March, 2008

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

Tax Rebates---What are they all about?

Contrary to the many rumors you may have heard...
The rebate checks due to mail in May and June will NOT increase your taxes for 2008. The rebate is a CREDIT against your 2008 taxes. If you extend filing of your 2007 return, don't worry; the IRS will be sending rebate checks through December 31, 2008. If you don't file your 2007 return, all is not lost; you still might qualify for the rebate when you file your 2008 tax return.

How much is the rebate?
The rebate is based on your 2007 tax. If your 2007 tax is less than $600 for single or $1,200 for married, you will not get the full rebate; you will only get the $300 minimum for single or $600 for married.

Certified Public Accountants

IRS Times & Inquirer

Inside This Issue...

"Lucky" Construction Company Owner Gets 10 Years In Prison
Crooks Buy Names and Social Security Numbers on Craigslist
IRS Question Corner

"Lucky" Construction Company Owner Gets 10 Years In Prison

The owner of a large construction management company has been sentenced to 10 years in prison after underpaying his company's payroll taxes by nearly $3 million over a 10-year period.

Lucky Mata, 47, of West Palm Beach, FL, and owner of Kodiak Construction and Management, was convicted of multiple charges relating to his evasion of federal payroll taxes. Kodiak underpaid its federal payroll taxes by nearly $3 million between 1994 and 2005, during which time it paid its workers nearly $18 million in cash payments.

Check cashers posing as subcontractors helped Mata perpetrate the scheme. Mata caused the check cashers to lie to banks about the final destination of the cash after it left the bank, and then caused multiple false federal payroll tax returns to be filed with the IRS. The total scheme involved more than $18 million in Kodiak wages over a ten-year period.

Crooks Buy Names and Social Security Numbers on Craigslist

Roger Lexin Mai was sentenced to two years in prison, to be followed by three years of supervised release, and ordered to pay restitution of $57,481 for presenting false claims to the IRS.

Mr. Mai, 33, of San Francisco, pleaded guilty to 17 counts of filing false claims. In pleading guilty, Mai admitted that from January to April 2003, he filed 17 false tax returns with the IRS. He purchased names and Social Security numbers through the Web site Craigslist for $20 per identity. He created false Wage and Tax Statements, Forms W-2, using the identities he purchased. He then created false U.S. Individual Income Tax Returns, which he filed electronically, claiming tax refunds of $107,049. The individuals to whom the identities belong did not authorize the sale or use of their identities.

Mr. Mai further admitted that in addition to the 17 false returns, to which he pleaded guilty, he electronically filed an additional 125 false Forms 1040 and Forms W-2, claiming refunds totaling $734,448.

IRS Question Corner

Question: How do I determine if I qualify for the IRS's Offer in Compromise program, and how best do I determine if the program would benefit me?

Answer:  You should first understand what the Offer in Compromise program is and why it came into being. After spending years with a bare-knuckled approach to tax collection, the IRS began to question whether working with people with tax debt would be more effective than chasing people with tax debt. They discovered that many of the people they were chasing truly wanted to pay off their tax debt - they just didn't have a way to do that.

Enter the Offer in Compromise program. It's specifically designed for people who have amassed a large amount of tax debt but who, for whatever reason, are not in a position to pay off that debt. For those who qualify, the Offer in Compromise program can reduce tax debt to pennies on the dollar and finally eliminate those IRS nightmares.

Of course, there are requirements and limitations. You can't, for example, live the high life with lavish vacations and keys to a Maserati while asking to participate in the Offer in Compromise program.

To determine if you qualify, you should first consult a qualified tax professional. He or she will analyze your returns with a fine-toothed comb to ensure that you are not volunteering to pay the IRS even a penny more than you owe. Once your tax professional has determined exactly what you owe, you and your tax professional will meet with an IRS agent to discuss the terms of your Offer in Compromise.

It's really that simple. For those who qualify, it can be a financial-life-changing experience. 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 Do it today!


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