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July, 2008

Message from Nelson & Company, P.S., CPAs

No Capital Gains Tax?---Say what?!?

Yes, it's true. As of today, in 2010 there will be no capital gains tax for folks in the 15% and under bracket; this means if you're single with a total income of under $30,000. Now is the time to plan to start gifting assets, i.e, mutual funds, common stock, etc., to family members such as grandchildren who will be over age 17 and are able to avoid kiddie tax.

This will be a once in a lifetime planning opportunity if the next Congress doesn't change the law.

Certified Public Accountants

IRS Times & Inquirer

Inside This Issue...

Ohio Bookie Faces Federal Tax Charges
Tax Shelter Promoters Charged in Oregon
Washington State Restaurateur Guilty of Tax Evasion
IRS Question Corner

Ohio Bookie Faces Federal Tax Charges

An Ohio man faces federal charges after not reporting as income proceeds from his illegally gambling and bookmaking business.

Prosecutors filed an indictment against Anthony Leoni Jr. of Auburn Township, Ohio, charging him with four counts of income tax evasion.

The indictment alleges that, during the years 2002 through 2005, Leoni conducted a sports-bookmaking operation and wagered on sporting events, and he failed to report all his income from this activity. Specifically, the indictment alleges that, during those years, Leoni reported taxable income of about $201,000 on which there were taxes due and owing of approximately $50,000. The information further alleges that Leoni failed to report additional taxable income of $528,758 and taxes due and owing of $135,661 for those years.

If convicted, Leoni’s sentence will be determined by the court after review of factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the characteristics of the violation. In all cases the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.

Tax Shelter Promoters Charged in Oregon

Micaela Renee Dutson and her husband, Tony Dutson, were arraigned in federal court in Portland on charges that they conspired to defraud the United States of more than $8 million and failed to file income taxes. Both pleaded not guilty to all charges. Trial is set for August 5.

The indictment alleges that the conspiracy, which began in 1997 and continued through at least October 2005, was intended to impede and obstruct the lawful functions of the IRS through deceit and dishonest means. At the heart of the conspiracy was the marketing of abusive tax-avoidance programs which were designed solely to assist people in evading assessment and collection of federal income taxes.

The Dutsons allegedly collected hundreds of thousands of dollars in fees from clients who paid them to help hide assets and avoid payment of federal income taxes. These tax avoidance programs were sold using various business entities. According to the indictment, the Dutsons typically charged between $1,500 and $2,500 to establish each “trust” in a package, and encouraged the purchase of multiple trusts for added security. The Dutsons also charged an annual maintenance fee of around $250 for each “trust.” The Dutsons used the money they received to pay for personal expenses, and then failed to disclose the money received to the IRS by failing to file tax returns.

During the life of the alleged conspiracy, the Dutsons helped clients hide millions of dollars in income from the IRS. These clients have since been assessed over $8 million in taxes, interest and penalties.

Washington State Restaurateur Guilty of Tax Evasion

A Washington restaurateur pleaded guilty to tax evasion. William Robertson, 68, formerly of Everett, WA, owned various restaurants operating under the Hot Rod Café name. According to the indictment, in 2004 and 2005, Robertson withheld about $36,503, from employees’ pay for Social Security, Medicare and income taxes.

Robertson failed to pay this money to the government for his employees’ taxes. In addition, Robertson withheld approximately $2,951 from employee checks from another restaurant, but also failed to make the payment for the Social Security, Medicare and income taxes.

IRS Question Corner

Question: I suppose it doesn’t really matter about the details of how I got into this mess, but I owe the IRS big time. When my company was taking off, I took some bad tax advice, which in turn resulted in a big tax debt. Trouble is, my company is now out of business, and I don’t know where I can get the money to pay off the personal tax debt. Do I have any options?

Answer:  Yes, you have options. The best one is what’s known as the Offer in Compromise. This is a program designed for taxpayers in situations similar to yours. The IRS came up with it after years and years of beating on doors and chasing deadbeat taxpayers. The tax-collecting agency realized a kinder, gentler approach can be more effective.

Here’s how it works: You and a qualified tax professional will approach the IRS regarding your current tax debt. Together, you will make an offer to settle that debt ---once and for all, in exchange for an agreement that the IRS reduces that debt. In fact, Offers in Compromise can result in a debt reduction amounting to pennies on the dollar.

Of course, only certainly taxpayers qualify for this program, and based on the description of your financial predicament, it sounds like you may be one of those who qualify. However, the first thing you should do is consult with a qualified tax professional who will analyze your previous returns and come up with the exact amount you owe the IRS. With those numbers, the two of you will then begin the negotiating process to finalize an Offer in Compromise. It’s really that easy.

In addition, if you do not qualify for the Offer in Compromise program, other programs are available as well, including the Installment Agreement. For a free, no-risk consultation, please call my office at 253-752-9522 or send me an E-mail at Do it today!


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Nelson & Company, P.S., CPAs Since 1979