Trenton Mayor Tony Mack Gets Knee Deep with the IRS

Elected officials can’t get away from tax issues better than anyone else these days. In New Jersey, Mayor Mack of Trenton is amidst a huge battle with the IRS, involving foreclosures, back taxes, and more.

Public records have revealed that Mayor Tony Mack currently owes over $50,000 to the IRS and has two properties currently in foreclosure. Lenders first filed a foreclosure notice on one property, a West State Street building, owned by Mack’s company on July 16th. Two days later FBI agents began to search Mack’s home in search of evidence for bribery, extortion, fraud, money laundering and even drug dealing linked to campaign contributor, Joseph Giorgianni.

The mayor, in his first term, has struggled for a long period of time with heavy debt. He owes hundreds of thousands of dollars on mortgages and has been overdue on both tax and sewer payments. He has also defaulted on mortgages many times.

Although Mack claims that he has not violated the public trust, he has admitted to struggling with finances, citing late taxes from past irregular employment as well as the general cycle of foreclosure. He had received numerous foreclosures since his loss of employment in 2004 and has been struggling to maintain his own property and belongings.

Mack owes $34,800 in back taxes in addition to fees for a fire damaged property at 29 Hampton Ave. He lost an $80,000 salary job in 2004 and another in 2008. Although he currently makes $126,400 annually as Mayor now, he still has been facing serious financial trouble for the past several months

Mack, however, has not been the only elected official to face troubles with the IRS. Hamilton Mayor John Bencivengo is currently awaiting trial on charges of extortion and money laundering relating to a $12,000 bribe he is accused to have taken from an insurance broker. Although, county records show no evidence of any tax liens filed against him.

The notices that Mack has received are bountiful. On March 6, Mack received a Wells Fargo foreclosure notice for the 245 Tioga Street owned by him and his wife. The property is assessed at $40,200, however, records show that Mack has taken out several mortgages on the property totaling $181,500. In April 2010, Mack entered into another mortgage with Burlington County Woman , Lena Brolo, at $20,600. The list continues with a shocking $20,000 mortgage agreement for Mack’s own mayoral campaign. Yet, state campaign rules require that individuals’ contributions do not surpass $2,600 and that all outside party loans be reported.

Two weeks ago, Mack received another foreclosure notice from TD Bank. This one was for the West State Street property. City taxes on all three of the properties will exceed $12,500 and tax records demonstrate that many prior payments have been late.

We can only hope that Mayor Mack and his family make it out of this situation with their dignity intact. Contact a knowledgeable IRS tax attorney to assist you in taking the necessary precautions to avoid situations with dire consequences such as these.

 

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

IRS Bills Bringing Olympians Down

Medal winning Olympians are going to be swarmed upon their return to the states with celebrations, praise, media following, and…taxes?

That’s right. Athletes are liable to pay income tax on medals earned at the Olympic Games. This means that if you win a gold medal, you would be paying its weight in gold. Medal winners are subject to a maximum 35 percent tax rate, and, under U.S. law, they are required to add the value of their metals to their taxable income.

It’s not just the medals that these Olympians must add to their taxable income but their winnings as well. A gold medal is a $25,000 prize, silver is $15,000, and bronze is $10,000. Therefore, to our dismay, champions don’t necessarily come back with the pouring cash flow that we imagine.

Now, the saddest part is that the competitors of our U.S. athletes most likely pay no such taxation on their medals when they return home, as the U.S. is the only developed nation that taxes “worldwide” income gained overseas, one of the most difficult aspects for taxpayers to follow.

Florida Senator, Marco Rubio, thinks this is a disadvantage for our Olympians, which really has nothing to do with sports. He proposed a bill that would dispense with the tax that American athletes would have to pay for their winnings in London.

We still don’t know where the bill will be before the Closing Ceremonies but are hoping for the best, as winners would owe the IRS $8,986 for winning gold, $5,835 for winning silver, and $3.502 for winning bronze. Olympic legend, Michael Phelps already received 14 gold and 2 bronze medals before this year’s ceremonies, an amount that would cost him approximately $132,808 in income taxes upon his return to the states. With two more medals this year (and perhaps more to come) the total amount he owes to the IRS could add up to well over $150,000.

Perhaps Phelps will return back to Florida rather than his home state Maryland just to support the Senator who saved him from thousands of dollars owed back to Uncle Sam after his performance overseas. Like Senator Rubio, IRS tax lawyers are on your side. You may not be a medal winning Olympian, but a trustworthy tax attorney can provide you with your own fair treatment from the IRS.

 

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

Ministry’s Payroll Tax Battle is Nothing New for Bankruptcy Court

Last October, Chief Apostle Bishop Corletta Vaughn of Go Tell It Ministry went to bankruptcy court trying to avoid responsibility for some of the organization’s unpaid payroll taxes. Her case, however, did not go over so well for her.

Ms. Vaughn defended her innocence by claiming that her responsibilities for the church rested only on the spiritual matters, not the business end. Ms. Vaughn should have been aware that documentary evidence is far more substantial than her word. Perhaps the “spiritual” aspect of things just doesn’t stand up in court. The evidence shows that Ms. Vaughn had control over the business matters of the church, from check signing to hiring and firing of employees.

Ms. Vaughn and her lawyers have recently reappeared in court to appeal the bankruptcy court’s decision on the payroll taxes. They appeared in the United States District Court for the Eastern District of North Carolina. The appeal is based on the First Amendment establishment clause, which has become a popular claim from religious institutions in various cases.

The appeal relies on whether the court violated Ms. Vaughn’s and Go Tell It Ministry’s rights under the free exercise clause and the establishment cause of the First Amendment, based on whether or not Ms. Vaughn was a responsible person for the business, based on US Code: Section 6672, which specifies the failure to collect and pay over tax, or an attempt to evade or defeat tax. Those appealing the case argued that the bankruptcy court’s decision expected the religious organization to act in a specific way. Particularly, the appellants believed that the court’s decision established a state regulated religion through judicial fiat.

Their argument is that because the court cited Go Tell it Ministry’s bylaws, it was ordering what the President, CEO, and Chief apostle of the religious organization must do. However, just because the court was applying roles to the organization in order for the company to correctly adhere to tax matters, this does not mean that the court was challenging any of the organization’s ecclesiastical decisions or religious customs, grounds to religious regulation. The appellants are asking the court to take a far jump and assume that the citation of the bylaws as part of the responsible person analysis of the US Code: Section 6672, violates the First Amendment, a particularly far stretch.

What the bankruptcy court did exactly was to authorize the Chief Apostle, Ms. Vaughn, to have supervision over business matters. This decision was not based on what the court believe Ms. Vaughn should be doing, but rather what she had been doing previously within the organization, such as signing a $178,000 construction loan, signing a corporate resolution authorizing a bank account with First Federal Bank, etc., which are particularly business matters normally conducted by an individual with financial power within an organization. Thus, the decision is not necessarily forcing Ms. Vaughn to now be invested in secular affairs since she was prior to the case.

The final word: Ms. Vaughn is still personally liable for payroll taxes, not because the court ordered her too, but because the court was aligning what she had been doing in the past with her position within the organization. Many religious organizations with pastors of such significance face similar problems in disagreements with the IRS. For more information and/or assistance with payroll tax procedures, contact a trustworthy tax attorney today.

 

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

Proposed Bill Attacks Government Employees for Tax Problems

Even those working directly for the government may need assistance from an IRS tax attorney.

The House of Representatives faced a harsh bill this past Tuesday – its purpose: to fire government employees who are behind on their taxes. In an attempt to solve a problem that has not faced much improvement over the past ten years, the bill aims at U.S. government workers who are seriously delinquent in their federal taxes; however, it would not affect those who are trying to work out their problems with the IRS, through the assistance of tax lawyers or by other means.

The necessity for the bill stems from the fact that the cost to taxpayers rose from near $600 million in 2004 to over $1 billion in 2010. There were 102,794 federal employees who were delinquent in 2004 and 98,921 in 2010. This includes around 700 congressional employees. Another IRS report included employees from the Treasury Department, Federal Reserve, and the U.S. Office of Government Ethics.

The bill would make those who are seriously delinquent ineligible for federal employment whether they are already working for the government or are applying for a job. Agencies would conduct periodic reviews on each individual to review public records for tax liens. It would make government employment for those who have put their taxes on the backburner basically impossible.

The vote was 236-116, sending the bill to the Senate. The fate is still speculative. Many representatives are still up in the air on their opinions toward the case.

Some representatives find the bill unnecessary as the IRS can levy penalties on individuals of up to 15% of wages until the tax debt is satisfied. While others believe that the bill is mandatory as it involves $1 billion in uncollected taxes that needs to be resolved as soon as possible.

Regardless of where the bill goes, it is evident that even those who work for the government have a difficult time paying their taxes. Although they may be tarnishing the reputation of the federal workforce, it is not just federal taxpayers who suffer from tax problems. As career positions everywhere may be subject to future scrutiny, it is important that all taxpayers make attempts to solve their problems with the IRS. For assistance, call a knowledgeable tax lawyer for assistance today.

 

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