AUGUST, 2004
Inside This Issue....
COMPUTECH PRESIDENT RECEIVES 15 MONTHS
The president of Rockville, Md.-based Computech Inc. has been sentenced to 15 months in prison for tax evasion.
Leon Chen, 42, had pleaded guilty to income tax evasion for the year 1997. According to the plea, Chen stated his 1997 income was $61,485 when, in fact, it was much higher. Indeed, from 1994 to 1997, according to the government, Chen’s underreporting resulted in a tax loss of $335,982.
Chen will make full restitution to the IRS, applying $694,712 in U.S. currency, gold ingots, and jewelry seized during a civil forfeiture in 1998.
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IRS Times & Inquirer
NELSON & COMPANY, P.S.
CERTIFIED PUBLIC ACCOUNTANTS
253-752-9522 | 1-800-669-0137
Scheme Netted $1.6 Million in False Returns
A Birmingham, Alabama man was sentenced to 27 months in prison after pleading guilty to running a scheme that netted $1.6 million in false income tax return refunds.
Marvin Davis, 63, who is presently incarcerated at a federal prison in North Carolina for his role in a separate crime, was also ordered to pay $280,363 in restitution to the IRS and was placed on three years of supervised release, which will begin after all of Davis’ prison terms have been served.
Davis was convicted of acting in concert with other individuals to devise a scheme to defraud the United States by advising members of a local investment club that they could file tax returns for estates and trusts and have refunded to them their lifetime contributions to Social Security. Davis secured the tax forms that were used in the scheme, assisted the individuals in filling them out, and charged the club members between $300 and $600 for his “services” — as well as a 10 percent fee upon receipt of the refund checks. The scheme resulted in $1,667,248.00 in fraudulent claims.
CA Man Pleads Guilty to Tax Evasion in Corruption Scheme
Darrick Jonathan Chavis, 34, of Antioch, CA. has pleaded guilty to two counts of mail fraud and filing a false tax return for his role in a scheme that bilked a public organization out of nearly $400,000 in taxpayer money.
According to the plea, Chavis admitted that, while working as an employee of the Redevelopment/Affordable Housing Program, he approved a number of $15,000 grants for low- and moderate-income families. Those families did not know of the grants, however. Chavis and another man then converted the money into cash and did not claim it on their tax returns.
He faces up to five years in prison and a $250,000 fine for a fraud charge and up to one year in prison for tax evasion
IRS QUESTION CORNER...
Question: My tax debt is extraordinarily high: $242,000. Don’t ask how it got that high. I’ll explain later. But my question is this: With the hot real estate market, I could probably sell my investment/rental house for about $130,000. That still leaves a little over $100,000. I don’t have that much cash, but I could probably pay it over time — say, in five to seven years. Is this an option for me?
Answer: Yes, it's absolutely an option open to you. While selling your investment property might be a good way to eliminate a large chunk of your tax debt, it might not be necessary. If keeping the property — and the rental income — is important, you should discuss options with a qualified tax professional.
Whether you decide to sell the house or not, an Installment Program could be an option for you. After years and years of chasing deadbeat taxpayers, the IRS has learned that the knock-on-the-door-enforcement approach doesn’t necessarily work better than flexibility.
If your current income potential would allow you to pay off the debt over time, IRS agents might be agreeable to letting you pay in installments. The program works very much like a mortgage or car payment: The IRS analyzes your assets and income and comes up with a figure that would allow you to satisfy the debt without forcing you to alter your lifestyle drastically. (Your $800-per-month BMW might have to go, but your house, your kids’ university tuition, etc. — are all fine.)
Having large tax debts over your head can be one of the most stressful situations in life. Believe me, I know. Every day clients come into my office feeling as if the world is about to close in on them. The stress becomes overwhelming.
It doesn’t have to be that way. Most tax problems can be settled with the help of a qualified tax professional. The trick is to start working on a solution as quickly as possible. That’s what I do. I’m an IRS Problem Solver. I’ll be happy to discuss your problems with you and help you find a solution. My number is 253-752-9522. Call or send me an E-mail at Firm@DNelsonCPAs.com for a free, no-risk consultation. Do it today!
David S. Nelson,
C.P.A.
NELSON & COMPANY, P.S.
Certified Public Accountants
Tacoma Mall Office Building
4301 South Pine Street, Suite #241
Tacoma, Washington 98409-7205
Phone: 253-752-9522
FAX: 253-276-0144
E-MAIL: Firm@DNelsonCPAs.com
WEB: www.NEVERPAYTAX.com
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