| FEBRUARY, 2005
Inside This Issue....
"Dr. Jekyll, just how well do you know this Mr. Hyde; the man who prepared your taxes?"
INSTITUTIONALIZED MAN MADE FALSE TAX
CLAIMS TO IRS
While committed at the Minnesota Sexual Psychopathic Personality Treatment Center, Arthur Dale Senty-Haugen submitted dozens of false federal income tax returns for himself and for fictitious companies he created in an attempt to collect more than $168,000 in tax refunds.
In January, Senty-Haugen, 37, pleaded guilty to five counts of false claims and one count of conspiracy to defraud the United States of more than $120,000.
From 1998 to 2002, Senty-Haugen created several fictitious businesses for which he filed false quarterly tax returns. In these returns, Senty-Haugen claimed that the fictitious businesses paid Advanced Earned Income Credit to numerous employees. The people Senty-Haugen claimed as “employees” on the returns were either deceased, inmates with whom he was incarcerated, or patients with Senty-Haugen at the Minnesota State Security Hospital.
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|IRS Times & Inquirer
NELSON & COMPANY, P.S.
CERTIFIED PUBLIC ACCOUNTANTS
253-752-9522 | 1-800-669-0137
Doctor Charged with $2.4 Million in Tax Evasion
A federal grand jury in Louisville, Ky., charged 58-year-old ophthalmologist Larry H. Joel with six counts of tax evasion, money laundering, and false statements to the Internal Revenue Service.
The indictment alleges that Joel evaded roughly $2.4 million in income taxes. In 1991, Joel sold his interest in a process for making eyeglass lenses for nearly $17 million. After being audited by the IRS in 1995, Joel acknowledged that he owed $2.4 million in taxes. Between 1996 and 1999, the IRS made repeated attempts to assess Joel’s ability to pay the $2.4 million in taxes. Most recently, in April 1999, Joel claimed that he had no bank accounts, real property, securities, cash, vehicles, or other assets. Joel has made no payments on his taxes, the indictment alleges.
The government alleges that Joel has used trusts to conceal his ownership of a 72-foot sport yacht and a residence in Lake Forest, Ky., purchased for $775,000 in 2002, as well as numerous motor vehicles. If convicted, he faces up to 40 years in prison.
Seattle Man Failed to Report Income of $1.8m
David Michaels Nguyen, 32, of Seattle, pleaded guilty to filing a false income tax return.
Nguyen, as an officer of Apex General Services, signed the corporate tax return for 2002 stating the gross receipts for the company were just $46,823. In fact, Apex’s actual gross receipts were $1.8 million. For tax year 2001, Nguyen claimed $13,038 in gross receipts. The real amount: more than $1 million.
Apex, which had about 60 employees, provided low-skilled, temporary employees for various businesses in Seattle. According to the plea agreement, Nguyen provided the company’s tax preparer only with information related to income that was deposited into and expenses that were paid out of the company bank account. Nguyen knew that most of the checks it received from its customers were not deposited but were simply cashed at various check-cashing establishments. Most employees were paid in cash, and their wages were not reported.
Nguyen faces up to five years in prison and a $250,000 fine.
IRS QUESTION CORNER...
Explain to me please the Installment Plan offered by the IRS. You mentioned it in an earlier edition of IRS Times & Inquirer. My accountant tells me I owe roughly $40,000 in back taxes. I could probably pay that over time. Is this Installment Plan the best solution for me?
Answer: Before I generalize, I should explain a few things: First, if you think an Installment Plan might be the best solution for you, the first step you should take is to consult a qualified tax professional. The first thing he/she will do is review your taxes with a fine-toothed comb, ensuring that the $40,000 you think you owe is in fact the correct amount. Why should you pay the federal government any more than you owe, after all?
Now, let’s assume $40,000 is what you owe. You’ll have a few options. Among them are an Offer in Compromise and an Installment Plan. The Offer in Compromise benefits many taxpayers every year, but it will only benefit you if you cannot pay the debt. If you can pay the debt but only over the course of, say, a five-year period, an Installment Plan is your best solution.
Here’s how it works: Once you and your qualified tax professional negotiate with the IRS, you and the government will work out a small monthly payment that will eliminate your debt over time without forcing you to drastically change your lifestyle. For instance, the payment you would make to the IRS would be similar to a small monthly mortgage payment or a car payment. It’ll take a pinch, to be sure, but it won’t likely put you out of your home or force you to stop sending your daughter to college. The IRS simply wants to collect the money owed, not ruin you and your family.
Once the payment amount and time period is negotiated with the IRS, that debt hanging over your head will finally be eliminated. You’ll be taking care of it a monthly chunk at a time.
Please give me a call to set up your initial appointment. For a free, no-risk consultation, call my office at 253-752-9522 or send me an E-mail at Firm@DNelsonCPAs.com. Do it today!
|David S. Nelson,
NELSON & COMPANY, P.S.
Certified Public Accountants
Tacoma Mall Office Building
4301 South Pine Street, Suite #241
Tacoma, Washington 98409-7205