Guilty Plea for Ex-IRS Agent for Hiring Hit Man

An  Ex-IRS Agent has entered a guilty plea to a long list of criminal charges that no government agent should ever have on his record—including murder-for-hire, witness tampering involved attempted murder, solicitation of a crime of violence, mail fraud, filing false tax return, Social Security fraud, aggravated identity theft, and money laundering—in a San Diego federal courthouse. The total amount of counts against him was twelve.

While entering his plea, Mr. Martinez admitted to soliciting a third party to murder four of his former clients, individuals who had been victims of his tax fraud scheme. The four individuals on whom he placed a hit were scheduled to testify against him in his pending criminal case. He instructed Norman Thellman, his limo driver, to deliver $100,000 in cash to a man he has hired as a hit man. He even specified as to the number of guns and for whom to use them.

The hit man that he hired, though, contacted the FBI instead of following through with hit. A complaint states that a meeting between the hit man and Mr. Martinez was then subsequently recorded.

Martinez admitted in court to having attempted to prevent the former client’s testimony by offering the hit man to kill them for the specified amount of money. He also admitted to having committed tax fraud, defrauding his clients through falsified tax returns. Mr. Martinez would present these tax returns to the individuals with falsified amounts due, and ask that they make their payments to an alleged client trust account, not the IRS or the Franchise Tax Board. Instead of depositing the amounts from the taxes into a trust account as promised, as well as estimated payments he received throughout the year, Mr. Martinez would deposit the money in several different accounts of his own.

To cover his deceit, Mr. Martinez went so far as to file a false return that indicated his clients owed little or no money to the IRS. Mr. Martinez collected an estimated $11 million and used the money for his own personal benefit, making home improvements and buying property.

Unfortunately, the long list continues of crimes Mr. Martinez committed, including using his client’s Social Security numbers and falsifying his own tax returns.

If you have a feeling that your tax preparer is committing a crime, please contact the appropriate authorities. When looking for a tax preparer, be sure to research his reputations. Contacting a known law firm, such as Segal, Cohen & Landis, to handle your tax issues would be to your benefit.

 

Segal, Cohen & Landis
9100 Wilshire Blvd. Ste. 601E
Beverly Hills, CA 90212
(310) 285-3999

When a Taxpayer Wins the Jackpot, So Does the IRS

Jackpot
Jackpot

When it comes to Powerball jackpots and the IRS, like the one that is currently topping $320 million, the first thing that a tax attorney thinks about, if he isn’t the lucky winner, is how much the IRS and state tax boards will receive once winners come forward to claim their reward. There are several parts to that answer.

IRS shares in Jackpot

The first is where you purchased your ticket, as the 44 jurisdictions who participate have differing criteria. Some of the 44 jurisdictions, which include a total of 42 states, do not have a state income tax, and in at least one, lottery winnings are an exemption from the tax. A resident of the state would only owe the IRS 35% if he or she were the sole recipient of the jackpot.

 

Segal, Cohen & Landis
9100 Wilshire Blvd. Ste. 601E
Beverly Hills, CA 90212
(310) 285-3999

What a Tragedy Says About IRS Complaints in the United States

The tax collector has never been a beloved governmental employee, whether he was a part of the current civilization or past civilizations. An ancient Sumerian proverb, spoken over 4,000 years ago, expresses a sentiment with undertones that many even today would agree with: “You can have a lord, you can have a king, but the man to fear is the tax collector.”

While the history of the Internal Revenue Service in its several iterations throughout the nation’s history has been riddled with corruption scandals, it is important nonetheless to learn how to turn fear of the government entity into an understanding of the purpose of the Internal Revenue Service. This understanding could lead a citizen to file an IRS complaint that could profit many, instead of the senseless threats and acts of violence some choose as a way in which to express their frustration and outrage.

In his article written in 2010, “The Austin Tragedy and the Dangerous Myth of the IRS Out of Control” Neil H. Buchanan of George Washington University Law School explores how a tragedy that occurred two years ago at the IRS office building in Austin, Texas underscores the nation’s view of the IRS. In February 2010, a man flew his plane into the IRS building after having lit his home on fire. Both he and one IRS employee were killed, while 13 others were injured. After his suicide terrorist attack, a long message he had left was discovered. His incoherent ramblings ranged from IRS complaints to anti-capitalist commentary. Buchanan remarks that because of the location of the attack, the media at the time focused on the IRS complaints, and, unfortunately, some decided to use the media as a way in which to attack the IRS, rather than mourning the tragedy that occurred. The “safe language of disapproval” he says they used ended in this thematic message: “’No one should condone these crimes, but the IRS really is out of control.’”

Buchanan finds it appalling that this would be the message of the mainstream media in the face of this terrorist attack, leading him to the conclusion that the reaction to this most tragic and violent IRS complaint said much more about the common citizen’s perception of the IRS. He notes that while extreme, this was not an isolated threat. The statistics he quotes are frightening: over 1000 threats had been lodged against the IRS in 2009 alone. As a result of such a hostile culture when it comes to IRS threats, armed security is sometimes even provided for IRS agents and other IRS personnel.

This statistics and actions are “especially poignant and inexplicable” to Buchanan, as he argues that the IRS is a model in its duties as a government agency. It is an agency “with a record of commendable behavior” with most of its agents who are hard-working and honest, not unscrupulous or unfeeling as often portrayed in popular culture. While taxpayers have the right to express their unhappiness at unfair treatment, and certainly deserve to report abuse when an IRS complaint is justified, it is essential to understand the IRS in its role as a tax collecting entity.

The man in Austin chose to protest the IRS in a violent way, a way that is not condonable. The IRS is not infallible, though, and as noted earlier, the appropriate way to manifest a grievance is to do it within the proper channels. To learn how to lodge an IRS complaint that will be read and noted, please visit either visit the Taxpayer Advocate Service website (the TAS is the watchdog service within the IRS who ensures that all complaints are taken and investigated) or speak to a tax attorney.

 

Segal, Cohen & Landis
9100 Wilshire Blvd. Ste. 601E
Beverly Hills, CA 90212
(310) 285-3999

$21 Billion Predicted in Tax Fraud in the Next 5 Years

We’ve recently written about the devastating consequences taxpayers can face after making simple errors on their taxes. For those who purposely scheme to avoid their taxes or receive more back than they deserve, the court is simply not willing to let you get away with it.

Richard Kellog Armstrong, age 77, had received over $1.6 million in tax fraud and then proceeded to hide the proceeds in offshore bank accounts. Meanwhile, he recruited assistance and promoted the scheme.

District Court Judge Robert E. Blackburn took no mercy when sentencing Richard Kellogg Armstrong, age 77, to a full 108 months in federal prison and three years of supervised release following. The sentence was ordered to follow a 660 day prison term. In addition to Armstrong’s $1,021,500 in fines as punitive sanctions for 10 acts of contempt in court, Judge Blackburn also ordered Armstrong to pay $1,678,834 in restitution to the IRS as well as forfeit two residences and a personal airplane.

The Justice Department believes this case is perfect evidence that those who defy lax laws by preparing ludicrous or frivolous tax returns will be prosecuted and, without a doubt, punished for their tactics. IRS Criminal Investigations Chief, Richard Weber, also believes that this case highlights that the IRS will not give up on their hunt for individuals who attempt to cheat America’s tax system.

Tax professionals believe that over $5.2 billion of U.S. taxpayer money may have been paid out this past year in fraudulent tax refunds to individuals who filed about 1.5 million fake returns. It is likely that scammers like these will be able to rip off another $21 billion in the next five years.

These scammers steal taxpayer information from sources like lost or stolen wallets, data on computers, or in workplace files.

The IRS is, however, catching some of the fraud. They spotted about 940,000 false returns from 2011 and, therefore, did not pay back $6.5 billion in fraudulent returns. The IRS is also using red-flag filters to help them spot likely tax-return fraud as well as pin numbers applied to theft victims to help prevent future tax return fraud.

The Treasury Inspector General for Tax Administration claims that despite the preventive actions of the IRS, they cannot prevent billions more from being wiped out in fraudulent refunds in upcoming years. Therefore, although there is no way to prevent yourself from tax-related theft, there are steps you can take to make your data safer. This problem clearly isn’t going right away so the sooner you can take action, the better.

Listed below are various ways to protect yourself:

File your tax return early: Since usually, fraudulent tax filers will file their returns early, in order to beat the legitimate filing, it’s best for you to beat the criminals at their own game. A tax lawyer can help you file your returns early and effectively.

Pay attention and respond to IRS notices: Often when your identity is stolen you may receive a few warning signs from the IRS. If you receive a notice that says you failed to report wages at a company where you never worked or that your return was rejected, contact a knowledgeable tax attorney or the IRS immediately.

Don’t ignore safety tips: You’ve probably heard them all before. Use strong, difficult passwords and change them often. Check your credit reports. Shred your financial documents. Use and update your anti-virus software. Have an IRS tax attorney on speed dial.

Encrypt sensitive financial documents: If you store documents on your computer, they should be encrypted. Also, a CD or external hard drive might be a better choice. Make sure to encrypt documents before they are emailed and that your wireless connection is encrypted as well.

Resist giving out SS#:Make sure you know when a social security number is legally required. Try and avoid giving it out unless completely necessary.

A knowledgeable tax attorney can assist you in avoiding identify theft and even from being accused of any fraudulent claims. The IRS is not giving up on their hunt for those attempting fraud in any way, nor will they overlook any irregular claim.

 

Segal, Cohen & Landis
9100 Wilshire Blvd. Ste. 601E
Beverly Hills, CA 90212
(310) 285-3999

When IRS Agents Harass: When To File A Complaint With The IRS

Most people do not know much about the IRS agents, until they come knocking on a taxpayer’s door. While most agents are professional, there are those who step beyond appropriate bounds and become abusive. It is then that a tax attorney should become involved to preserve and ensure your rights are being protected, but in order to identify the particular agents that are deserving of a complaint, it is important to know what a typical agent should be doing.

Revenue Agents, along with tax examiners and collectors, are employed to ensure that the tax money from businesses and citizens that is owed to the government is paid. The revenue agents, hired with a minimum educational requirement of bachelor’s degree, either spend their time in an office or out in the field visiting the homes and businesses of taxpayers. Their duties include: reviewing tax returns with complicated issues regarding businesses and large corporations, conducting field audits and investigations, and identifying taxes owed.

While most revenue agents conduct their jobs with professionalism, there are some agents who do not. There are a few key actions that the IRS considers harassment. First of all, if the revenue agent insists on being let into your home without an invitation, they are acting contrary to your rights. They also cannot attempt to collect from you at inconvenient times or locations. Late nights visits for intimidation purposes are not permitted. Threats of levies, levies or additional penalties not sanctioned by your particular case also cannot be made only to frighten you. An IRS agent must go through very specific channels to enact any such levy, lien, or further penalties. Finally, if an IRS agent promises to settle your debt immediately by taking a payment from you in person, they are not acting in accordance to their professional and governmental code. They cannot make a blanket decision without, once again, going through the proper channels.

If any of the above actions, or any other flagrant abuse of their position, is taken by an IRS agent, you have the right to contact an IRS tax attorney to assist you with your case and with lodging an IRS complaint.

 

Segal, Cohen & Landis
9100 Wilshire Blvd. Ste. 601E
Beverly Hills, CA 90212
(310) 285-3999

Compromise with the IRS Proves to be Much More Difficult than it Seems

The Fresh Start Initiative introduced by the Internal Revenue Service just weeks ago may have provided numerous taxpayers with false hope. Designed to assist individual and small business taxpayers with large tax liabilities, it includes changes in collection policy for lien filing threshold, lien withdrawal, installment agreements, and offers in compromise.

Although the IRS has attempted to lighten up its requirements for the initiative, the process isn’t as simple as most negotiations processes. Most people hope they can get away by paying less than half of what they owe back to the IRS and are willing to drop major dollars on any representative claiming to help them do this. However, only a knowledgeable tax attorney can promise you reasonable results by following specific IRS guidelines.

This is the formula used by the IRS to determine what you owe: the value of your assets plus your disposable income after allowable expenses multiplied by 12 or 24, if you need to make installment payments. In further detail: if you don’t own very much, maybe an older car with not much in your bank, your asset list will be very low. It will be higher of course for those who have much more in their property, which adds up quickly. Your disposable income is your monthly income minus necessary monthly expenses such as your house bill, food, utilities, medical bees, and other required fees for living. The remainder after this number is then what is multiplied by 12 or 24 to determine what you owe.

There are many guidelines that are often overlooked, often being the reason so many people believe they are entitled to more breaks than the IRS believes they deserve. Some are listed below:

– Savings for retirement. If you have any funds in a retirement plan, the IRS will expect you to be able to fork them over. Therefore, if you owe $30,000 and have $30,000 saved, the IRS will not settle for anything else than what you have.

– Although the IRS will not inventory inexpensive items in your household, such as clothing, they will take note of the much more valuable items. Collectibles, art, etc. will be included in your inventory and the IRS will expect you to sell these to cover your debts.

– The IRS wants you to keep your car! Of course, because they want you to be able to work to keep generating the revenues owed back to them. If you have a loan on your car, the value is relative to the loan balance, and, therefore, the IRS will acknowledge the lender’s position. If there is no lender, the price of the car will be greatly discounted when determining values for the final offer.

– The IRS is not willing to recognize and wait for you to pay off your credit card debt. If you owe amounts to credit card companies, this will not be recognized as part of your disposable income.

– The IRS website has a list of vehicle operating costs, housing and utilities, as well as household expenses. If the national standard for housing and utilities is less than what you actually pay, the IRS will expect you to move to a location that costs less. When calculating your offer, it will match the national standard, not yours.

– Other factors that the IRS will take into account are your age, marital status, health of dependents, and other factors that will affect your tax liability and ability to pay in the future.

For those who do not qualify for an offer, you may still have the chance to be considered uncollectible, which will give a year off to bring your finances to order. For the best advice and assistance on how to apply for the initiative or file your own offer in compromise following the listed guidelines, contact an experienced IRS tax attorney today.

 

Segal, Cohen & Landis
9100 Wilshire Blvd. Ste. 601E
Beverly Hills, CA 90212
(310) 285-3999

Former Olympians Can’t Escape Tax Trouble

Jackie Joyner-Kersee and Bobby Kersee are facing even more financial troubles in addition to their rollercoaster in the past. The Internal Revenue Service now claims they owe $386,000 in added taxes and penalties based on their $1.5 million in taxable income from years 2007 to 2010. However, the couple is already disputing the bill in a lawsuit filed in June with the U.S. Tax Court. They are claiming a total of only $703,000 in taxable income for those years.

Together, the couple has made substantial marks in the history of the Olympics. Joyner-Kersee, a former Olympian, has won six medals total, including three gold medals from 1982 through 1996. She holds a world record in the heptathlon and was named The Greatest Female Athlete of the 20th century by Sports Illustrated for Women. She is now a board member of USA Track & Field and is in London for the current Olympic games. Her husband, Bobby Kersee still coaches Olympic athletes, including Dawn Harper, who just won a silver medal yesterday in the 100 meter hurdles race, and Allyson Felix, who will competing in the finals of the 200-meter race.

In spite of their numerous Olympic successes and additional volunteer work, they have faced financial trouble for quite some time. A youth center in Kersee’s hometown of St. Louis, under the Jackie Joyner-Kersee foundation, has also faced financial drama as well. In 2009, the foundation had to decrease the size of their staff and cancel future events, after it was reported that the organization had paid $450,000 to another organization manage by Bobby Kersee. The center then had to close down in 2010 but an anonymous donor helped them to reopen last year.

Sadly, the Kersees’ tax issues became part of the public spotlight last year when the IRS filed two additional tax liens against them, one in Los Angeles and one in St. Louis, as they reside in both locations. They still have outstanding liens from 2006 and 2010. Therefore, they owe a combined total of approximately $1.3 million to the IRS.

The existing tax liens do not cover their tax bills from 2007 to 2010, so they face a number of dilemmas with the IRS. In U.S. Tax Court, the couple is arguing that the IRS denied them deductions for business expenses in the years 2007 to 2010. Bobby has travelled for his Olympic coaching to places like Beijing, Osaka, and Berlin, and Jackie had numerous travel fees as she had toured the nation as a motivational speaker.

Denials like the Kersees face normally apply to taxpayers if they do not present the proper documents to the IRS, meaning they are not sufficient enough to confirm their deductions or bias. The Kersees, in this case, claim that they supplied all the necessary documentation to their accountant and then further relied on him to report any and all of their income and expenses. Luckily, the Kersees have a tax lawyer to help them resolve their case. Harry Charles, who represents the couple, satisfied their earlier tax liens and is optimistic about their case. He believes that once the cases are sent to the IRS appeals for settlement and the Kersees provide additional required documentation, these too will be resolved. As the IRS has very specific documentation requirements for travel and entertainment expenses, it is very important that individuals and business owners hire a knowledgeable tax lawyer to assist them in presenting such requirements to the IRS.

To avoid the extensive time and expenses involved in tax court, contact an IRS attorney to solve your tax issues today.

 

Segal, Cohen & Landis
9100 Wilshire Blvd. Ste. 601E
Beverly Hills, CA 90212
(310) 285-3999

What Avoiding Your Taxes Can Do to You: Protestors Face IRS Bias

“Tax protestor” is a term we don’t hear too often these days. Nobody really wants to be labeled a tax protestor as it could damage an image and even put your strongest tax arguments to waste. As the Internal Revenue Service has been in a long war for decades with those who have simply denied its authority, the term “illegal tax protestor” has even been forcefully controlled in usage.

Back in 1998, Congress prohibited the IRS from labeling people as “illegal tax protestors” as well as ordering them to delete the “protestor” code from 57,000 of American’s files. Yet, the IRS continues to use this term and similar others, stigmatizing taxpayers and creating IRS employee bias against them. In an audit conducted on the 2011 fiscal year based on the usage of the term “illegal tax protestor” and “similar designations,” 38 cases were found in which 34 taxpayers were labeled “tax protestor.”

“Tax protestors” in history have been those individuals who refuse to pay taxes or file tax returns on based on their mistaken belief that the federal income tax is unconstitutional, invalid, voluntary, or just doesn’t apply to them under many different bizarre arguments. The term even holds the stigma of those small few who refuse to pay taxes or file returns simply because they disagree with the government policy. For example, they refuse to pay taxes that pay for wars, etc.

The reason this has so long been argued is because many who feel they are wrongly labeled “illegal tax protestors” are simply expressing a disagreement with the tax and not necessarily protesting or they believe that the certain tax doesn’t apply to their personal situation. In 2008, the Department of Justice even introduced the term “tax denier,” although this still applies a stigma to those who only believed they were wrongly taxed.

Despite what the IRS titles them, any individual who makes a frivolous tax argument may face a 20% accuracy-related penalty and even as high as 75% civil fraud penalty. If your return is filed late in addition to having frivolous claims, the penalties can be tripled another 75%. There is also a $5,000 penalty for frivolous tax returns and one can also be additionally penalized for sending any other impractical documents. Many of these claims could have been properly filed with the assistance of an IRS tax lawyer or knowledgeable tax professional.

You may be wondering how a taxpayer is supposed to know exactly what deems a frivolous position. The IRS has a published list of frivolous positions. Yet, this doesn’t seem to be readily available, or understandable, unless it is just entirely ignored. A shocking amount of people still make such erroneous claims.

Here are some cases that have recently transpired:

– Scott Grunsted claimed that his wages weren’t taxable because he believed the government could only tax federally connected income and not income from the private sector. He lost.

– In Worsham v. Commissioner, a tax return was filed from 1989 through 2004, then the taxpayer he no longer had to file returns or pay any taxes. The IRS labeled him a “protestor” making frivolous arguments. However, the court only warmed him.

Although one cannot be fully exempt from paying taxes or filing tax returns, they may not always be aware of what deems them responsible for fulfilling these duties. To avoid being subjected to bias from the IRS based on the commonality of such terms used against taxpayers with frivolous claims, an IRS tax attorney can help you correctly file taxes and avoid any uneasiness you have with your personal tax case.

 

Segal, Cohen & Landis
9100 Wilshire Blvd. Ste. 601E
Beverly Hills, CA 90212
(310) 285-3999

Taxing American Olympians, what’s next?

IRS tax attorneys report American Olympians winning at the London Olympic Games may not be so fortunate after all. That’s because current U.S. tax laws view winning at the Olympics as a taxable event. That is of course unless Republican Senator Marco Rubio gets his way.

According to several IRS tax lawyers, Senator Rubio has proposed legislation captioned “The Olympic Tax Elimination Act.” These same IRS tax attorneys report the bill would exempt U.S. Olympic medal winners from paying taxes on their hard-earned and well-deserved Olympic medals. Currently, American Olympians winning a medal at the games also receive an honorarium in the form of a cash payment ($25,000 for gold; $15,000 for silver; and $10,000 for bronze). IRS tax lawyers note the federal government collects taxes on these amounts.

Lobbying support for his proposed bill, Senator Rubio has argued “our tax code is a complicated and burdensome mess that too often punishes success, and the tax imposed on Olympic medal winners is a classic example of this madness”. Senator Rubio went on to say “athletes representing our nation overseas in the Olympics shouldn’t have to worry about an extra tax bill waiting for them back home.”

Senator Rubio has also said, and most IRS tax attorneys could not agree more, that “we need a fundamental overhaul of our tax code, but we shouldn’t wait any time we have a chance to aggressively fix ridiculous tax laws like this tax on Olympians’ medals and prize money”. Rubio also claimed “we can all agree that these Olympians who dedicate their lives to athletic excellence should not be punished when they achieve it.”

IRS tax lawyers reviewing Senator Rubio’s proposed legislation say the Act would amend the present Internal Revenue Code to eliminate the tax on Olympic medals and prize money won by United States athletes. If enacted, several IRS tax attorneys report an Olympic athlete’s gross income would “not include the value of any prize or award won by the taxpayer in athletic competition in the Olympic Games.” These same IRS tax lawyers advise the legislation, if passed, would apply to prizes and awards received after December 31, 2011.

 

Segal, Cohen & Landis
9100 Wilshire Blvd. Ste. 601E
Beverly Hills, CA 90212
(310) 285-3999

IRS Regulation may Weaken American Financial System

The Center for Freedom and Prosperity recently took lead on a strong coalition of groups in a letter to all U.S. Senators that would encourage them to veto an IRS Regulation that would ultimately weaken the American Financial System. The Sovereign Society, one of the nation’s largest offshore investment and asset protection publications officially joined the groups in signing the letter, as they believed the regulation would discourage foreign capital from investing in our nation’s economy and ultimately weaken the American financial system. Tax experts believe the U.S. could lose $88 billion in foreign investment.

The regulation would force United States banks to report all deposit interest paid to nonresident aliens. The letter in opposition to the rule encourages Senators to stand behind S.J Res. 46, which was introduced by Senator Marcus Rubio. It proclaims congressional disapproval of the regulation as well as a discharge petition to bring the resolution to a Senate floor vote.

Others involved in the signing of the letter include Andrew F. Quinlan, President, Center for Freedom and Prosperity, Grover Norquist, President, Americans for Tax Reform and Pete Sepp, Executive Vice President, National Taxpayers Union. Erika Nolan, publisher of the Sovereign Society signed on behalf of the organization.

If your own business may suffer from regulations such as these, contact a knowledgeable IRS tax attorney to address the issue in your favor.

 

Segal, Cohen & Landis
9100 Wilshire Blvd. Ste. 601E
Beverly Hills, CA 90212
(310) 285-3999