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September, 2008

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

The Bailout---Some provisions will benefit you.

Congress has finally passed, and the President has signed, the mortgage bailout bill. Contained in that bill are a number of tax provisions, including a continuation of the AMT credit. This is really good news because this should save a number of you money on your 2008 taxes. Also, a number of tax credits were extended for 2008, including the jobs credit, and research and development credits. The tax provisions are very lengthy and we'll have more information for you soon.

As to the crisis of the financial institutions, now is not the time to panic. Be very careful making any sudden moves. The financial markets are very volatile and it appears the Treasury has much additional work to do before anyone can say, with any certainty, where this crisis is headed. Again, just be very careful.

Certified Public Accountants

IRS Times & Inquirer

Inside This Issue...

IRS Official Charged in Tax-Refund Scheme
'Priest' Hid Assets Using Fake Church
IRS Question Corner

IRS Official Charged in Tax-Refund Scheme

The IRS busted one of its own.

Jesse Pedro Hernandez Jr., 30, of Fresno, Calif., is charged with an 11-count tax fraud indictment.

According to prosecutors, Hernandez was a Tax Examining Technician with the IRS in Fresno. Hernandez assisted other taxpayers to obtain refunds they were not entitled to receive by falsely claiming money had been withheld from rollover distributions on Individual Retirement Accounts. In some cases, the request for a refund was supported by a fraudulent Form 1099-R created by Hernandez. The total amount of refunds claimed by taxpayers that they were not entitled to receive was allegedly $28,010.

If convicted on all counts, Hernandez faces up to 44 years in prison.

'Priest' Hid Assets Using Fake Church

A Mesa, AZ man has been indicted for income tax evasion, corrupt interference with the due administration of the Internal Revenue Service and multiple counts of fraudulent use of a Social Security number.

According to the indictment, Stacey owned and operated a paving business under the names A to Z Paving, Triple A Paving, Texas Paving, Pave Your Way Construction, and A to Z Paving Engineering. Stacey did not file individual income tax returns as required by law for tax years 1995 to 2003. After being audited by the Internal Revenue Service, Stacey attempted to evade the payment of his 1995 to 1997 tax liabilities by, among other things, concealing assets using other peopleís names.

The indictment further alleges that Stacey tried to interfere with the IRSís assessment of his 1998 to 2003 income tax liabilities by making false statements to an IRS civil auditor and using false social security numbers to prevent the IRS from receiving accurate information about his income and assets.

Stacey faces up to five years in prison for tax evasion, up to three years for the corrupt endeavor charge and up to five years for fraudulent use of a Social Security number.

IRS Question Corner

Question: I’ve heard I should be skeptical of claims that I can reduce my tax debt by pennies on the dollar. What do you say?

Answer:  First of all, skepticism isn’t necessarily a bad thing. Whoever told you to be skeptical of claims that you can reduce your tax debt by pennies on the dollar is partly right. As you’ve no doubt read in the pages of IRS Times & Inquirer, there are a lot of scam artists out there who would like to take advantage of people with tax troubles. Many of these scam artists will make such claims.

That’s why it’s important to see a qualified tax professional. Under the right circumstances, he or she may be able to in fact reduce your tax debt by pennies on the dollar.

Really. Here’s what you should do: Go in for a consultation with a qualified tax professional. Once you and the tax professional decide to move forward, your tax professional will analyze your previous returns with a fine-tooth comb, making sure you are not volunteering to pay the IRS even a penny more than you owe.

Once you have the exact tax debt established, you and your qualified tax professional will meet with an IRS agent and discuss the terms of an Offer in Compromise — which will establish an amount, sometimes the equivalent of pennies on the dollar, that will allow you to pay off your tax debt once and for all.

If that sounds too good to be true, it isn’t. Trust me. Through decades of experience, the IRS has learned it’s sometimes easier and more effective to be flexible and negotiable.

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