February, 2008

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

Tax Rebates---What do you have to do?

You don't need to do anything to get the "Tax Rebate" checks that will start going out sometime in May.†The IRS will calculate the amounts and send the checks (or direct deposit). If you have elderly parents that have not recently†filed and their income is only Social Security, to speed their $300 rebate checks, they should send in their 1040A with the words "Stimulus Payment" across the top of the form. There is nothing for you to do, there is nothing we can do. Please don't call us asking about the rebates as we are very busy preparing returns.

Certified Public Accountants

IRS Times & Inquirer

Inside This Issue...

Personnel Exec Ordered to Pay $4.2m
Tax Protester Gets 18 Months
IRS Question Corner

Personnel Exec Ordered to Pay $4.2m

After pleading guilty to failing to pay payroll taxes, Bruce Alexander Brown, the former owner of employee-leasing business Excell Personnel, was sentenced to 36 months in prison and ordered to pay $4.2 million in restitution to the IRS.

Brown, a Dallas resident, did not pay federal payroll taxes for Excell in 2001 and 2002. According to court documents, Brown's company "leased" employees to companies that did not want to hire their own workers. Excell would locate, hire and train the employees, and then provide them to businesses that were Excell's customers. The businesses would pay Brown, who in turn would pay the employees.

Brown admitted that he was aware of the legal obligations to pay over to the IRS the required withholding taxes, Social Security taxes and Medicare taxes. He simply chose not to pay the taxes.

Tax Protester Fails to Report $2m
...gets a Free 18 Month Stay at Federal Prison

Roy A. Ottinger II, 48, of Phoenix, AZ, was sentenced to 18 months in federal prison after being charged†on two counts of failing to file income tax returns. Ottinger was also ordered to cooperate with the IRS in order to come into compliance.

Ottinger was a licensed chiropractor in the state of Arizona, conducting his chiropractic practice in Apache Junction through Optima Multi-Care PLC, a Limited Liability Company that Ottinger incorporated in 1999. In 2001 and 2002, Ottinger earned a gross income from his practice of $1,110,263 and $826,309, respectively. Ottinger also earned rental income of $51,466 in 2001 and $59,807 in 2002 generated from numerous properties he owned.

Claiming his income was excluded from taxation based on the U.S. Constitution, Ottinger did not file a correct tax return between 1992 and 2005. In 1994 Ottinger's accountant advised him that his anti-tax views were incorrect and invalid.

Beginning as early as 1998, the IRS initiated examinations on Ottinger for his 1994, 1995 and 1997 tax return delinquencies. Ottinger responded to the IRS with letters espousing his anti-tax views and filed tax returns reflecting zero income for the years 1994, 1995 and 1997.

IRS Question Corner

Question: I donít think I qualify for the Offer in Compromise program. However, Iíve heard a little bit about the IRSís Installment Agreement. What is that and how could it help me?

Answer:  First, unless you have consulted with a qualified tax professional and he or she has advised you that you do not qualify for the Offer in Compromise program, do not assume you are ineligible.

The Offer in Compromise program is a powerful tool for taxpayers that can allow those saddled with tax debt to reduce that debt by pennies on the dollar!

But, for the sake of this Q&A session, let's assume indeed you do not qualify for the Offer in Compromise program:

The Installment Agreement is exactly as it sounds: It allows you to pay down your IRS debt by making small monthly payments that over time will eliminate that debt entirely. Think of it the same way you might think of a car loan: a substantial amount of money to pay every month but not so substantial that your lifestyle must change drastically or you have to pull Suzy out of college.

After years of chasing deadbeat taxpayers, the IRS has learned that offering flexible programs can in fact be a very effective way of bringing more and more Americans into tax compliance. One reason many Americans in the past chose not to work with the IRS was simply because they did not have the money available to pay their debt. The Installment Agreement solves this by allowing taxpayers to pay off their tax debt piecemeal.

If you think you would benefit from this program, you should consult a qualified tax professional who will analyze your tax returns and determine exactly what you owe the IRS and then discuss such an arrangement with a tax agent.

I deal with problems like yours every day. For a free, no-risk consultation, please call my office at 253-752-9522 or send me an E-mail at Firm@DNelsonCPAs.com. Do it today!


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