Inside This Issue....
Tax Scheme Promoter Convicted In New York
Former IRS Agent, Strip Club Owner Gets 18 Months
Exec Gets 43 Months
IRS Question Corner
COMTROL EXEC GETS 43 MONTHS
The former president of Comtrol Corporation of Maple Grove, MN, was sentenced to 43 months in prison for conspiracy and tax evasion.
Lee D. Stagni, 53, of Plymouth, MN, helped Comtrol's owner and CEO, Robert Beale, evade $2.5 million in federal and state taxes and more than $280,000 of his own taxes. Stagni also was ordered to pay a $60,000 fine and cooperate with the Internal Revenue Service in paying approximately $200,000 in taxes owed.
Following a 12-day trial, Stagni was convicted of one count of conspiring to defraud the United States and five counts of aiding and abetting tax evasion.
According to the evidence presented during that trial, Stagni assisted Comtrol's owner and CEO in a scheme to pay the CEO his salary through a sham company.
Beale, the owner and CEO of Comtrol Corporation, remains a fugitive.
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Tax Scheme Promoter Convicted
In New York
A federal jury convicted A. Thomas Thorson, 67, of New York, for conspiracy to defraud the U.S. Treasury Department and aiding the filing of false income tax returns in connection with a scheme to sell millions in fraudulent income tax deductions.
"People who cheat the IRS are cheating their friends, neighbors and fellow citizens," said United States Attorney Rod J. Rosenstein.
Testimony at the three-week trial showed Thorson and his co-conspirators persuaded wealthy individuals to invest in a partnership called Heritage Memorial Park Associates (HMPA). By becoming partners, the investors were told, they would receive a tax deduction and resulting tax benefit that would be substantially larger than their investment.
In fact, the HMPA partnership returns fraudulently inflated the deductions that the partners could claim on their individual income tax returns by more than $8 million.
Relying on the false partnership returns, the investors filed individual income tax returns for 1996 through 1998 that claimed fraudulently inflated deductions for charitable contributions.
Thorson faces up to five years in prison and a fine of up to $250,000.
Former IRS Agent,
Strip Club Owner
Gets 18 Months
Former IRS agent Ronald C. Heidel, 60, of Sanibel, FL, received 18 months in prison to be followed by one year of supervised release for making false statements on his and his wife's joint tax return for the year 2001. Heidel was also ordered to pay a fine of $30,000 and $135,236 in restitution to the IRS.
According to court records, Heidel worked as a revenue agent for the IRS from the mid-1970s to early 1979. He was convicted in 1983 on two charges of accepting monetary compensation from a company during his tenure as an IRS agent and filing a false corporate tax return on behalf of a company he had audited during his service with the IRS. In March 1999, Heidel purchased the Gentlemen's Gold Club, a restaurant and bar in Baltimore County that also featured entertainment by exotic dancers.
As president of the club, Heidel received the cash generated by door admissions charges and sales of food and drinks at the club on a daily basis. Between May 3, 1999, and Dec. 27, 2001, Heidel deposited $1.467 million in cash derived in part from the operations of the club into various personal bank accounts rather than the company's bank accounts. Many of these cash deposits were between $7,000 and $9,000. This income was not reported to the IRS.
IRS QUESTION CORNER...
Question: So a colleague told me about the Offer in Compromise program. Why would the IRS be willing to allow taxpayers to settle for less than they owe, and how do I determine if I'm eligible for the program?
Answer: The answer to your first question is simple: After spending years chasing deadbeat taxpayers, going door to door, office to office, city to city, the IRS realized that the hard-knuckled approach isn't always the most effective.
Another effective solution, the IRS discovered, includes compromise and negotiation. With the Offer in Compromise program, the IRS can bring people with tax debt to the table and negotiate a payment amount that will settle their debt once and for all. Oftentimes, as your colleague may have told you, this can amount to pennies on the dollar.
For taxpayers whose income has diminished significantly since they racked up their tax debt, the Offer in Compromise can be an ideal way to cancel out their arrears once and for all. In my experience with previous clients, an Offer in Compromise can offer a financial reward as well as an emotional one: Imagine how you'll feel once you realize you never have to think about your IRS debt again.
Your second question is a little more complicated. I recommend you consult a qualified tax professional as soon as possible. He or she will analyze your previous tax returns and your current financial situation to determine exactly what you owe and whether your current financial situation qualifies you to participate in the Offer in Compromise program. An IRS agent will take into account your current income and possessions such as expensive cars when determining eligibility.
However, even if you do not qualify for this particular program, there are a number of options available to taxpayers with tax 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!