20 02, 2017

The Anti-Loophole: The “Voluntary” Tax Which is Not So Voluntary

By Allan|2020-04-06T21:22:51-04:00February 20th, 2017|IRS Collection, Tax, Tax Crimes, tax evasion|0 Comments

Once again, we are confronted with the truth the our “voluntary” tax system is not entirely voluntary after all. As Dan Ackroyd said on Saturday Night Live in the 90s, playing then-presidential contender, Bob Dole as he berated then-President, Bill Clinton, “You know it, I know it, and the American People know it.”

But, apparently, North Carolinian, Chet Lee West, didn’t know it. Or so he acted. He was convicted in District Court of three counts of tax evasion. West, acting as his own attorney at trial, stated in his closing arguments that the jurors should ‘see the truth and set me free.” The jurors did not agree with his statement and reached the guilty verdict in only 1 hour.

Owing more than $52,800 in back taxes, West, claimed he found a loophole in the tax code that freed him from having to pay income taxes. West attempted to read from a book containing federal tax codes but the judge had him stop, explaining that she would instruct the jurors what the law is.

During the trial, West admitted that he had not filed taxes since 2000 and had sent a letter to the IRS explaining that he elected to not be subject to income tax. (Now that is an election almost everyone could support – at least until one considers Supreme Court Justice Oliver Wendell Holmes’s take on this issue. Holmes famously said: “I like to pay taxes. With them I buy civilization.”) The IRS responded to West’s “election not to be subject to income tax” with a letter back to West informing him that American citizens cannot opt out of paying taxes.

Donald J. Kleine, the Federal prosecutor said that West knew he had an obligation to pay his taxes but, “just didn’t want to.”

West was sentenced to Federal prison for a term of more than 4 years and ordered to pay restitution to the Internal Revenue Service in the amount of $439,515.

2 07, 2016

Bakery Owner Can’t Have His (unpaid tax obligation) Cake and Eat It Too

By Allan|2020-02-12T14:20:16-05:00July 2nd, 2016|100% Penalty, Tax, Tax Crimes, tax evasion|0 Comments

One baker seems to have gotten caught with his fingers in the cookie jar:

Owner of Kasia’s Bakery in New Britain, CT Marian Kobryn pled guilty to tax evasion by operating his business on a cash-only basis and not reporting the cash income or (of course) paying tax on it. From 2010 to 2013, sales totaling $730,860 were deposited into personal bank accounts usually under $10,000 to evade bank’s currency transaction reporting requirements (another illegal practice known as “structuring.”

Pleading guilty to one count of making a false statement of a federal tax return, Kobryn was sentenced to time served due to serious health issues, Kobryn has been ordered to pay restitution in the amount of $435,00 to cover back taxes owed, hence being compelled to restore that raided cookie jar.

21 10, 2015

Allan Pearlman Radio Interview: Tax Tricks, Trips and Traps

By Allan|2020-02-12T14:20:16-05:00October 21st, 2015|Audits, IRS Collection, IRS Enforcement, Penalties, Tax, Tax Penalties, Tax Problem Solving|0 Comments

People and the news devote lots of attention to important dates like April 15th — tax return filing day — and October 15th — the second filing deadline for all the taxpayers who got automatic extension of the April 15th deadline. In fact for many of us, the IRS and other taxing authorities demand attention on many other occasions throughout the year.

And because there can be tax problems, tax controversies, tax disputes with the IRS that come up at any time, attorney Jack Tuckner, the host of a politics and current events oriented radio talk show, invited me in to talk about tax controversies — collection issues, audits, offshore tax issues, voluntary disclosures, offers in compromise, and similar issues.

So, on Tuesday afternoon, October 20th, 2015, far, far away from April 15th, and after the October 15th deadline has passed, I met with Jack Tuckner and his partner in radio, Deborah O’Rell, to talk about the IRS and New York State’s Department of Taxation and Finance on there weekly show, Women’s Rights in the Workplace on the Progressive Radio Network, PRN.fm.

The original plan was to discuss the inner workings of the IRS, and how tax payers might best protect themselves from the eager claws of the government for a half hour. But before we knew it a whole hour went by.

The Women’s Rights in the Workplace show describes our conversation like this:

“Did you know that your wages can be garnished, your bank accounts and home can be seized, and even your driver’s license can be revoked due to back taxes? Join Jack & Deborah as they welcome to the show good guy tax attorney Allan R. Pearlman, who’ll provide insight, tips and “secrets” to avoid getting into boiling hot water with the taxman.”

The whole discussion, warts and all, is here:

24 12, 2014

The Sin of Snipes, Replayed: Mayor Pleads Guilty to Failing to File Tax Return

By Allan|2020-02-12T14:20:17-05:00December 24th, 2014|failure to file tax return, Tax, Tax Crimes, Tax fraud|0 Comments

The mayor of Mount Vernon, N.Y., just north of Manhattan, has pleaded guilty to failing to file corporate and personal income tax returns. Failing to file tax returns is the same crime for which Hollywood film star Wesley Snipes famously was convicted and for which he spent nearly three years in federal prison.

Mayor Ernest D. Davis, 76, faces up to two years in prison as a result of his plea agreement.

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23 08, 2014

Taxes v. Instincts: The Difference Between Humans and Other Animals

By Allan|2020-02-12T14:20:17-05:00August 23rd, 2014|Humor, Tax, Tax Theory|0 Comments

Quotable:

“Man is not like other animals in the ways that are really significant: animals have instincts, we have taxes.”

— Erving Goffman

6 04, 2013

Letter from the Editor (Post-Mayan Apocalypse Fizzle): A New Life for the Newsletter, Life, Law & Taxes

By Allan|2020-02-12T14:20:17-05:00April 6th, 2013|IRS News, Tax, Tax Crimes, Tax Penalties, Tax Policy, Tax Problem Solving|0 Comments

(From the vault: A slightly different version of this post was published in the paper newsletter, sent to subscribers through the regular U.S. mail, in January 2013, on the occasion of the paper newsletter being revived to monthly publication, after a hiatus.)

It has been a while since the last edition of the through-the-regular-snail-mail Life, Law and Taxes, was completed and mailed out to you.

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19 05, 2009

One reason to want to be paying taxes

By Allan|2020-02-12T14:20:20-05:00May 19th, 2009|Income, Making Money, Profit, Tax, Tax Policy, Tax Problem Solving|0 Comments

This is obvious but, with all the dread, resentment, and busywork that frequently comes along with the chore and expense of preparing tax returns and paying taxes, it is all too often overlooked:

if you’re paying taxes it means you made money.

Not owing (and so, paying) taxes generally means you aren’t making money. And that’s worse. (Let’s leave aside, for the moment, the issues surrounding “tax haven” countries like Leichtenstein, the Caymen Islands, Andorra, Monaco, etc., where we’ve been reading in the news recently that profitable companies avoid taxes through foreign subsidiaries incorporated in one of these offshore places).

It is a where-there’s-smoke-there’s-fire causal connection (or putting it into achievement test comparison: Income taxes are to making money as smoke is to fire (and again, following the metaphor, we leave aside the smokeless fires of off-shore tax havens for the moment).

The basic reality is, again, if your paying taxes, you’re making money, and that’s a good thing. (Thank you, Martha Stewart.)

~~~~~

Post Script: At risk of blowing a punch line (not that this is funny), this paying-taxes-because-you’re-making-money-and-that’s-a-good-thing message makes me think to mention that I recently started a second blog, on a completely different topic, which is relevant here: the other blog is called “Marketing and PR Lab” and, instead of discussing law or the government or taxes, it instead focuses on ways of improving one’s business and so, income, by improving your marketing methods and getting known.

So as you think of ways to have the “smoke and fire” problem described above, that is: “I have to pay taxes, Dang! But that means I made money — Great!” you might want to go to http://marketingandprlab.com to see if there are things there that can push your business and income-earning forward, or leave a comment to share your experiences, or both.

11 05, 2009

Something to think about when you’re not thinking about taxes – Miles Davis

By Allan|2020-02-12T14:20:20-05:00May 11th, 2009|100% Penalty, Tax, Trust Fund Recovery Penalty, Withholding Tax|0 Comments

We can’t be fretting over Internal Revenue Code 6662 (the accuracy-related penalties, 20%, 40% depending on how inaccurate your tax return might be found to be) all the time.

There are alternatives. To be especially self-punishing, one look at § 6672 (the “Trust Fund Recovery Penalty,” formerly known as the “100% penalty” and think “oh how lucky I am to be only exposed to liability under § 6662 and not § 6672).

Better yet, and less punishing, just think about something else entirely.

For example, one timeless, but all to often overlooked alternative, there’s Miles Davis.

Below is video of a part of a concert at Montreaux, in 1973.

In this clip, Miles is in his late 60’s/early 70’s period which critics and some fans seemed to love (or loved) to hate. One theory: they are (or were) apparently stuck in the 50’s when he did those great recordings with the quintet, Kind of Blue and Round About Midnight, etc. (not a bad place to get stuck, but now 40 years later some might argue that the late 60’s/early 70’s electric Miles is still ahead of his time).

So, below is the clip….

21 02, 2009

When Does the Statute of Limitations Run Out for IRS Tax Audits?

By Allan|2020-02-12T14:20:21-05:00February 21st, 2009|Audits, Bankruptcy, Statute of Limitations, Tax, Tax Crimes, Tax Policy|0 Comments

A visitor to my website found it by asking this question in a search on Yahoo: “When does the statute of limitations run out for audits?”

The shortest answer is three years.

So the IRS Has Three Years – Three Years Starting When?

But that’s not quite enough information all by itself. The first, next question is: three years from what? What event makes the clock start ticking and counting down?

The shortest answer is that the clock starts counting down, when you, the taxpayer, file your tax return. But that’s not quite the whole story either:

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9 02, 2009

Church Sound Man To Face Taxman’s Music

By Allan|2020-02-12T14:20:22-05:00February 9th, 2009|Estimated Tax, IRS Collection, IRS Enforcement, IRS News, Tax, Tax Crimes|0 Comments

Nashville, TN — A Tennessee man who operates a business installing complex sound systems in church auditoriums nationwide, pled guilty to two counts of failure to pay federal income tax. As part of his plea, he admitted that he owes the federal government more than $300,000.

After admitting guilt in August, 2008, the sentencing hearing took place in January 2009. The court sentenced Charles Grecco, 44, of Franklin, Tenn, to serve 6 months in prison, followed by one year of supervised release, and to pay restitution of $300,141.82 to the Internal Revenue Service.

According to the government, Grecco failed to pay more than $67,000 in federal income taxes for years 2001 and 2002 which was only two of the six tax years involved.

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