No Cheat Codes for the IRS: Video Game Developer Goes to Jail for Tax Fraud

December 17, 2010 by

Video game developer David Rushton is going to spend six months in jail for tax evasion.  This is certainly quite a change in Rushton’s circumstances: he’d been a successful video game developer, working on Street Fighter II: Hyper Fighting, Tiger Woods PGA Tour 2005, and other well regarded titles.

What went wrong? David Rushton started his own company in 2005, which grew to employ over 200 people.  He then failed to file his tax returns for the next two years.   Additionally, he filed phony W-2s that generated fraudulent returns. The Utah Tax Commission investigated, and it was game over for David Rushton.

Filing Late Tax Returns

David Rushton failed to file state tax returns for two years.  He’s not alone.  Many people miss state and federal tax filings, with absolutely no intention of ever breaking the law.  Filing a return gets forgotten, or postponed, and suddenly a year’s gone by. Then another year passes, and another.  People delay addressing the issue because they don’t know where to start.

Unfortunately, a serious problem can develop while you’re trying to figure it out. Failure to file state and federal tax returns carries serious criminal penalties.

It’s always better if you find solutions to your tax problems before the tax authorities let you know there’s a problem.  Don’t wait for the state tax department or the IRS to contact you about your unfiled tax returns. Start solving the problem right away. If you are in the same situation, here’s a few things you need to know:

  • You have the right to file an original return, no matter how late it is!
  • Late returns often receive special scrutiny from the tax authorities.
  • It is prudent to have qualified professional assistance when filing late tax returns — particularly if you’re going back a number of years.

Don’t file late tax returns on your own.  Work with a licensed tax professional to make sure your interests are protected.

Filed Under: Tax Problem Resolution Blog Tagged With: , , ,

What Will It Take To Solve Your Tax Problems?

December 14, 2010 by

2010 is drawing to a close. Is this the last year you’ll spend with the pressure of unresolved tax issues hanging over your head? The answer to that question lies entirely in your hands – but many people don’t know how to begin to answer it.

If you have unresolved tax issues, including unfiled or late tax returns, payroll tax problems, or more, you know the stress, tension, and fear that comes from this situation. You may have experienced the sleepless nights and a sinking feeling in your stomach every time you have to check the mail — is another IRS notice in there, waiting for you?

Tax Problem Solvers in Massachusetts

The first step in resolving your tax problems is making the choice to face the situation head on.  Your tax problems won’t disappear on their own.  The IRS is not going to forget about you; your case won’t ‘get lost in the paperwork’ indefinitely.  You can not run away from tax problems: they will follow you from job to job, state to state, affecting every aspect of your financial life.

The only way to get rid of tax problems is to solve them.

You don’t have to do this alone.  You don’t need to become a tax attorney or some kind of expert on resolving IRS problems.  That help is available to you. Your job is to find the best people to help you, who are committed to efficiently and effectively solving your tax problems.

Beware of scammers and fraudulent providers!  Many of the well-known ‘tax solution providers’ you may have seen on TV have run into problems with the law for not providing the services they promise their clientele.  Don’t be lured in by over-the-top promises.  If the situation sounds too good to be true, it probably is.  Research your options, and select licensed tax professionals who have proven expertise in resolving tax issues like yours.

Filed Under: Tax Problem Resolution Blog Tagged With: , , , , ,

As the Federal Trade Commission and state Attorney Generals crack down on scam tax relief firms, where can consumers turn to for help with their IRS and state tax problems?

November 2, 2010 by

Just last month, the Federal Trade Commission shut down American Tax Relief, a Beverly Hills, California-based company that guaranteed it could settle tax debts for individuals for a fraction of what they owed. The state of California recently filed suit against Roni Deutch, AKA the “Tax Lady”, for a deceptive ad campaign that offers very little proof that the firm’s clients are getting any real-world benefit and overstates claims of winning against the IRS. Suit was also brought against J.K. Harris of Charleston, South Carolina by the state of Massachusetts in conjunction with the attorney generals from 17 other states for false and deceptive trade practices and nonperformance of work. A $1.5 million judgment against J.K. Harris was awarded to the state of Massachusetts and the other 17 states. Are these three isolated cases? Can you believe any firm that says they can help settle your tax debt for less than what you owe?

“These three firms are just the tip of the iceberg when it comes to companies claiming to be tax debt relief specialists who say they can settle your tax debt for pennies on the dollar,” said Matthew Previte, CPA, of Matthew J. Previte, CPA, PC and TaxProblemsRUs.com. “The sad part is that tax representation firms like these create a genuine distrust of any company who can genuinely help delinquent taxpayers with tax debt owed to the IRS or their state DOR.”

Previte, whose Natick, Mass.-based tax representation firm has specialized exclusively in representing individuals and businesses with IRS and state tax problems since 1997, says the real problem with companies like American Tax Relief, Roni Deutch, and J.K. Harris is that they make promises to clients that they can’t possibly deliver on. Says Previte, “The simple fact remains that approximately 95 percent or more of delinquent taxpayers do not qualify to settle their tax debts through an Offer in Compromise.”

So, what options do Americans who owe the IRS or their state DORs have besides representing themselves? Previte suggests there are plenty of reputable tax representation firms out there but consumers must do their due diligence before selecting a firm, such as:

• Avoid firms that guarantee a settlement – There are four main factors involved in settling your tax debts through an Offer in Compromise. The four factors are: (1) your current financial condition, (2) the tax law and IRS procedure, (3) your cooperation in providing the requested information needed to settle your case, and (4) the competency of the tax representation firm you have chosen. A tax representation firm that guarantees settlement is a major red flag since the first three of these factors are completely outside of their control and can change while in the process of trying to settle your tax debts causing an eligible Offer candidate to become ineligible. Meaning, you could start off as a great Offer candidate but later become ineligible due to changes in your financial condition, tax law and IRS procedures, or your failure to cooperate.
• Use a locally based tax representation firm staffed by licensed tax professionals (CPAs, Enrolled Agents (EAs), or tax attorneys) that practices exclusively in resolving IRS and state tax problems – Negotiating with the IRS or state DOR is a unique skill set unto itself. CPAs, EAs, and tax attorneys, although they perform various tax services such as tax return preparation and tax planning, are rarely well versed in the workings of the IRS or state DORs. It is rare if they handle one tax controversy case a year. You want to work with a licensed tax professional whose firm focuses exclusively in representing individuals and business in trouble with the IRS or state DORs, with a physical, brick-and-mortar location that’s within driving distance to you so you can schedule a face-to-face meeting before engaging them to represent you.
• Ask for references – If you don’t know anything about a particular tax representation firm, ask for references. Most will be more than happy to provide contact information for satisfied clients or conventional tax professionals (CPAs, EAs, tax attorneys) who have referred them clients. You can also research a prospective tax representation firm by going to your state’s society of CPAs web site, state bar association web site, or state society of Enrolled Agents web site. The overwhelming majority of licensed tax professionals working at any reputable tax firm will be members of one of these societies. Also, do a search with your local Better Business Bureau and state licensing board (CPAs, tax attorneys) or IRS Office of Professional Responsibility (EAs) as well as a general Google search. You would be amazed at what you can discover about your prospective tax representative online.
• Work with a smaller firm – When it comes to larger vs. smaller firms, you are most likely to get personal attention when working with a smaller firm. Larger firms tend to assign your case to junior staff and there’s a possibility that a senior staff member might not even review your case. For many larger firms, the focus can be more on selling and collecting retainers than getting actual results. With smaller firms like Matthew J. Previte, CPA PC, the principal reviews every case.

“It makes perfect sense that somebody carrying a huge tax debt would turn to one of these tax representation firms for help with their IRS or state tax problems. What you don’t want is an additional problem, like wasting precious dollars on a tax representation firm that makes promises it can’t keep,” said Previte. “By doing a little research before handing over a retainer fee, you prevent your hole from getting any deeper and can feel rest assured you’re taking a positive step forward in resolving your IRS and state tax problems.”

For more information on Matthew J. Previte CPA PC, please visit www.TaxProblemsRUs.com. To schedule a free confidential consultation, call 877-259-8200.

Filed Under: Tax Problem Resolution Blog Tagged With: , , , , , , , , , , , , , , , , , , ,

Why Wesley Snipes got caught. Celebrity or not, non-filers can run but they cannot hide from the IRS.

August 12, 2010 by

The simple answer as to why Wesley Snipes will soon begin serving a three-year sentence for tax evasion is that he didn’t file his tax returns for 1999 through 2004 and also tried to get a $7 million refund in 2006 on returns filed before he stopped filing in 1999. The broader answer is that in 2010, the IRS has more sophisticated resources, more personnel, and more incentive (nearly $345 billion owed to the federal government, which has a budget deficit in the trillions) than ever before to track down non-filers. In 2010 and beyond, if you fail to file your tax returns, chances are exceptional that you will get caught.

“What non-filers do not realize is the IRS will prepare a Substitute For Return (SFR) for you if you don’t file a tax return yourself. Only that SFR will not have the vast majority of the deductions you might be entitled to had you filed on your own,” said Matthew J. Previte, CPA, a local taxpayer advocate expert and owner of TaxProblemsRUs.com. “So, if you don’t file a tax return for several years like Mr. Snipes, the IRS has the technology to prepare an SFR for you and then will start burying you with severe penalties and interest based on that grossly inflated SFR assessment.”

Fortunately for non-filers, the IRS generally only looks back six years for unfiled tax returns. Yet without including all the deductions one might be entitled to, those SFR assessments can be grossly inflated due to that lack of deductions. The IRS can also utilize any number of resources to calculate income. For example:

  • Bank accounts – IRS can track non-filer accounts and review your deposit and spending histories.
  • Credit card spending – IRS can track overseas and domestic spending to prove income.
  • Audits of payees – Often times the people non-filers pay for goods and services are audited and that can alert the IRS to the payer’s non-filing.
  • IRS whistleblower programs – Does anybody else know you haven’t filed? An ex-wife or significant other? Perhaps a vindictive business associate? IRS whistle-blower programs raise the red flag and agents are more than happy to follow those leads.

So, with all the mechanisms available to the IRS to catch non-filers, why do people still not file?

“The reasons vary. Everything from bad advice from tax protestors and unscrupulous tax advisors to financial or health problems to even just plain old general neglect. Once one year is unfiled, fear and embarrassment most often perpetuate the problem, causing additional years to go unfiled. Some might even think if they don’t file, they won’t ever have to pay taxes. I’ve represented quite a few people who haven’t filed for 25 years or more,” said Previte. “The reality is, with the resources the IRS now has, non-filers will get caught and the punishment, if prosecuted and proven guilty like Mr. Snipes, is one year in prison per year you don’t file up to six years. If you’re lucky enough to avoid prosecution and jail time, the IRS will still bury you in taxes, penalties, and interest.”

Continues Previte, “The real irony about non-filers is that by filing their tax returns—even if they don’t have the money to pay the IRS—they have more options to resolve their tax debts than by not filing their tax returns.”

Some of those options include: 

  • Offer in Compromise program
  • Payment plan
  • Bankruptcy
  • Uncollectible status
  • Penalty Abatement
  • Lien Subordination
  • Innocent Spouse Relief

“These are just a few of the scenarios where having a qualified licensed tax professional represent you—instead of pulling your bed covers over your head and praying you don’t get caught–can literally save you thousands of dollars and dramatically reduce the likelihood of prison time,” said Previte. “At the very least, it can lessen the stress and anguish that come with having tax debt hanging over your head and your family’s.”

To schedule a free confidential consultation, call 877-259-8200 or, for more information, visit www.TaxProblemsRUs.com.

Filed Under: Tax Problem Resolution Blog Tagged With: , , , , , , , , , , , , , , , , , , ,

A taxing situation…With the new IRS, coming forward is the best option for late filers, non-filers, and delinquent payers.

August 2, 2010 by

By April 15, 2010, 84 percent of Americans filed their tax returns on time. That means 16 percent didn’t. That omission translates to a figure somewhere near $345 billion in taxes owed to the U.S. Treasury Department. With a budget deficit in the trillions and rising, the IRS is expected to increase its audits of both personal and business tax returns as well as pursue greater enforced collection action against individuals and businesses using levies, liens and seizures.  And that puts late filers, non-filers and delinquent payers on notice: Uncle Sam wants you now more than ever.

So, what’s a non-filer or delinquent payer to do? Many will delay dealing with the problem, literally hiding from the IRS. Yet according to Matthew J. Previte, CPA, a local taxpayer advocate expert and owner of TaxProblemsRUs.com, the IRS will get its money and then some from non-filers and delinquent payers in penalties and interest. The key is to be proactive and face the music.

“When we’re children, our parents said if we told the truth, things would be far easier on us than if they found out later. That may sound rather simplistic, but it’s the same with the IRS and your state’s DOR,” said Previte. “There are a number of options that you can work out with the IRS and your state to address your situation.”

Besides a lack of funds, pride, procrastination and a number of other reasons, most people are quite intimidated by the IRS and hesitant to come forward before the IRS comes to them. Since 1997, Previte’s Natick, Mass.-based tax firm has specialized solely in representing individuals and businesses with federal and state tax problems, including audits, non-filers, and delinquent payers.

“What most people do not realize, and that includes many CPAs and tax attorneys, is that dealing with the IRS and state DORs is a specialty unto itself,” said Previte. “We can provide our clients with resolutions to very sticky situations not only because we’re licensed tax professionals but because we have successfully worked with both the IRS and state tax agencies full-time on a daily basis for many years and we know how they work.”

So what are some of the options available to people who owe taxes? Some options include:

  • Offer in Compromise program – This little known program enables qualified taxpayers to negotiate a settlement for a fraction of what they owe. Who qualifies? Those taxpayers who can demonstrate an inability to pay their delinquent taxes in a short period of time.
  • Payment plan – Many people are able to pay their tax debts but just need a little time to pay it off. Negotiating payment terms you can live with is the key. Unfortunately, penalties and interest will continue to be charged on your outstanding balance as you pay the debt off. However, you may qualify to have the penalties removed or abated if you can show reasonable cause for filing late or paying late. For those unable to pay their tax debts in full over time, a Partial Pay Installment Agreement may be available. Under this option, payments are made until the collection statute expires. Any unpaid balance at the end of the collection statute expires and becomes legally uncollectable, leaving the taxpayer free from paying the remainder of any balance due.
  • Bankruptcy – Did you know that taxes in many cases can be discharged or wiped out in a bankruptcy. Many people, as well as attorneys, are not aware of this. For those who qualify, bankruptcy often times can be the solution to resolve their crushing tax problems. Proper pre-bankruptcy planning—for Chapter 7, Chapter 11, or Chapter 13—is key to determining if bankruptcy is or can be a viable solution.
  •  Uncollectible status – Every year the IRS puts many taxpayers into the “Uncollectible Status” category or classifies them “Currently Not Collectible” (CNC). What essentially this means is that the IRS will not proactively seek back taxes from a taxpayer that owes because of validated economic hardship. If their finances improve (as they will monitor) collection efforts will resume.
  • Penalty Abatement – The IRS charges penalties for filing late, paying late, underpaying your estimated tax payments if you’re self-employed, negligence if you make mistakes in preparing your tax return, etc. Many citizens could pay off their tax debts if it weren’t for penalties that double, triple, or quadruple their tax bill. The law does allow taxpayers who have “reasonable cause” to file for a Penalty Abatement.
  • Lien Subordination – Some taxpayers could pay off their tax debt if they could get a home equity loan. Unfortunately, these taxpayers can’t get home equity loans to pay off their old tax debt because the IRS has filed Federal Tax Liens against their property. A Lien Subordination allows the IRS to reduce its Lien priority and give your bank superior Lien priority protecting their loan in exchange for the proceeds from the loan. This way, the IRS gets the equity it had a Lien against and your bank is protected by their superior Lien.
  • Innocent Spouse Relief – When married couples sign a joint tax return, they both become liable for the taxes on that return. If at some future time the IRS audits that joint tax return and determines that additional taxes are due, both spouses become liable for the taxes. Unfortunately, these additional taxes are sometimes due to the misdeeds or fraud committed by one spouse. Sadly, the Innocent Spouse also gets saddled with the tax debt. Innocent Spouse Relief was designed to alleviate unjust situations where one spouse was clearly the victim of fraud perpetrated by their spouse or ex-spouse. If you qualify for Innocent Spouse Relief, you may not owe any tax.

“These are just a few of the scenarios where having a qualified licensed tax professional represent you can literally save you thousands of dollars and dramatically reduce the stress and anguish that comes with having tax debt hanging over your head—and your family’s for that matter,” said Previte.

For more information on TaxProblemsRUS.com, please visit www.TaxProblemsRUs.com. To schedule a free confidential consultation, call 877-259-8200.

Filed Under: Tax Problem Resolution Blog Tagged With: , , , , , , , , , , , , , , , , , , , , ,

Salesman Buys Time And Gets Some Breathing Room

January 4, 2010 by

Joe owed the IRS about $25,000 and was experiencing severe financial hardship. The IRS had levied his paycheck and left almost nothing for his family to live on. The tax bill seemed to keep growing despite payments from his wage levy. It was a never ending problem. Joe needed help fast! Our firm worked to obtain release of the levy so Joe could breathe again financially and have sufficient funds for his family to survive. Next, we worked to have him declared Uncollectable. This meant Joe wouldn’t have to make any payments on his old tax debt for the next year or two. With collection action suspended for a while, Joe had time to review all the available options to end his IRS problem for good.

Filed Under: Tax Problem Resolution Success Stories Tagged With: , , , , ,

Author Gets Short Reprieve From $170,000 Tax Problem

January 4, 2010 by

Chris was at wits end about his IRS problem. The stress and anxiety of having such a massive tax debt hanging over his head gnawed at him night and day causing him many sleepless nights. To make matters worse, the IRS was levying his paycheck leaving him and his family virtually destitute, unable to properly care for his severely ailing child. He just did not know what to do. Our firm negotiated removal of the levy on his paycheck as well as an affordable installment agreement that gave Chris the time he needed to review all the options available to resolve his tax problem.

Filed Under: Tax Problem Resolution Success Stories Tagged With: , , , , , , , , ,

Anguished 30 Year Retailer Avoids MA DOR Seizure And Bank Foreclosure

January 4, 2010 by

Henry was at the end of his rope. Mounting pressure from his bank to pay the delinquent balance of his business loan was beginning to become unbearable. He had already obtained two extensions on his loan. They were not going to wait much longer before foreclosing on his business. The MA Department of Revenue was also growing impatient and was about ready to seize his business in order to pay off nearly $50,000 in back taxes. Many corporate excise, sales, and withholding tax returns also needed to be filed. A loan application with a new lender to refinance and pay off his current bank loan was in danger of being rejected due to the state tax liens on his business and personal property. Without that new loan, he would be unable to pay off his current loan and avoid both a bank foreclosure and seizure by the MA DOR. Since he had also personally guaranteed the business loan and was held personally responsible by the MA DOR for the delinquent state taxes, he would lose all of his personal property as well. At age 54, he would have to start all over again and it would be difficult at best to obtain gainful employment after being out of the employment market for 30 years. He was at a loss as to what to do and called us for help. Our firm worked to submit any unfiled tax returns and then negotiated an installment agreement with the MA DOR for the delinquent taxes. This stabilized his tax situation and gave us time to work out the loan problem. Next, our firm negotiated with the MA DOR to obtain priority for the new lender’s mortgage over their state tax liens. As a result, the new loan was approved, the old loan was paid off, the MA DOR received $30,000 towards the delinquent taxes, and Henry’s 30 year old business was saved. The balance of nearly $20,000 in taxes would be paid off over the next 12 months ending his financial and emotional ordeal. Henry was given a new lease on life.

Filed Under: Tax Problem Resolution Success Stories Tagged With: , , , , , , , , , , , , , , , , ,

Frustrated Taxpayer Saves $30,000 Ending 10 Year IRS Ordeal

January 4, 2010 by

Peter was a silent partner who had invested in a business that had failed some ten years earlier. Due to an incompetent business partner who mismanaged the business, payroll taxes were left unpaid that Peter did not become aware of until many years later when the IRS came knocking at his door. Because the business was a general partnership, Peter was held personally responsible for the unpaid payroll taxes even though he had little involvement in the day to day operations of the business. Peter filed his own Offer In Compromise and thought his tax problem would soon be over. Unfortunately, the IRS thought otherwise. After patiently waiting for nearly a year, they rejected his Offer. Frustrated, he appealed their decision hoping to resolve his problem once and for all. Two years passed and the Offer still had not been accepted. After nearly three years of going it alone, Peter gave up, got smart, and called our firm for help. Our firm determined an Offer was a viable solution but would have to be renegotiated due to many technical errors in the drafting of his Offer. We determined that an abatement of the penalties assessed would achieve the same result in 9 to 21 months less time and for approximately the same cost to refile and renegotiate a new Offer. In about two months time, we negotiated a settlement agreement abating $30,000 in penalties and ending Peter’s problem for good. He was extremely happy it was all over and he could get on with his life.

Filed Under: Tax Problem Resolution Success Stories Tagged With: , , , , , , , , , ,

Time Heals Taxpayer’s Wounds

January 4, 2010 by

Stephen was suffering tremendous anxiety. His business had filed bankruptcy many years ago and both the IRS and MA DOR had assessed some unpaid business payroll taxes against him personally. He was stressed out and wanted the problem to just go away. Stephen also desperately wanted to buy a house and knew any tax problem would affect his ability to get a mortgage. Our firm investigated Stephen’s case and discovered that the statute of limitations on collection had already expired. This meant the IRS and MA DOR no longer had any legal ability to collect these old payroll taxes. Legally, he did not owe them. We informed Stephen he did not owe any taxes, worked to obtain release of the liens, and gave him the information he needed to clean up any problem with his credit report. He was greatly relieved and ecstatic his problem was finally over. Stephen was finally now able to obtain a mortgage and purchase that long awaited home.

Filed Under: Tax Problem Resolution Success Stories Tagged With: , , , , , , , , , , ,
« Previous Page
Next Page »