November, 2008

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

It's Tax Planning Time! ---Get busy, especially if you think you will owe.

December is the month for tax planning. If you feel you're going to have a major tax liability for 2008, please get the data to us ASAP so we can do the projections and consider options to reduce your taxes.

Capital Losses

Remember, you must sell those loser stocks in order to get a tax write-off. Capital losses are limited to $3,000 per year, net of gains and losses.

Roth IRAs

If you are considering converting your IRA to a ROTH, in most cases, it would be best to wait until 2010 when there is no limit to your other sources of income. NEW

Economic Act of 2008

The new act restored your ability to donate a portion of your IRA to your favorite charity to a maximum of $100,000. If you're over 70 1/2 and want to reduce your required minimum distributions, this is a good way to lower your tax bill for future years.

Also, folks who ride their bicycles to work are now entitled to a $20 per month fringe benefit from their employer. And finally, the sales tax deduction is back.

Certified Public Accountants

IRS Times & Inquirer

Inside This Issue...

Georgian National Pleads Guilty to Tax Evasion
Some People Just Never Learn...VA Man Faces Prison Again
IRS Question Corner

Georgian National Pleads Guilty to Tax Evasion

Vitali Popkov, a 31-year-old Georgian national living in Morrow, Ohio, pleaded guilty to one count of committing income tax evasion and one count of aiding and abetting marriage fraud.

Popkov admitted that he operated Mirage Cleaning Services of Cincinnati from September 2003 to December 2007. His company contracted with area businesses and hotels to provide cleaning services.

From January 2004 to December 2007, Popkov paid wages totaling $2.7 million to his employees but knowingly failed to withhold federal income taxes on wages paid and failed to pay the companyís share of the taxes.

As a result, Popkov evaded $423,635 in federal employment taxes.

He faces a punishment of up to five years in prison, a fine of up to $100,000 and payment of taxes, interest and penalties on the amount of unpaid taxes.

Whatís more, Popkov admitted that he helped an associate arrange a sham marriage with a U.S. citizen in Louisville, Ky.

For the marriage fraud charge, Popkov faces up to five years in prison and a fine of up to $250,000, as well as possible deportation.

Some People Just Never Learn.



VA Man Faces Prison Again

A Virginia man may be headed back to prison for tax evasion. Richard C. Menner, 48, of Glen Allen, Va., was convicted on five counts of filing a false federal tax return and one count of obstruction of justice following a three-day jury trial.

Menner was previously convicted in federal court in 1998 on five counts of failing to file his individual income tax returns for tax years 1991 through 1995 after evidence was introduced at trial showing that he had received income from various individuals and building contractors during the prosecution years.

After Menner was released from prison, evidence showed he obstructed the IRSís attempts to assess and collect the taxes owed for tax years 1991 to 1995 by repeatedly submitting documents to the IRS that set forth frivolous legal arguments claiming that he had not earned any income during those years and that he owed no tax.

IRS Question Corner

Question: Whatís the saying? When your friend loses his job, itís a recession. When you lose yours, itís a depression. Well, itís a depression ó and itís worse because I owe a substantial amount in taxes. I feel hopeless. What can I do?

Answer: First of all, you arenít alone. In fact ó and this is tragic ó as the economy worsens, there may be many more people in positions just like yours.

Itís important to remember right now that you are not in fact hopeless or helpless. You have options, and now is a time when you should explore what option will be best for you moving forward.

Since you say you are unemployed and owe a lot in taxes, one of your best options may be the Offer in Compromise. This IRS program is designed for taxpayers who, for whatever reason, have found themselves in a situation in which they absolutely cannot pay their tax debt. Obviously, losing a job in a bad economic climate could be such a situation.

The first thing you should do is consult a qualified tax professional. He or she will analyze your return, ensuring that you are not obligating yourself to pay the IRS even a penny more than you truly owe. Once your true debt figure has been established, your qualified tax professional will negotiate a final settlement amount. This often amounts to pennies on the dollar.

Unbelievable, you might be saying. Not really. After chasing taxpayers without much success, the IRS discovered a kinder, gentler approach, such as the Offer in Compromise, can be more effective in collecting taxes than a steel fist.

While I think the Offer in Compromise is the first option you should explore, given your situation, itís not your only option. Another is the Installment Agreement. Letís talk about your options. 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

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