Posts Tagged ‘JoeKristan’

Thank You, Joe Kristan

Saturday, May 27th, 2017

Most mornings I begin my day by reading a few tax blogs. This has helped me learn what’s happening in the tax world. After all, there’s one of me so the more sets of eyes, the better. Joe Kristan had been publishing Roth Tax Updates for a long time–since 2002. Joe’s firm is merging into Eide Bailly in June, so, “As we begin a new adventure, I will need to spend extra time working to make our transition successful, so it’s time to bring the Tax Update to a close.”

Best of luck Joe, and perhaps there’s an Eide Bailly Tax Updates in the future. (I can always hope.)

There Is No Tax Fairy (Yet Again)

Sunday, April 27th, 2014

Joe Kristan has the story of two CPAs who told clients that there is a wonderful Tax Fairy, that mythical creature who turns income into deductions or credits through alchemy and magic. Unfortunately, the Tax Fairy doesn’t exist, and clients who used these CPAs had total tax adjustments (audit changes) of over $3.5 million. This particular scheme revolved around Section 419 (“Voluntary Employee Beneficiary Association” plans). The Tax Fairy worked…until the IRS audited the results.

As usual, if it sounds too good to be true, it probably is.

Another Nominee for Tax Offender of the Year

Sunday, December 15th, 2013

It’s getting to be that time of the year: Nominations are due for the Tax Offender of the Year. Remember, to be considered for this award the offender must do more than just cheat on his taxes. It has to be special; it really needs to be a Bozo-like action or actions.

Via Joe Kristan comes a clear “winner” of a nominee: Phillip Ballard of Fort Worth, Texas was convicted of attempted murder for hire. Mr. Ballard, who is 72, is looking at 20 years at ClubFed. It’s why Mr. Ballard committed this crime that gets him his nomination:

While awaiting trial for tax evasion, Ballard approached a fellow inmate in September 2012, according to the criminal complaint.

Ballard said he believed U.S. District Judge John McBryde would sentence him to more than 20 years in prison; he wanted the judge killed so the case would be transferred to another judge.

And it only took the jury less than an hour to convict him.

Mr. Ballard’s tax preparation career ended in 2008; he followed the Irwin Schiff method of tax preparation (returns with all zeroes). At least one individual who followed Mr. Ballard’s advice is probably wishing he hadn’t. Richard Tilford was sentenced in 2012 to one year at ClubFed and had to make restitution of over $453,000 to the IRS. Mr. Tilford filed returns noting he had income but zeroed all that income out on his returns. As noted in the DOJ press release,

Each of the tax returns, according to the factual resume, was accompanied by a letter acknowledging that Tilford earned money during the relevant year, but denying that the earnings were income in the “constitutional sense.”

A hint for anyone who wants to try this at home: The only thing it will garner you is a nomination for Tax Offender of the Year. As for Mr. Ballard, he’s yet another worthy nominee for the 2013 Tax Offender of the Year award.

No Instant Replay Here

Sunday, November 10th, 2013

There’s an etiquette involved in sending emails: You don’t use all capital letters in most cases. The same is true when you write; it’s poor form. Yet when Judge Timothy Black wrote about ITS Financial, LLC (aka Instant Tax Service) he began his decision to permanently enjoin ITS from operating or being involved in tax preparation in any way with a paragraph in all caps…and in bold. Less you think he didn’t have reason to do so, well:

The evidence at trial established that Ogbazion and his Defendant companies:

Clandestinely trained and encouraged ITS franchisees to prepare and file tax returns prematurely with paycheck stubs that omitted and understated income, and inevitably resulted in the submission of false federal tax returns;

Defrauded ITS customers, who are largely low-income, by marketing false and fraudulent loan products to lure customers into franchisees’ tax preparation offices;

Defrauded ITS customers by requiring franchisees to charge phony fees, as well as exorbitant fees, of which Defendants kept an average of 18%;

Forged customers’ signatures on loan checks and used those forged checks to operate Defendants’ businesses;

Willfully failed to pay their own employment taxes, and then lied about assets in connection with the collection of those taxes, hiding money in a secret bank account, defrauding the United States and third party creditors;

Lied on government forms, and encouraged franchisees to lie on government forms, including lying on IRS applications for EFINs and on IRS Forms 8879;

Obstructed government agents and materially assisted franchisees in circumventing IRS law enforcement efforts involving the suspension of EFINs;

Told franchisees to lie to government agents in connection with IRS compliance visits; and

Violated the terms of the Order of Preliminary Injunction issued by this Court.

Joe Kristan has more on why we’ve likely seen the end of Instant Tax Service.

While I Was Out…

Thursday, August 8th, 2013

Ten days off in a row should have been enough…but it wasn’t. In any case, here are some of the posts that the tax blogosphere had that might be of interest:

Jason Dinesen asked, “What’s the upside of preparer regulation for Enrolled Agents?” While at the National Association of Enrolled Agents annual meeting, I asked that question, too. The NAEA officials all swore it was a wonderful thing. The only thing I can deduce is that the RTRP program should lead to more Enrolled Agents. That said, I remain opposed to the RTRP program.

National Public Radio (NPR) noted that statistics show that the IRS targeting was worse for conservative groups than liberal groups. Republicans asked Democrats to bring just one liberal or progressive group to hearings that was impacted. To date, none have been found.

Jason Dinesen’s client who went through a nearly 28-month identity theft nightmare with the IRS finally received her tax refund.

The IRS released a draft of Form 8960. What’s that? It’s the new ObamaCare 3.8% Investment Tax. It does appear that the IRS smartly didn’t link the form to Other Income (as I previously noted, gambling income is not subject to this tax). As Paul Neiffer reported, there are only 33 lines to calculate this tax. As I tell my friends, I have lifetime employment…for all the wrong reasons.

Joe Kristan has a report on an interesting court decision: Can suing be your trade or business? The court held that it could be.

Meanwhile, the Tax Court held that a business owner whose business made a whopping $877 must take a salary of nearly $31,000! Joe Kristan has more on what is a very raw deal for the taxpayer. I do agree with Joe’s conclusion: “When advancing and withdrawing funds from an S corporation, be sure to generate the appropriate prissy paperwork.” If you have a loan, make it look like a loan: Charge interest and record it! It’s possible that with good paperwork the owner wouldn’t have received such a ridiculous result.

A Penny Saved, Lots of Dollars Lost

Tuesday, September 11th, 2012

The old cliche is, “A penny saved, a penny earned.” In real life, though, sometimes when you save some pennies you lose lots and lots of dollars. So was the case for two taxpayers who filed a case in Tax Court.

The Tax Court has very strict deadlines. You typically have 90 days from the date on a Notice of Deficiency to file a Tax Court case. Marcius and Andrea Scaggs wanted to file a Tax Court case. They were apparently procrastinators, so they waited to the last allowed day to file the case. They also didn’t trudge to the Post Office; had they done so and mailed their petition using certified mail, return receipt requested, they would have been fine.

Instead, they went to FedEx. There’s nothing wrong with using FedEx, but you need to use the right service. They used “Express Saver Third Business Day.” That is not an approved delivery method so the petition was considered filed on the date of receipt, not the date it was sent. So their case was thrown out. Had they spent a few more dollars and used FedEx Priority Overnight, FedEx Standard Overnight, or even FedEx Two-Day, they would have been fine.

As an aside, many post offices now have Automated Postal Centers. These will time stamp a letter as of the current date and time, so you can timely file on the last day after the post office has closed! I’ve had a couple of clients use this for filing tax returns at the very last minute, and they were successful.

For the Scaggses, they must now pay the tax and file a lawsuit in either Federal District Court or the Federal Court of Claims. And that’s far more expensive.

Joe Kristan and the TaxProf have more.

ObamaCare Unconstitutional; Impact on Taxes?

Tuesday, February 1st, 2011

As most of you know, a second federal court judge has ruled the Health Care Law that passed last year is unconstitutional. Judge Rodger Vinson didn’t just rule that the mandate that health insurance must be bought is stricken; rather, he struck down the entire law. While the Obama Administration is publicly stating the law will continue to be enforced (and, in theory, either Judge Vinson or the 11th Circuit Court of Appeals could issue a stay to Judge Vinson’s ruling), as of now the law is void.

What next for the tanning tax? Or the numerous other tax provisions in the legislation that impact individuals? How about the business tax provisions?

I’m not an attorney, but the Volokh Conspiracy has some good posts up on this, though they aren’t really looking at the tax consequences (but do look at the constitutional issues in depth). As I was writing this, I noticed that Joe Kristan was asking the same questions.

My best guess is that the 11th Circuit will stay the decision until they review it. And it sure looks like this case is bound for the Supreme Court (perhaps in 2012 or 2013).

So if you’re a tanning salon should you stop collecting the 10% excise tax on tanning? I’ll probably have an answer in a couple of weeks but that answer could easily change between now and 2013.

3% or 48%?

Tuesday, September 7th, 2010

What will the impact be of the elimination of the Bush Tax Cuts? Proponents of eliminating the cuts note that only 3% of small business owners will be impacted. Well, that’s true…but it’s anything but the whole story.

As Joe Kristan has noted, the real number is the amount of income that will be pushed up into higher tax brackets, and it’s a lot more than 3%. It’s 48%, as noted in a recent Wall Street Journal op-ed.

Joe has plenty more to say about it (here and here).

Still Time for NOLs

Wednesday, August 25th, 2010

There’s still time to claim your (up to) five-year carryback on a Net Operating Loss (NOL). You have until October 15th to claim this for losses from either 2008 or 2009. Joe Kristan has more.

Straight From the Pages of a Cheap Novel

Sunday, May 23rd, 2010

Take one man, his wife, and his mistress, throw in a 30,000 square foot mansion, add a dose of federal charges (bank and wire fraud, tax conspiracy, money laundering, witness tampering, and obstruction of justice) and you get the latest novel from author—actually, you get the trial of Thomas Parenteau in Columbus, Ohio. The Department of Justice has obtained guilty pleas from 11 other individuals in this case; however, Mr. Parenteau is defending himself.

So far we’ve found out that the mistress, Pamela McCarty, is the mother of Mr. Parenteau’s two daughters; that all three lived in the same mansion; phony jobs and phony paychecks; allegations of $18 million in fraudulent loans…and the trial should last a couple more weeks.

Joe Kristan has more.