Taxable Talk

In the United States, when you're accused of tax evasion you have lots of legal recourse, including fighting the charges within the IRS' appeals process, and then Tax Court. However, in Argentina it appears things work differently.

Just two days before Argentina's match in the World Cup, Buenos Aires Province tax authorities confiscated a taxpayers' $2000 plasma television. According to Juan Manuel Prada, a provincial tax official, quoted in All Headline News, "We've taken the plasma as a guarantee against the debt he owes."

The unlucky taxpayer will have to either find a sports bar or perhaps his old television will suffice.

Civil rights attorney Stephen Yagman has been indicted on tax evasion, fraud, and money laundering charges. The charges stem from Yagman not paying all the tax he owed in the mid-1990s and accruing significant interest charges and penalties. Additionally, he is also charged with not paying payroll taxes owed by his law firm, Yagman & Yagman P.C. (Thanks to the TaxProf Blog for the hat tip.)

Also potentially in trouble is Grover Norquist, head of Americans for Tax Reform. A story in the Washington Post indicates that disgraced lobbyist Jack Abramoff sent cash for lobbying through Americans for Tax Reform. The article states, "as the money passed through, Norquist's organization kept a small cut, e-mails show."

While I'm not an attorney, this certainly sounds like a potential conspiracy charge. As Roth Tax Updates notes, "ATR and Mr. Norquist may be vulnerable to some serious problems with the IRS." I think that's an understatement. (Thanks to Roth Tax Updates for the hat tip.)

News Story:

Yagman Indictment (Los Angeles Times)

There's going to be a week when I won't be able to find a tax cheat. That will be the week I'm on vacation....

We start in Tucson, Arizona, where a California man took elderly Tucson residents as clients of his tax preparation business. He had an interesting method of making money. He promised his clients very large refunds. He got them, too, by exaggerating deductions. The refunds went into his bank account, rather than the clients. The IRS wasn't amused. He's looking at up to ten years in prison and a fine of up to $250,000. (News story: here)

We move on to Durham, North Carolina. Here, Steven Edwards was convicted of fraud and tax evasion and sentenced to 12 1/2 years in jail, and must make restitution of $4.4 million. He collected millions of dollars of insurance premiums from clients...but didn't buy the insurance. He must also forfeit the nearly $4 million he received from the scheme and pay a fine of $400,000.

Tax crime doesn't pay....

We previously reported the sad case of William Campbell. The ex-Mayor of Atlanta was sentenced today to 2 1/2 years in prison for tax evasion.

Campbell plans on appealing the sentence.

News Story: MSNBC

I have a number of clients who receive income from outside of the United States. I've advised my clients that the US Tax Code is quite clear—income from all sources, legal or illegal, from within the United States or from outside the United States, is generally taxable. Anyone in a high profile occupation, such as an athlete or a contestant on a game show (eg Richard Hatch) should be aware of this.

Well, at least one surfer perhaps thought that the surfing lifestyle exempted him from paying taxes on winnings earned in Fiji, South Africa, Brazil and other foreign locales. Until the IRS found out. Sonny Garcia, perhaps the best ever Hawaiian surfer (he retired last year), now faces up to three years in jail and a fine of up to $100,000 after pleading guilty today to tax evasion. Garcia, born Vincent Sennan Garcia III, has won numerous surfing titles as this article notes.

The moral? Even if the surf's up, dude, you gotta pay your taxes.

No, I'm not talking about the Impossible Missions Force. I'm speaking about...well, to be honest, a lot of nothing. But several charlatans have been promoting an "IMF Decoding Service." Indeed, if you do a search on Google or some other search engine you'll find several of these listed.

The Deptartment of Justice and the IRS are not amused. Last week one of the promoters of this scheme found himself in court in Cincinnati, and now has a permanent injunction against promoting the IMF Decoding Service and the FOIA Generator. You don't need the Freedom of Information Act in order to obtain records from the IRS; you can request a transcript of your tax returns or even photocopies of your old returns just by filling out the appropriate forms.

A sucker is born every day. Hopefully you realize that you must pay your taxes. If you don't, there are several federal institutions just waiting for you. And for the promoters of these frauds.

For those who don't remember, we had a long list of participants to choose from for the 2005 Tax Offender of the Year. Our lucky winner, Sharon Lee Caulder, formerly of New Orleans, recently of Oakland, and soon to be housed by the Bureau of Prisons, was sentenced on Thursday to 30 months in prison. Ms. Caulder earned $1.7 million (primarily from sales of her book, Mark of Voodoo, while simultaneously filing for bankruptcy. Oops.

Hat Tip: Roth Tax Updates