NELSON & COMPANY, P.S.
Certified Public Accountants
Tacoma Mall Office Building
4301 South Pine Street, Suite #241
Tacoma, Washington 98409-7205
David S. Nelson, CPA
E-MAIL: Firm@DNelsonCPAs.com
ON THE WEB: NEVERPAYTAX.com
PHONE: 253-752-9522
FAX: 253-276-0144
1-800-669-0137
Edition 0405-1
E-MAIL TAX BULLETIN
April, 2005
Message From Nelson & Company, P.S., CPAs
Q & A ---Give Tax the Ax
  Q:  I just did my taxes and paid a lot more than expected. Are there any steps I can take for 2005 to cut my tax bill?
  A: 
Here are six things to reduce your taxes for the coming year:
  1. Maximize your 401K, SEP, or IRA contributions.
  2. Keep careful records of all tax-deductible payments, i.e., contributions and business expenses.
  3. Clean out closets, attics and basements of usable items and donate them to your favorite charity.
  4. Take out a home equity loan to pay off credit cards and consumer loans. The interest may be deductible.
  5. Keep track of mileage for charitable work, medical appointments, and non-reimbursed business trips.
  6. Ask your employer for reimbursement of all business and travel expenses.
    Remember; write-offs are rip-offs!
NELSON & COMPANY, P.S.
Certified Public Accountants

APRIL, 2005

Inside This Issue....

"I owe that much?...Well, how much would I owe if I turned in a friend?"

ARIZONA MAN CLAIMS
$0 INCOME

Dorvin J. Jones, 54, of Prescott, Ariz., has been indicted on charges that he claimed $0 as income for three years when, in fact, he made much more.

The indictment alleges that Jones earned $72,008 in 1998, $96,858 in 1999 and $32,250 in 2000.

If convicted, he faces up to three years in prison and a fine of up to $250,000.

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IRS Times & Inquirer
NELSON & COMPANY, P.S.
CERTIFIED PUBLIC ACCOUNTANTS
253-752-9522 | 1-800-669-0137

Couple Indicted For Conspiracy and Tax Evasion

A husband-and-wife team was arrested in Colorado on a charge that they conspired to defraud the U.S. government and four counts of tax evasion. Bill Ledford, 56, and his wife, Loraine, 56, both of Florissant, Colo., were co-owners of Service Engineering, a heating ventilation air conditioning service and sales business in Colorado Springs.

In 1992, the Ledfords owed the IRS $1,755 in personal income taxes, according to the indictment. They then failed to file personal income tax returns for 1993, 1994 and 1995. In 1998, the IRS notified the Ledfords that together they owed more than $1 million in taxes for years 1993 to 1995.

During the course of the investigation, the government determined that the Ledfords created a number of trusts within the State of Utah to conceal income and assets. They used the trusts to pay for a new home and their sonís college tuition.

If convicted, the Ledfords each face up to five years in federal prison and/or a $250,000 fine for conspiracy to defraud the United States, and not more than five years in prison and/or a $100,000 fine for each of the four counts of tax evasion.

Two Men Charged with Filing False Returns

Two California men have been charged with filing of false tax returns, theft of refunds relating to those returns and identity theft.

Gilbert Torres, 62, and Armando Garza, 65, devised a scheme, from approximately April 2001 to August 2004, to file numerous false tax returns using real people, then cash the fraudulent refund checks. The IRS issued checks ranging from $229 to $4,811 based on the information provided in the returns.

If convicted for the most serious offenses, Torres and Garza each face up to 30 years in prison and a $1 million fine.

IRS QUESTION CORNER...

Question:     I owe a great deal of money to the IRS, and although my job and assets certainly won’t allow me to claim poverty, I just can’t pay the whole amount at one time. A colleague mentioned an Installment Agreement. Is this something that could work for me?

Answer:     Good question. And the answer is, yes, quite likely it would work for you. For those who do not qualify for the Offer in Compromise program ó which allows taxpayers to reduce their tax debt by pennies on the dollar if they can prove they are not able to pay the debt ó an Installment Agreement is generally the best option.

For a variety of reasons, average taxpayers find themselves in situations where they cannot pay their tax debt. In nearly every instance, the taxpayer did not intend to amass such a large debt. It just happened. The IRS is well aware of this. Thatís why collections agents are usually receptive to an Installment Agreement. Besides, as far as the government is concerned, a little money now and then is better than no many at all.

Hereís how an Installment Agreement works: Once you and a qualified tax professional analyze your previous tax returns and come to the exact amount you owe the government, you can then negotiate a situation in which you will pay the tax debt off over a period of time. Your tax professional and the IRS agent assigned to your case will review your income information and assets and come up with a monthly payment amount that will not adversely affect your life or lifestyle. For instance, if youíre sending a kid to college, donít worry about it ó your ability to pay tuition costs will not be affected.

The monthly payment amount would be similar to, for instance, a car payment ó a substantial payment but small enough that you can reasonably afford to make every month. Really, itís that simple. For many taxpayers, finally coming to an agreement and plan with the IRS is the best actions theyíve ever taken. I can help. 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, C.P.A.
NELSON & COMPANY, P.S.
Certified Public Accountants

Tacoma Mall Office Building
4301 South Pine Street, Suite #241
Tacoma, Washington 98409-7205
Phone: 253-752-9522
FAX: 253-276-0144
E-MAIL: Firm@DNelsonCPAs.com
WEB: www.NEVERPAYTAX.com