December, 2010

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

Tax Day Changed? - Tax Returns Due April 18th

In recognition of Emancipation Day, Washington D.C. will be closed April 15th, 2011. This gives taxpayers an extra three days to file their returns. State taxes, if any, are still due April 15th.

NELSON & COMPANY, P.S.
Certified Public Accountants


IRS Times & Inquirer

Inside This Issue...

Wesley Snipes Goes to Prison
Vegas Nightclub Host Guilty of Tax Crime
IRS Question Corner


Wesley Snipes Goes to Prison

No, it's not a movie. Actor Wesley Snipes has been taken into federal custody to serve a three-year prison sentence following his conviction on tax charges.

Snipes, the star of Blade and White Men Can’t Jump, was convicted of willfully failing to pay taxes on $38 million of income for the tax years 1999 to 2001.

Snipes had appealed his conviction on the grounds that some jurors were prejudiced against him. But Judge William Terrell Hodges ruled against Snipes and ordered the actor to prison.

Hodges wrote in his decision: “The defendant Snipes had a fair trial; he has had a full, fair and thorough review of his conviction and sentence. The time has come for the judgment to be enforced.”


Vegas Nightclub Host Guilty of Tax Crime

A former “VIP host” at Pure Nightclub, located in Caesars Palace Hotel and Casino in Las Vegas, pleaded guilty in federal court to one count of filing a false federal income tax return for the 2006 tax year.

According to information disclosed at the guilty plea hearing, during the years 2005, 2006 and 2007, Richard Chu’s responsibilities as a VIP host at Pure included promoting the club, booking reservations and seating patrons at tables.

In addition to paying an admission fee, Pure patrons typically made payments to Pure door personnel and VIP hosts to bypass the general admission line and to obtain more desirable seating. This money was collected, pooled and distributed on a weekly basis to Pure managers, door personnel and VIP hosts, including Chu. Chu’s distributions from the pool comprised the bulk of his compensation during the time he worked at Pure. Chu concealed large amounts of this income from the IRS.

“We all pay when someone like Mr. Chu pockets his income without paying taxes,” said Victor Song of IRS Criminal Investigation.


IRS Question Corner

Question: Call me skeptical, but I find it hard to believe this Offer in Compromise stuff will work. Can you explain why I’m wrong?

Answer:  Skepticism is healthy, of course. But I assure you the Offer in Compromise is real, and for those who quality, it works.

It might help for you to understand the IRS’s perspective. The tax-collecting agency received a reputation for being aggressive by pursuing at great lengths taxpayers who owed money to the government. In some cases, this strategy worked. In other cases, the IRS spent countless hours going after taxpayers who, no matter how aggressively pursued, were unable to pay their tax bills.

The fundamental question for the IRS became: Do we compromise and agree to accept partial payment or continue to spend hours chasing a debt that may never be paid?

The IRS chose the former, and from this decision came the Offer in Compromise. This unique program is designed for taxpayers who, for whatever reason, are unable to pay their tax debt. Health problems, business failure, death in the family – there could be many reasons why. But for those who qualify, the Offer in Compromise can reduce tax debt by a significant amount.

Of course, the first thing you should do is determine whether you qualify. I recommend consulting a qualified tax professional who will analyze your previous returns and your current financial situation to determine eligibility.
You may find out that, in fact, you do not qualify for the program. If this is the case, don’t fret. You have other options, including the Installment Agreement.

I can help you determine whether the Offer in Compromise is right for you. I deal with IRS problems such as yours 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 Firm@DNelsonCPAs.com. Do it today!


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Nelson & Company, P.S., CPAs Since 1979

====NOTICE REQUIRED BY IRS====
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.

 

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