| Q: | Why are so many of my 1099s from brokerage houses and mutual funds late this year? Why were several of them corrected after the due date? | |
| A: | The 2003 Job and Growth Tax
Relief Act lowered the tax rate on long-term capital gains and qualified
dividends to 15 percent. The new capital gains rate was effective
for sales after May 5, 2003. Dividends had to be from stock that had
been held 60 days during the 120-day ex-dividend date. This means
that the securities industry is having difficulty determining qualified
dividends and capital gains. The 15 percent rate has created a tremendous
tax savings for many taxpayers. We recommend you be patient and wait
until late March before finalizing your tax return, especially if
you had a number of stock transactions or own several mutual funds.
As of March 28, 2004, we are still receiving amended 1099's from various brokerage houses. REMEMBER : Extensions only extend the time to file - not the time to pay . 90% of tax for 2003 must be paid by April 15th, 2004. |
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| Sincerely, NELSON & COMPANY, P.S. Certified Public Accountants |
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Inside This Issue....
 A Missouri woman was sentenced to 14
months in prison without the possibility of parole after she evaded
taxes on nearly $1 million earned from her role in the "Miracle
Cars" scam.
Corinne M. Conway, 63, of Higginsville, Mo., was also ordered to pay $4.9 million in restitution. Additionally, she was forced to relinquish any interest she or The Virtuous Women International Ministry has in real estate assets. Conway and a handful of others orchestrated a nationwide scam that defrauded hundreds of victims of millions of dollars. As part the scheme, which targeted churches and religious groups, Conway told people that a man named John Bowers had left a multimillion-dollar estate with a significant number of vehicles to be sold at bargain prices as a reward for religious faith. However, no such estate existed. Conway and others raised more than $20 million from individuals throughout the United States for the supposed purchase of 700 vehicles. Copies of this and previous versions
of the Tax Bulletin are available on our web site:
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IRS Times
& Inquirer
NELSON & COMPANY, P.S. CERTIFIED PUBLIC ACCOUNTANTS 253-752-9522 | 1-800-669-0137 INS
Official, Wife Plead Guilty to Tax Charges
An Arizona immigration inspector and his wife have pleaded guilty to an indictment that alleged they filed false income tax returns that attempted to conceal their true income for the years 1996 to 1998. Jose K. Livanios, of Nogales, Ariz., pleaded guilty to a felony charge of filing a false return for the year 1998. His wife, Leticia, pleaded guilty to a misdemeanor charge of failing to provide information for her 1998 return. According to the plea, Jose Livanios knew when he claimed $25,000 as farm income on his return that he had substantially more income from his cattle business. In fact, he underreported his income by about $45,066. Additionally, Livanios admitted that the total underreported income from 1996 to 1998 was about $94,760. Livanios faces up to three years in prison and a $250,000 fine. His wife faces up to one year in prison. Ohio
Man Receives Six Years for Tax Crimes
Mark W. May, a 43-year-old from Xenia, Ohio, has been sentenced to six years in prison and ordered to pay $728,090 in restitution after being convicted of tax crimes. May was the founder, president and owner of Maranatha Financial Group Inc., a now-defunct financial planning service. From 1990 to 1996, May failed to file the company's payroll tax returns and remit payroll taxes. In September, he was charged with four counts of willfully failing to pay the IRS more than $500,000 in payroll taxes, as well as tax evasion for the years 1995 and 1996. Trial evidence showed that May earned a $250,000 salary while failing to pay taxes. IRS QUESTION CORNER... Question: My tax debt has become so considerable that I know I need to do something about it quickly. Thanks to a mixture of unexpected high earnings in the late '90s and cashing out stocks before the market finally dipped, I've amassed a tax debt of about $90,000. Despite having earned a lot of money, I don't have much to show for it. And I certainly don't have $90,000 in cash! Will I lose my home? Answer: No, the chances are slim that you will lose your home as a result of this tax debt. But you are right: $90,000 is a considerable debt and it is something you should take care of quickly. Although I don't fully know your current financial and employment situation, I would guess that your best bet is to file an Offer in Compromise. Because the IRS has learned from years of experience that chasing down taxpayers like you won't result in paid debts, the tax-collecting agency allows you to make an offer. Essentially, if you owe $90,000, the IRS may be willing to accept a figure much lower than that in order to settle your debt. For many clients, an Offer in Compromise results in having to pay only pennies on the dollar. The first step you should make is to consult with a qualified tax professional. Provide him or her with your previous tax returns and financial information. The tax professional will then analyze your previous filings to come to the exact amount you owe the IRS. If you still owe a substantial amount, you and your tax professional can then make an offer to the IRS agent. If approved, the Offer in Compromise allows you to satisfy your outstanding tax debt without having to give up your home and your life. Despite what you may have heard, the IRS isn't out to ruin you. With the help of a qualified tax professional, you can take care of your debt without having to move into the poorhouse. I solve problems such as yours every day. That's what I do: I'm an IRS Problem Solver. I encourage you to call our office at 253-752-9522 or send me an E-mail at Firm@DNelsonCPAs.com for a free, no-risk consultation. There IS a solution for your IRS problem. Call us today!
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