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June, 2012

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

IRS Rules are Totally Out of Hand -

A recent question from a client prompted me to conclude that we have really gone over the edge as to too many IRS rules.

The question was about a special code to put on a W-2. I looked up the new 2012 W-2 and W-3 instructions. They have ballooned from 11 to 25 pages. The IRS consolidated some other forms, so W-2 and W-3 instructions are in one booklet. However, somewhere along the line, another 9 pages were added.

Seems like every time we go to look up instructions for any government form or set of rules that are not new, we're finding the laws and/or instructions have been greatly expanded.

The bottom line is that nothing is simple anymore; whether it's dealing with accounting rules, software, tax rules, or everyday business transactions. As they say: "the devil is in the detail", and the major problem businesses and individuals face today is that the detail is getting deeper, and deeper, and deeper.

So before you think you know a particular law, rule, etc., take a few minutes to carefully read the instructions.

David S. Nelson, CPA, CTRS
Certified Public Accountants

IRS Times & Inquirer

Inside This Issue...

Movie Producer Files Bankruptcy After Tax Debt
Doctor Pleads Guilty to Filing False Returns
'The Money Man' of Las Vegas Sentenced to Three Years

Movie Producer Files Bankruptcy After Tax Debt

The executive producer of the smash-hit 1999 horror movie The Blair Witch Project has filed for bankruptcy protection, citing his largest debt as more than $60,000 he owes to the Internal Revenue Service.

Kevin J. Foxe filed for Chapter 7 bankruptcy protection in California, reporting $132,724 in debt, of which $60,214 is owed to the U.S. government for taxes. Foxe reported his total assets as worth $900 total.

Following The Blair Witch Project, Foxed produced a string of lesser-known movie projects, including a Blair Witch sequel and the comedy-romance American Adobo.

Doctor Pleads Guilty to Filing False Returns

A medical doctor living in New Jersey has pleaded guilty to filing a false personal income tax return for the year 2007.

Fadi J. Bejjani, 56, of Roseland, N.J., operated COPPS Medical, P.C., a pain management center in Utica, N.Y., and later in New Hartford, N.Y. With degrees from the University of Paris and New York University, Bejjani had 32 years of medical experience and specialized in spine, trunk and limbs.

From 2005 to 2008, he had income of approximately $538,110 over and above what he reported on his personal tax returns.

Bejjani accomplished this by diverting payments to his medical practice to personal accounts. In his plea agreement, Bejjani admitted he failed to include $139,381 as income on his 2005 tax return, $127,532 on his 2006 tax return, $161,135 on his 2007 tax return, and $110,062 on his 2008 tax return.

As a result, Bejjani owes $164,409 in back taxes.

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

'The Money Man' of Las Vegas Sentenced to Three Years

A Las Vegas tax preparer known as “The Money Man” has been sentenced to almost three years in federal prison for filing false tax returns for clients and obstructing the IRS.

Vernon K. Newson, 54, of Las Vegas, was convicted by a jury on 22 counts of preparation of false tax returns, one count of obstruction of the enforcement of the tax laws, and two counts of presenting a false tax return to the government.

According to court records, Newson provided payday loans, bill-paying services, DMV registration and tax return preparation.

Between the 2002 and 2006 tax years, Newson filed 22 false tax returns for 10 clients. Newson padded customers’ tax returns with false deductions and credits, invented businesses to create business losses, and inflated W-2 wages and itemized deductions.

Newson also attempted to cover up his activities by telling clients to lie to auditors and presented two other false tax returns in 2006 for “undercover” businesses that were being tracked by the IRS.

The court determined the tax loss to the government was approximately $142,949.


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

Circular 230 Disclosure:
To ensure compliance with requirements imposed by the IRS, we inform you that (i) any tax advice contained in this communication (including any attachments) was not intended or written to be used, and cannot be used for the purpose of avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein.