes is an ordeal, but it is every citizen's obligation to pay them honestly and fully."
       "Our nation's federal tax system is not a reality show to be outwitted - it is a reality, period," said Eileen J. O'Connor, Assistant Attorney General of the Justice Department's Tax Division.
• Houston Radiologist Hit with Tax Charges
       A Houston-area radiologist was arrested on tax charges after a federal grand jury in Austin indicted him on two counts of making and subscribing to a false return and six counts of willful failure to file federal income tax returns.
       According to the indictment, Charles Thomas Clayton, of The Woodlands, Texas, submitted false tax returns for the years 1997 and 1998, claiming a refund of more than $160,000 for those years. In addition, Clayton failed to file timely federal personal income tax returns for calendar years 1999 to 2004, despite receiving more than $1.5 million in gross income during those years.  If convicted, Clayton faces up to three years in prison.
• Idaho Bingo Operators Indicted on Tax Charges
       Robert J. Ford and William J. Tway, the operators of Big Bucks Bingo in Garden City, Idaho, have been charged with tax fraud and conspiracy for allegedly overstating the percentage of bingo revenues that went to charity.
       Ford and Tway have run Big Bucks Bingo since 1996 under a provision in the state constitution that permits bingo and raffle games operated by qualified charitable organizations.
       A related state law requires that at least 20 percent of the annual gross revenues of the games must be given to charitable or nonprofit organizations to be used for charitable purposes.
       For the year 1999, the indictment alleges, Ford and Tway reported charitable contributions of $159,988; for 2000, the amount reported was 57,000. In both cases, the grand jury charged, the amount actually given to charity was substantially less.
  The two men face up to three years in prison on the tax-fraud charges and up to five years in prison on the conspiracy charge.

THE ANSWER SPOT

• I don't mind paying the taxes, but don't want to pay the penalties and interest. Can we get rid of that?
  Yes! Under certain circumstances, the IRS will abate penalties and the interest on the penalties.  To do this, you must establish "reasonable cause."  We can help determine if you qualify.
   

ASK THE EXPERTS

• Tell me about the Offer in Compromise program: Who qualifies for it and how do I know if it's right for me? I owe a substantial amount in back taxes.
       While I would need to know much more about your situation to tell you for certain whether you qualify for the Offer in Compromise program, I'm more than happy to tell you about how the program works in general.
       After too many long years of chasing down deadbeat taxpayers, the IRS realized that cooperation can often be the best tool for collections. Taxpayers who feel their debt is absolutely insurmountable are unlikely to pay up, the IRS discovered.
       Enter the Offer in Compromise program. Through this program, a taxpayer can negotiate a settlement amount with the IRS that often amounts to pennies on the dollar. With the help of a qualified tax professional, you can sit down with the IRS and negotiate a settlement amount that you realistically can pay. This negotiated settlement amount will take care of your IRS debt once and for all.
       It's that simple. If for whatever reason you owe back taxes that you cannot afford to pay, the Offer in Compromise program might be for you. First, consult a qualified tax professional who will analyze your previous returns and figure out whether the Offer in Compromise program is right for you.
       Now, keep in mind that the IRS will perform due diligence: If you live an extravagant lifestyle and just want to weasel out of tax debt, the IRS won't fall for it. But if you legitimately have incurred huge tax debts that you cannot pay, the program is right for you. And you literally can reduce that debt by pennies on the dollar.
       If you're losing sleep because of tax debt, it's time to make changes. I deal with cases such as yours every day, and I can help make that tax debt go away. 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