April, 2006

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

Q & A ---After Tax Season Tips

  Q:  Now that the April 15th deadline has passed, are there any tax tips for the rest of the year?
First; extensions are necessary to give your accountant more time to thoroughly review your return and consider tax-planning opportunities. Second, lack of keeping accurate and complete financial records costs more tax dollars than any other single item. Third, owing the IRS money will not get you audited, and finally, the IRS will not zap your bank account if you electronically file.

Certified Public Accountants

APRIL, 2006

Inside This Issue....

Former Mayor Guilty of Tax Evasion
Embezzler Charged With Tax Evasion
CFO and Business Owner Plead Guilty to Filing False Income Tax Returns
IRS Question Corner


A CFO and business owner in St. Louis, Mo., pleaded guilty to two counts of filing false tax returns.

Charles Kevin Lehnbeuter, 51, filed false returns for the years 1998 and 1999. According to facts provided at the hearing, Lehnbeuter was the chief financial officer of Family Company of America from March 1996 to January 1999. The company operated grocery stores in the St. Louis area.

As part of his compensation, Lehnbeuter received a forgivable loan in the amount of $135,000. Due to an early dismissal in January 1999, the loan was forgiven by Family Company of America during the years 1997, 1998 and 1999. Lehnbeuter failed to report this taxable income on his U.S. tax returns for the appropriate years.

What's more, Lehnbeuter admitted that, beginning in 1993, he owned and operated W.W. Transtech Inc., a company engaged in the sale and distribution of disposable cutting tools. In April 1998, Lehnbeuter filed a false and fraudulent tax return for the business, overstating losses and failing to report $26,408.31 in income.

He faces up to three years in prison and a fine of up to $250,000 for each count.

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IRS Times & Inquirer
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Former Mayor Guilty of Tax Evasion

The former mayor of Burlington Township, N.J., pleaded guilty to four counts of tax evasion for his failure to claim income from golf tournaments from 1999 to 2002.

Joseph Foy Sr., 67, admitted that from 1999 to 2002, he was mayor of Burlington Township and was associated with a business known as Electrical Construction Installation Consultants (ECIC). Foy admitted that during the time period covered in the charges, he operated a for-profit golf tournament advertised as the "ECIC Mayor's Cup Golf Tournament." Each year, Foy received income from the tournament and used the money to pay for personal expenses. He did not claim the income on his personal tax returns.

In all, Foy failed to report additional income totaling $52,944, which resulted in additional taxes owed totaling $19,696. Foy faces up to five years in prison and a $100,000 fine for each count.

Embezzler Charged With Tax Evasion

Ruthanne Licursi, 55, of Strongsville, Ohio, has been charged with two counts of mail fraud and one count of attempted tax evasion.

Licursi allegedly embezzled approximately $880,737 from two Cleveland-area car dealerships and then did not report the money on her income tax returns. In all, Licursi embezzled roughly $880,000 while she was employed as an office manager at each car dealership.

Licursi attempted to evade $174,018 in taxes by not reporting the money as income. If convicted, her sentence will be determined by the court after review of factors unique to this case.


Question:     Give me the skinny: What options are available to a taxpayer who is deep in debt with the IRS? I've heard some stories of huge debt cuts.

Answer:    Indeed, the stories are at least partially true. There are a lot of options available to taxpayers, especially taxpayers who, for whatever reason, have found themselves in debt and owing a substantial amount in back taxes.

If you are one of the thousands - and there are thousands! - of taxpayers in trouble with the IRS, always keep in mind that you have many options available to you and many rights.

The absolute first thing you should do is consult a qualified tax professional. He or she will analyze your previous tax returns with a fine-toothed comb. This is a process to ensure that your previous taxes have been reported correctly. For instance, it's not uncommon for taxpayers to have overstated their tax debt to the IRS - meaning this process potentially could save you thousands of dollars.

Now for your options. As a taxpayer in debt, you will likely qualify for one of these options:

Offer in Compromise: This program allows you to make a compromise offer to the IRS if you can prove that you are financially unable to satisfy your debt. In this program, you make a compromise offer to the IRS. Oftentimes, this compromise offer, which the IRS often accepts, amounts to pennies on the dollar!

Installment Agreement: If you do not qualify for the Offer in Compromise program, you may qualify for an Installment Agreement, which allows you to pay down your IRS debt in small installments over time.

I solve IRS problems every day; I'm an IRS Problem Solver. 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!

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Nelson & Company, P.S., CPAs Since 1979

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