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10 05, 2009

Dentist’s Pyramid of Unpaid Payroll Taxes and Unfiled Returns Bring Indictment

By Allan|2020-02-12T14:20:20-05:00May 10th, 2009|100% Penalty, IRS Enforcement, IRS News, IRS Power, Payroll Tax, Tax Crimes, Trust Fund Recovery Penalty, Withholding Tax|2 Comments

If dentist Arlan R. Turley treated his teeth the way the Government alleges he’s treated his tax-filing obligations, he’d have cavities and one heck of a case of bloody, bad gums.

This 60-year-old Arizona man was indicted on two counts of willful failure to file a tax return and 20 counts of willful failure to pay over taxes. Turley operated the East Valley Dental Service in Mesa, Ariz.

The indictment alleges that the charges for failure to file are the result of Turley’s non-filing of his 2002 and 2003 income tax returns. In addition, Turley has not filed an individual tax return for a whole decade: 1997 to 2007.

The charges for failure to pay over taxes arise from Turley allegedly not turning over his employees’ payroll taxes to the government, again and again. (See https://pearlmanlaw.wpengine.com/not-just-for-bernie-madoff-or-king-tut-business-owners-build-devastating-pyramids-of-withholding-tax-debt-deducted-from-paychecks-but-not-sent-to-irs/ .)

If convicted, Turley faces up to five years in prison and a fine of up to $250,000.

6 05, 2009

Not Just for Bernie Madoff or King Tut, Business Owners Build Devastating Pyramids of Withholding Tax Debt Deducted From Paychecks But Not Sent to IRS

By Allan|2020-02-12T14:20:20-05:00May 6th, 2009|100% Penalty, IRS Collection, IRS Enforcement, IRS Power, Payroll Tax, Pierce the Corporate Veil, Pyramiding, Trust Fund Recovery Penalty, Withholding Tax|1 Comment

What do they call it when a business owner withholds payroll taxes from his or her employees’ paychecks, spends that money on other expenses, doesn’t send the withholding tax payment to the IRS, then, does the same thing again, and then again, and then again?

The “again and again” part is called “pyramiding”: the employer is pyramiding its failure to pay one payment period after another, growing the company’s debt to the government astronomically.

Another way to describe it is digging the hole deeper, and deeper. (Recall Bill Clinton’s sensible advice: If you’re in a hole, first thing: stop digging.)

The act of failing to pay to the IRS (actually the U.S. Treasury) is a way to live especially dangerously for business owners, managers, and decision makers at the company. James Bond thinks he’s living dangerously? Feh!

The reason it is so dangerous is: The IRS has the power to hold the owners, managers, and decision-makers at the company personally responsible for the unpaid withholding tax with little more than the stroke of a pen. (This is called the “Trust Fund Recovery Penalty.”)

With this extraordinary power, the IRS can “pierce the corporate veil” with an ease unknown to ordinary creditors. Once it does, this liability is NOT deductible and it is NOT dischargable in bankruptcy. So there is a triple-whammy which can be devastating, and “pyramiding” the debt multiplies the problem.

This triple-whammy is then magnified further by the state tax dept, if the business is in a state which has an income tax; States have similarly huge, extraordinary powers and often the state is even tougher than the IRS.

18 04, 2009

Punditocracy Scorecard: Allan R. Pearlman Quoted re IRS Security Breaches

By Allan|2020-02-12T14:20:20-05:00April 18th, 2009|IRS Computer Security, Tax Privacy|0 Comments

A reporter for the monthly periodical, Infotech & Telecom News, recently asked me about the IRS’s practices and procedures for protecting taxpayers’ confidential personal information.

He then quoted me in an article titled “IRS Computer Security Procedures Criticized,” which just came out, in the April 2009 issue.

You can see it online by clicking on this link: http://www.heartland.org/policybot/results/24863/IRS_Computer_Security_Procedures_Criticized.html or by using this shorter link: http://tinyurl.com/cvn2fq.

2 04, 2009

B-Rod (former Ill Gov Rod Blagojevich) Indicted on Federal Corruption Charges

By Allan|2020-02-12T14:20:20-05:00April 2nd, 2009|Politician|0 Comments

A federal grand jury handed down a nineteen count indictment against ousted former Illinois Governor, Rod Blagojevich. Copied below is the criminal complaint from December 2008, which preceded the indictment.

Publish at Scribd or explore others: School Work Legal rod blagojevich federal courts

30 03, 2009

Update on spin-master senator who explained the cause of an oil tanker spill

By Allan|2020-02-12T14:20:20-05:00March 30th, 2009|Oil Spill, Politician|0 Comments

About two weeks ago I posted the amazing and funny video of an interview with someone referred to as “senator” who answered questions about a shipping mishap off the coast of Australia, in which 20,000 tons of crude oil was spilled because “the front fell off” of the tanker carrying it. See https://pearlmanlaw.wpengine.com/oil-tanker-spill-explained-by-spin-master-senator/

My post asked who this fellow is (regrettably, perhaps, we are not super-current on Australian politics).

A reader from Australia wrote in to say that this was a well regarded Aussie comedy team who “specialise in ‘Taking the Mickey’ out of current affairs.” He added that they are “Not liked by Aussie politicians.”

It turns out that they are the comedy team of John Clarke and Bryan Dawe. They’ve been at it a long time, and are regular contributors to Austrialian ABC television’s “The 7:30 Report” (self-described as “the ABC’s national flagship current affairs program, compered by one of Australia’s most respected and experienced journalists, Kerry O’Brien”). For a large collection of their political and news-event inspired comedy, see http://www.abc.net.au/7.30/clarkedawe.htm. They are all over youtube as well.

What a great thing, to be introduced to a clever, funny political comedy team from another country, on the other side of the world.

Thinking back, it all started when a former client emailed the video of Clarke and Dawe discussing how “the front fell off” to me. Then, once posted here, a reader of this blog clued me in to who these guys (Clarke and Dawe) are. Then, search engines and Wikipedia helped fill in some of the blanks.

25 03, 2009

The House (Probably) Can Tell Us Which Bailout Recipients Owe the IRS — And Should

By Allan|2020-02-12T14:20:21-05:00March 25th, 2009|Bailout, Federal Tax Lien, IRS Collection, IRS Enforcement, IRS Power, Tax Policy, Tax Privacy|0 Comments

One has to wonder if the House Ways and Means Committee’s subcommittee on oversight got it right when it told reporters that it could not legally release the names of the companies who received bailout money while owing back taxes, two of which owe more than $100 million each. (See Associated Press article, “Some Getting Bailout Cash Owe Millions In Back Taxes,” in the New York Times on 3/20/2009 A19 col. 6.)

Ordinarily, a taxpayer’s tax information, whether it is an individual or a business, is treated as very private, very secret. In fact, IRS employees can be, and are, fired, criminally charged, convicted, and sentenced for the Unauthorized Inspection of Tax Return Information or Accessing of Tax Account Information.

But, when a taxpayer is late in paying a tax bill, these super-strong privacy rules don’t fully apply anymore.

(more…)

18 03, 2009

IRS Clarifies Position on Tax Consquences of Ponzi Schemes

By Allan|2020-02-12T14:20:21-05:00March 18th, 2009|IRS Power, Ponzi Scheme, Tax Policy, Tax Problem Solving|0 Comments

In the wake of the unravelling of uber-Ponzi schemer Bernard Madoff’s scam, the IRS has announced new guidance on how it will handle the tax consequences of being a victim of a Ponzi scheme — whether Madoff’s or any one else’s.

Yesterday, March 17th, IRS Commissioner Doug Shulman described the agency’s position in testimony before the Senate Finance Committee:

The investor is entitled to a theft loss, which is not a capital loss. In other words, a theft loss from a Ponzi-type investment scheme is not subject to the normal limits on losses from investments, which typically limit the loss deduction to $3,000 per year when it exceeds capital gains from investments.

The revenue ruling clarifies that “investment” theft losses are not subject to limitations that are applicable to “personal” casualty and theft losses. The loss is deductible as an itemized deduction, but is not subject to the 10 percent of AGI reduction or the $100 reduction that applies to many casualty and theft loss deductions (more…)

16 03, 2009

Oil Tanker Spill Explained by Spin Master Senator

By Allan|2020-02-12T14:20:21-05:00March 16th, 2009|Oil Spill, Politician|3 Comments

Listen as this seasoned pol tows us all “beyond the environment” in his amazing explanation of how 20,000 barrels of crude oil spilled from an oil tanker. Lucky for us, most oil tankers “are built so that the front doesn’t fall off at all.” (You’ve got to see and hear him to fully appreciate it. Click below.)

Could John Cleese or Eric Idle of Monty Python’s Flying Circus have come up with something zanier than this Australian politician’s (a Senator?) comments?

And, if anyone can tell me who this guy is, or the interviewer, or when it was done, I would love to know. — Any Australians in the house — you might know them! Now, without further ado, the video, please.

15 03, 2009

Ma-and-Pa Ponzi Schemers Sentenced for Medical Research Tax Scam and $10M Ponzi Scheme

By Allan|2020-02-12T14:20:21-05:00March 15th, 2009|Ponzi Scheme, Tax Crimes, Uncategorized|1 Comment

In the wake of master swindler and former NASDAQ chairman, Bernard Madoff’s $65-billion dollar, multi-decade, worldwide Ponzi scheme, it might seem like scams are popping up everywhere one looks..

In this context, in January, 2009, a U.S. Justice Department announcement reports that Ponzi-schemer-or-collaborator Shirley G. Graybill, 72, of North Haven, Conn., was sentenced to two years of probation — the first four months of which she must spend in home confinement. She had pleaded guilty in June, 2005 to one count of making and subscribing to a false 2002 tax return.

What happened between the June 2005 guilty plea and the three-and-a-half-year later sentencing announcement?

According to court records, the Triple Diamond Foundation was an entity created by Graybill and her husband, Dale L. Graybill, purportedly to fund cancer research, but which did not have tax-exempt status from the IRS. The Graybills controlled the Triple Diamond Foundation and its bank account. And apparently, they were quite adept at using that bank account. (more…)

12 03, 2009

IRS Commissioner to Taxpayers: Come Get Your 2005 Refund Money Before it’s Gone!

By Allan|2020-02-12T14:20:21-05:00March 12th, 2009|IRS Power, Limits on IRS Power, Statute of Limitations, Tax Refund|0 Comments

In what appears to be a continuing bid to tell taxpayers that in the current economic downturn the IRS “feels our pain,” has become a kinder, gentler government agency and tax collector, and even perhaps that the days of being a “no more Mr. Niceguy” government agency have passed into the days of “No more ‘no more Mr. Niceguy,'” IRS Commissioner Doug Shulman recently reminded taxpayers who may be owed a refund for 2005, but have not yet filed their income tax returns for 2005, to claim that refund by filing their return and to do so quickly to avoid losing it.

This may qualify as a continuing effort in light of Commissioner Shulman’s “I feel your pain” comments, published by the IRS in early January, 2009. See Feb 5, 2009 post in this blog, “IRS to Bail Out Taxpayers?” below.

IRS estimates that there is roughly $1.3 billion in unclaimed refunds for tax year 2005 awaiting more than a million taxpayers around the country. (more…)