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IRS ACCUSES MICHAEL JACKSON ESTATE OF CHEATING ON TAXES
Even in death, singer Michael Jackson can’t escape taxes.
The estate of the King of Pop is now a target of the Internal Revenue Service.
The IRS told executors of Michael Jackson’s estate that it owes $505 million in taxes and another $197 million in penalties, according to documents obtained by the Los Angeles Times.
Executors for Jackson’s estate estimated the singer’s net worth at $7 million at the time of his death in 2009. According to the IRS’s filing, the government disputes the executors’ estimate. Instead, Jackson’s estate was worth $1.125 billion, the government said.
The IRS accused Jackson’s estate of grossly underestimating values. For example, the estate estimated Jackson’s likeness at $2,105. The IRS alleges now that the likeness is worth more than $434 million.
FLORIDA MAN GUILTY OF $1 MILLION TAX EVASION
A Florida man pleaded guilty to evading more than $1 million in taxes.
Walter Medlin, 70, of Kissimmee, Fla., faces up to five years in federal prison.
According to court documents, Medlin received more than $7.5 million in income from the sale of an interest in a landfill.
Rather than report that income on his tax return, he attempted to evade his taxes by using several limited partnerships to conduct transactions for his benefit.
To further conceal the offense, Medlin failed to file a tax return, but submitted requests for extensions in which he falsely represented that he did not owe any taxes.
ARIZ. TAX PREPARER GUILTY OF TAX SCHEME
An Arizona tax preparer was sentenced to 30 month in prison for trying to obstruct and impede U.S. tax laws.
Margarita Gomez, 32, of Tucson, Ariz., was also ordered to pay $200,408 in restitution to the IRS.
Gomez operated a tax return preparation service in Tucson, Ariz., and conducted a scheme to obtain, and to aid others to obtain, the payment of more than $200,000 in federal tax refunds from the IRS.
Gomez admitted to soliciting clients who did not have legal status to work or reside in the United States and to manufacturing fraudulent documentation. Gomez also directed certain federal income tax refunds issued to her clients to be transmitted to either her personal bank account or to a mail drop over which she had control.
GA. DENTIST CONVICTED ON TAX EVASION CHARGE
The operator of dental clinics in Georgia and Alabama kept credit card payments in a separate account to hide the money from the IRS.
A Georgia dentist has pleaded guilty to tax evasion.
Dr. Dayo Obebe, of Muscogee County, Ga., operated the Moon Road Cosmetic and Family Dentistry in Columbus, Ga., and the Brent Dental Dentistry in Brent, Ala.
In 2004, Obebe began to conceal intentionally money he earned from patients who paid with credit cards from his accountants and the IRS by placing credit card payments into a separate bank account from other cash and check receipts.
Consequently, Obebe underreported his total income from the dental practice on his 2004, 2005 and 2006 federal income tax returns by more than $500,000 and falsely claimed a tax refund.
In 2007, the IRS audited Obebe’s tax return. In 2008, Obebe lied during an audit when he stated that he accurately reported his income on his tax return when he knew that he had earned substantially more income over the three-year period than he had reported to the IRS. In total, Obebe evaded paying more $185,000 in tax to the IRS on his 2004, 2005 and 2006 federal income tax returns.
Obebe faces up to five years in prison, three years of supervised release, and a $250,000 fine. In addition, according to the plea agreement, he has agreed to pay restitution to the IRS in the amount of $189,661.
ALASKA MAN GUILTY ON TAX CHARGE
Sister gave the man $20,000 in ill-gotten money. He ‘squandered it partying.’
An Alaska man was sentenced to eight months in prison for not reporting income he received from his sister. That income was in fact stolen money from a Native Alaskan tribe.
James Kramer, 48, of Valdez, Alaska, was also fined $2,000.
According to prosecutors, Kramer’s sister Lori “Sue” Clum was elected as president of the Native Village of Tatitlek in October 2007. Clum was voted out of office in April 2008, but refused to accept the results of the election and maintained control of the tribal bank accounts. She misapplied $112,000 of tribal funds for her personal benefit. Clum gave $20,000 of the funds to her brother. When asked what he did with the $20,000 cash, Kramer said he “squandered it partying.”
Kramer earned a total of $127,800 in income for 2009, including the $20,000 in ill-gotten money he received from his sister. Kramer failed to file tax returns for the tax years 2008 to 2010.
OHIO WOMAN SENTENCED FOR ROLE IN TAX SCHEME
An Ohio woman was sentenced to 19 months in prison and ordered to pay $74,904 in restitution for her role in a scheme to file false and inflated income tax returns.
Kenyada Spates, of Euclid, Ohio, was found guilty of one count of conspiracy to make false claims and nine counts of making false claims.
Spates admitted to helping prepare 35 false income tax returns.
Spates recruited friends and relatives to use as income tax refund claimants. Part of the refund money was deposited into accounts controlled by Spates.
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