Taxable Talk

Ray Wersching had an illustrious career in the NFL. After starting his career with the San Diego Chargers, he moved on to the San Francisco 49ers, and played in Super Bowls XVI and XIX. Wersching holds the career Super Bowl record for most field goals (5). After retiring from the NFL, Wersching started an insurance company, Ray Wersching Insurance Agency, in Redwood City, CA, south of San Francisco on the Peninsula.

On Wednesday, Wersching was indicted for allegedly misappropriating premiums that should have been paid to Farmers Insurance Group, and of evading taxes on $3.6 million of corporate income in 1999 and 2000. Last year, the company's co-owner, Mary Ann Locke, was indicted on similar charges.

Wersching's attorney told the San Francisco Chronicle, "The money that was stolen went to Mary Ann Locke. Ray got none of it...She spent $8 million on a lavish lifestyle and gambling in Nevada."

Wersching, who is also a CPA, is due in court on Monday.

News Stories: San Francisco Chronicle, San Jose Mercury

Renato Medina is the principal owner of Lucky Chances, a Bay Area poker club located in Colma. According to the US Department of Justice and the IRS, he allegedly caused Lucky Chance's to deduct $2.6 million in bogus business expenses, causing the government to lose out on nearly $1 million in tax revenues. Medina was indicted on conspiracy and tax evasion charges. Also indicted were his neice and nephew. All have been released on bond pending the trial.

Medina faces three counts of tax evasion, five counts of making false tax returns, and one count of conspiracy. If convicted on all counts, he could face 35 years in prison and fines of well more than $1 million.

Medina is the principal owner of Lucky Group, the holding company that owns Lucky Chances. The Lucky Group's website states, "The Lucky Group of Companies is committed to maintaining the highest ethical standards and demonstrating the highest personal standards of integrity at all levels, as well as a commitment to truth and fair dealing and complying with the spirit and letter of all laws and regulations wherever they conduct its businesses." Mr. Medina's attorney, Cris Arguedas, told the San Francisco Chronicle, "This is a simple tax case...[and Mr. Medina] asserts his innocence."

In a related story, two State Senate candidates are returning donations from Medina.

News Story: San Francisco Chronicle

Out of the news and into my email inbox this afternoon comes word that a Bell Buckle, TN woman and a Florida couple have been charged with preparing tax returns with phony deductions, causing unwarrented refunds to taxpayers in the millions of dollars, and thousands of dollars in fees to the alleged perpetrators. If convicted on various counts, the three could be facing five years inprisonment and fines of up to $250,000.

The IRS happen to send out list of frivolous arguments yesterday. The TaxProf Blog has a nice list of them here. Joe Kristan of Roth Tax Updates presents an interesting list of real and phony frivolous arguments here. A more complete list of frivolous arguments can be found here.

Of course, when you have to debate whether a frivolous argument is real or phony (a phony frivolous argument?!?)....

News Story: Shelbyville Times-Gazette

William Campbell, the former mayor of Atlanta, was convicted yesterday of three counts of tax evasion but acquitted on the more serious RICO (Racketeer Influenced and Corrupt Organizations Act) charges.

The trial ended a seven-year investigation of corruption in Atlanta city government. Ten people were convicted through the investigation. Campbell's attorney noted, "We knew there were some technical violations of the tax code. They're serious, but we're going to be O.K." Campbell faces up to nine years in jail and $300,000 in fines but will likely face jail time of 2-3 years.

News Story: New York Times