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July, 2009

IRS Times & Inquirer

Inside This Issue...

Arizona Consultant Gets 12 Months for Not Filing
Oregon Man Sentenced for Tax Charge
TN Man Gets Three Years of Probation
IRS Question Corner

Arizona Consultant Gets 12 Months for Not Filing

An Arizona businessman has been sentenced to 12 months in federal prison for failure to file a federal income tax return.

Mario Alexander Pino, 38, a self-employed consultant in Scottsdale, was indicted by a federal grand jury in August 2008 and entered a guilty plea in March 2009 to the crime of willful failure to file his 2003 tax return. Pino was also ordered to serve one year of supervised release upon leaving prison.

Pino admitted that a reasonable estimate of his 2003 income was $602,933 and that his federal income tax liability on that income was approximately $192,244. In addition, Pino admitted as part of his guilty plea that he purposefully did not file his 2003 return by April 15, 2004, and that he knew that he had an obligation to do so. Despite not filing his return, Pino said that he used an unfiled 2003 return as supporting proof of his income in making applications for automobile and mortgage loans in 2004 and 2005.

Oregon Man Sentenced for Tax Charge

Mark Arthur Henriksen, of Monmouth, OR, was sentenced to 12 months and a day in prison after pleading guilty to one count of income tax evasion for the 2001 tax year. Henriksen was a principal of Applied Technical Systems, a business in Lake Oswego.

Henriksen evaded the assessment of his income taxes in 2001 by instructing employees of ATS to make his bonus checks payable not to him but instead to third parties.

TN Man Gets Three Years of Probation

Jeremy S. Schmid, 31, of Sevierville, TN, was sentenced to three years of probation and six months of home detention. He was also ordered to pay $204,723.47 in restitution to the IRS. Schmid pleaded guilty to three counts of failing to file tax returns with the IRS. According to the stipulation of facts filed with the court at the time of his plea, Schmid admitted to willfully failing to file returns for the 2002, 2003 and 2004 tax years.

IRS Question Corner

Question: I owe a lot of money in back taxes to the IRS. I’d prefer not to go into details, but let’s just say it’s a mix of employment changes and some bad tax advice. There’s no way I can pay what I owe. What can I do?

Answer:  First of all, your situation isn't altogether uncommon. Many taxpayers have been, and are, in your exact situation. So take some solace in knowing you are not alone.

Now, what do you do next? The good news is that you have options, no matter the reasons why you got into this tax debt.

Your first step should be to consult a qualified tax professional. He or she will deeply analyze your previous tax filings and records to make sure you have not obligated yourself to pay the IRS even a penny more than you owe. Once your qualified tax professional has come to an exact amount you owe, it will be time to meet with the IRS. Here you likely have two main options:

The first is the Offer in Compromise. This program allows taxpayers who owe a substantial amount, but for whatever reason are unable to pay this debt, to negotiate with the IRS on a settlement— often resulting in a payoff amount of less than owed. After years of chasing deadbeat taxpayers with mixed results, the IRS realized that a kinder, gentler approach can often be more effective in tax collection. The result of this is the Offer in Compromise program. You must meet certain criteria to qualify, but if you do, it’s an excellent option.

The second option is the Installment Agreement. This allows you to pay your debt down over time by making manageable monthly payments to the IRS. Think of this like taking out a car loan — payments large enough to pay down your debt but not so large as to change your lifestyle significantly.

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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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.