June, 2008

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

Sales & Use Tax Change---Effective July 1, 2008

If you are selling goods and collecting sales tax, and ship out of your location, you must collect and report sales tax based on where the buyer receives the goods.†If you have any questions, go to: Washington State Department of Revenue.

Certified Public Accountants

IRS Times & Inquirer

Inside This Issue...

Liquor Store Owner Did Not Report $100,000 in Income
CO Insurance Agent Evaded Taxes
Indy Woman Receives 24 Months for Tax Scheme
IRS Question Corner

Liquor Store Owner Did Not Report $100,000 in Income

A Connecticut man who did not report more than $100,000 in income has received three years of probation. He must serve the first six months in home confinement.

Gurdev S. Kaura, 55, of Naugatuck, CT also must perform 150 hours of community service during his term of probation.

According to court records, during 2005, Kaura owned and operated Fairfield Wine and Liquor, a liquor store in Waterbury, CT. Kaura was also employed as a maintenance worker for Pratt and Whitney in East Hartford, where he received W-2 wages.

Kaura signed and filed a false federal tax return. In the return, Kaura falsely represented that his total taxable income was $8,136 when, in fact, his total taxable income was $123,812, the difference resulting primarily from his willful failure to report approximately $117,330 of proceeds from his liquor business. This resulted in a tax loss of $32,955 to the Internal Revenue Service.

As part of the resolution of this matter, Kaura has agreed to forfeit $87,431 and pay an additional $67,249 in monies due and owing on the tax return, which includes approximately $33,000 of outstanding interest and civil penalties.

CO Insurance Agent Evaded Taxes

Cindy L. Beyersdorf, 47, of Northglenn, CO, was sentenced to five years of probation and 300 hours of community service for filing a false federal income tax return.

She was also ordered to pay $51,684.97 in restitution to the IRS.

eyersdorf was indicted by a federal grand jury pleaded guilty to the charge. A licensed insurance agent in Colorado, Beyersdorf owned and operated Horizons Insurance, a sole proprietorship. According to the plea agreement, Beyersdorf signed and filed an individual tax return for calendar year 2001 that falsely represented the gross receipts from the operation of Horizons Insurance as $14,888 when in fact the gross receipts were $87,878.

Beyersdorf further acknowledged that her 2002 and 2003 tax returns similarly understated Horizons Insuranceís gross receipts and admitted that her criminal conduct caused a tax loss greater than $30,000.

ďIt is important for people to have confidence that when they pay their taxes, their neighbors and competitors will do the same,Ē said Terry L. Stuart, Special Agent in Charge of the IRS-Criminal Investigation, Denver Field Office

Indy Woman Receives 24 Months for Tax Scheme

Tinisha Robinson, 32, of Indianapolis, IN, was sentenced to 24 months in prison after pleading guilty to tax charges.

From January 2003 to May 2007, Robinson paid people in the Indianapolis area for use of their Social Security numbers and addresses. She then filled out a tax return in the personís name with false W-2s and other documentation and filed that with the IRS, claiming a refund due, usually for about $2,000. When the refund check arrived, the person would sign it over to Robinson for a nominal fee of $200 to $300.

About $67,000 of these fraudulent refunds were traced directly to bank accounts in Robinsonís name. Twenty-nine returns and accompanying W-2s were false, and many of the people used as conduits for the false return scheme corroborated the details of the scheme.

IRS Question Corner

Question: I owe a substantial amount in back taxes to the IRS, and the two programs I keep hearing and reading about are the Offer in Compromise and the Installment Agreement. Whatís the difference?

Answer:  The difference is enormous, and determining which program is right for you will depend entirely on the amount you owe to the IRS and your current financial situation.

No matter which program is right for you, the first step you should take is to see a qualified tax professional. He or she will analyze your previous returns to make sure you are not obligating yourself to pay the IRS even a penny more than you owe. After all, why should you go in negotiating with Uncle Sam holding a hand that isnít even yours?

Now, hereís the deal on the programs: The Offer in Compromise is available for taxpayers who, for whatever reason, amassed a serious amount of debt and now lack the financial means to pay it off. Instead of having to chase down the taxpayer for decades on end, the IRS can use the Offer in Compromise program. This allows the IRS and the taxpayer to come to an agreement on a settlement amount that will eliminate the tax debt once and for all. This settlement amount often is for pennies on the dollar, and you should have a qualified tax professional with you to negotiate this.

For those who donít qualify for the Offer in Compromise, the Installment Agreement allows indebted taxpayers to come to an agreement with the IRS that allows them to pay down their tax debt over time. Think of it like a car payment: a substantial but not life-altering monthly payment that over time will take care of your debt.

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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