December, 2007

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

Q & A ---Refund in January?

  Q:  Will I be able to get my refund in January?
  A:  Maybe. If the President and Congress pass the Alternative Minimum Tax Bill, tax return processing could be delayed until the first of march. If it doesn't pass, processing should begin the middle of January. Without passage of the Alternate Minimum Tax Bill, over six million Americans will pay at least an additional $2,000 in tax.

Certified Public Accountants


Inside This Issue...

CA Man Gets Record Penalty For Tax Evasion
Civil Rights Attorney Guilty of Evasion
Business Owner Kept
Payroll Taxes
IRS Question Corner

"But you can't run away from home. You're the only one who knows how to retrieve mommy and daddy's tax records from the computer!"

Business Owner Kept
Payroll Taxes

A Missouri man was charged with failing to pay employment taxes after he had collected them from his employees.

Paul Scott King Jr. was an officer of two corporations, Nurses Now LLC and Ichor Health Services. According to the indictment, King deducted and collected from the total taxable wages of the corporations' employees income taxes and did not pay them to the IRS. The amounts owing, according to the indictment, is $127,302 for Nurses Now LLC and $5,017 for Ichor Health Services, Inc.

"A substantial portion of the total tax gap, the difference between what is owed and what is paid, is believed to involve employee withholdings," stated James D. Vickery, Special Agent in Charge of IRS Criminal Investigation. "Criminal Investigation continues to support IRS efforts to enhance employment tax compliance."

If convicted, King faces up to five years in prison for each count.

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CA Man Gets Record Penalty For Tax Evasion

The owner of Oxnard, CA. based Haas Automation was sentenced to two years in federal prison for orchestrating a scheme in which tens of millions of dollars in bogus expenses were put on the company's books in an attempt to avoid the payment of more than $34 million in federal income taxes.

Gene Francis Haas, 54, of Camarillo, CA., was ordered to begin serving on Jan. 14, 2008. Haas has already paid a $5 million fine.

As part of a plea agreement, Haas agreed to sign "closing agreements" for tax years 2000 and 2001 and to pay all outstanding taxes, plus penalties and interest. In court, it was revealed that Haas has paid more than $70 million to the government to resolve his tax issues for the two years he defrauded the government - a record amount.

"Mr. Haas has now paid the government more than twice the amount of taxes he attempted to avoid paying," said United States Attorney Thomas P. O'Brien. "This huge monetary penalty, as well as the two-year prison term, should reassure law-abiding citizens that tax evasion can and will be rooted out, and that there are significant ramifications for those who attempt to cheat the government."

Civil Rights Attorney Guilty of Evasion

Venice, CA civil rights attorney Stephen G. Yagman was sentenced to 36 months in federal prison for attempting to evade more than $100,000 in federal income taxes and committing bankruptcy fraud.

U.S. Dist. Judge Stephen V. Wilson said he imposed a "serious sentence" after being "shocked" by Yagman's testimony in court, which was "so transparently untrue in so many areas."

A federal jury convicted Yagman in June, finding him guilty of 19 felony counts - one count of attempting to evade the payment of taxes, one count of bankruptcy fraud and 17 counts of money laundering. On a defense motion following the trial, Judge Wilson later acquitted Yagman on six of the money laundering counts.

"In this case, in my view, justice was done," Judge Wilson said today. "The jury was right."

Yagman had $158,000 in tax debt, including penalties and interest.


Question:   If I am not eligible for the Offer in Compromise program, can I enroll an Installment Agreement? And if so, how does it work?

Answer:   The answer: Yes.

The Offer in Compromise program is for taxpayers who, for whatever reason, have amassed a tax debt that they cannot pay under any circumstance. Taxpayers who do qualify for the program can have their tax debt reduced by pennies on the dollar.

However, there are strict criteria for qualification and some people who have tax problems may not qualify for the program. For these taxpayers, there is the Installment Agreement.

It's pretty simple: For taxpayers who have tax debt that they cannot afford to pay off with a single check, the Installment Agreement is available. It allows taxpayers to pay off their tax debt over time by making monthly payments to the IRS that work similarly to a car payment or mortgage. The idea is to allow American taxpayers to pay off their debt without forcing them to lose their homes or pull their children out of college.

After years of chasing deadbeat taxpayers with little success, the IRS discovered that gentler programs such as the Installment Agreement can actually be more effective than hard-nosed tactics.

You may indeed qualify for the Installment Agreement. To find out, the first thing you should do is consult a qualified tax professional. He or she will analyze your returns to determine exactly what you owe and then set up a meeting with an IRS agent to discuss your case.

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 Do it today!


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