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October, 2010

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

Protect Your Good Name - Minimize your vulnerability to identity theft.

Identity theft is one of the fastest growing crimes in the country. An estimated 9 million Americans become victims every year, with credit card fraud leading the pack. The number of ways you could become the next victim are too many to list, so here are some simple and common sense tips that can help keep you from becoming a statistic.

Basic Cautions:

Securing your private information can be easy. It just takes some thought and planning.

Certified Public Accountants

IRS Times & Inquirer

Inside This Issue...

Healthcare Exec Guity in Tax Evasion Case
Police Employee Admits to Evasion
IRS Question Corner

Healthcare Exec Guilty in Tax Evasion Case

A healthcare executive has pleaded guilty to a multi-year scheme to evade payment of employee withholdings and other payroll taxes. The illegal conduct resulted in a tax loss of more than $1.5 million.

From 1994 and 2001, John Durante, 50, of Old Saybrook, CN, was involved in the operation of several small healthcare businesses, which repeatedly failed to pay corporate income and payroll taxes including employee tax withholdings identified on the Employer’s Quarterly Federal Tax Returns, unemployment taxes identified on the Employer’s Annual Federal Unemployment Tax Return, and income tax on the Corporate Income Tax Return.

Durante faces up to five years in prison and a fine of up to approximately $3 million. He also must cooperate with the IRS to pay all outstanding taxes, penalties and interest.

Police Employee Admits to Evasion

A communications officer with the Newark Police Department admitted that she evaded income taxes by maintaining a fraudulent IRS Form W-4 with the city and failing to file an individual tax return.

Leslie Wofford, 47, of Hillside, NJ, and a 22-year veteran of the Newark Police Department, filed a W-4 with her employer, the City of Newark, in 2001 falsely claiming 99 exemptions from federal income tax withholding. Wofford admitted that she filed the fraudulent form so that no federal income tax would be withheld from her paycheck and that she maintained the form on file with the city through November 2007.

In 2004, 2005, and 2006, Wofford received wages from the City of Newark in the amount of approximately $45,065, $48,099, and $54,426, respectively, but failed to pay any federal income tax for those calendar years.

In November 2007, the IRS directed Newark to nullify Wofford’s false claim of 99 exemptions and to begin withholding from her paycheck. In March 2008, Wofford filed a second fraudulent W-4 that falsely claimed the exemptions. In 2007, Wofford received wages from Newark in the amount of approximately $55,343 and failed to pay any federal income tax for that calendar year.

She faces up to five years in prison and a fine of up to $250,000.


IRS Question Corner

Question: What are my chances of succeeding in an Offer in Compromise? I owe far more than I’d like in back taxes, certainly more than I can pay back tomorrow or the next day.

Answer:  Without having firsthand access to your financial information and previous tax returns, I can’t say with certainty whether an Offer in Compromise would work for you. But speaking generally, your situation does suggest you would be a good candidate for the program, and I’d urge you see a qualified tax professional.

In the meantime, I think it would help you to understand what the Offer in Compromise program is and how one qualifies. This will help you assess whether the program is right for you.

Simply enough, the IRS developed the Offer in Compromise program after discovering that chasing delinquent taxpayers can be an inefficient business. In fact, the tax-collecting agency discovered that revenue collection can be more efficient with flexibility rather than an iron fist.

Enter the Offer in Compromise. This program is designed for taxpayers who are unable to pay their back taxes and lack the prospective means to do so in the future. This could be due to business failure or personal tragedy. Whatever the cause, the IRS uses the Offer in Compromise so as not to chase yet another taxpayer who isn’t able to pay the debt, no matter how much they’d like to do so.

If you qualify, you and your tax professional will meet with the IRS and negotiate a settlement agreement that often amounts to far less than you owe. Once that is settled and paid, your IRS nightmare is over. Now, of course, you and your tax professional should first analyze your previous returns and make sure there were no mistakes in previous filings.

Have a tax problem? I solve them every day; that’s because I’m an IRS Problem Solver. 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.