Taxable Talk

And that's not a typo in the title.

The telephone excise tax refund got a few bozo tax preparers thinking (an oxymoron, of course), "If the government is going to hand out this money [usually $30 - $60] with little documentation, why don't I prepare a return asking for just a bit more? They'll never catch me!"

And it's likely that many, many preparers did just that. But you can definitely take things a bit too far, and that's exactly what Herbert Jana, Aurora Perez, and Nancy Munoz are accused of doing.

Eric Martinez, Special Agent in charge of the Dallas field office of IRS Criminal Investigation, stated, "The allegations in this indictment are that this scheme in the Dallas/Fort Worth metroplex claimed more than $1.6 million in fraudulent telephone excise tax refunds, making it one of the most egregious telephone excise tax refund fraud schemes during this filing season."

As for our alleged phone tax crooks being bozos, well, they were also a bit unlucky. As we've mentioned, Jackson Hewitt, the #2 tax preparation firm in the United States, is under a major investigation. So what did our alleged bozos name their firm? Jackson Hubbert.

If convicted, the defendants are looking at lengthy stays at ClubFed due to the size of the alleged fraud.

Hat Tip: Roth Tax Updates

News Story Here

You remember Wesley Snipes, actor and alleged tax cheat? Mr. Snipes is accused of amended a tax return to get back all of his taxes because he bought into the idea that only foreign income is taxable. (Hint: All income is taxable, unless Congress says otherwise.)

Snipes, who will soon be tried in Ocala, Florida, has now played the race card. As the Smoking Gun noted, his Caucasian co-conspirators haven't been charged (yet). So he's asking for his case to be dismissed. Snipes also alleges that he is the victim; that he succumbed to bad tax advice. On that, he's right. However, by following the bad advice, and then by allegedly failing to withdraw his amended return claiming a $7.4 million tax refund, he stepped into the line of fire and has been charged with making a false claim for refund.

There's only one huge problem with this motion: the promoters of Snipes scheme are in prison, as Joe Kristan noted this morning. If you go to the link, you'll see that Joe quotes Quatloos.com and notes that Eddie Kahn, one of the promoters, "...represents the Hee-Haw contingent of the tax protestor movement...Eddie caters to the dumbest of the dumb, and his theories for not paying taxes are thus the dumbest of the dumb. Eddie has claimed variously that he can’t find the Form 1040, that the IRS was not created by Congress and apparently just materialized out of the blue, that the IRS doesn’t have the power to collect taxes, that the United States doesn’t actually include the states...." Let's just say that if you bring up any of those arguments, you will be laughed out of court. Of course, every so often this kind of defense works....

It should be a fun summer for tax bloggers if Mr. Snipes continues down this path (but it may be a very long summer for Mr. Snipes).

I'm traveling quite a bit this month. Currently, I'm enjoying the heat of Las Vegas. The individuals mentioned below are suffering a different kind of heat.

I've written about Talal Chahine and the La Shish resturant before. His wife was just sentence for her part in a tax evasion scheme. Chahine, who has already been charged with four counts of tax evasion, was charged with a fifth count of tax evasion this past week. Chahine has apparently fled to Lebanon. If he returns and is convicted he could spend many years at ClubFed.

Yet another individual has found out that a sham trust leads to tax evasion. Karl Olsen of Easton, Connecticut, was sentenced to two years probation, a fine of $10,000 and must make restitution to the IRS. Olsen admitted when he pleaded guilty that he evaded over $51,000 in tax through a sham trust and making false deductions. Olsen, though, avoids ClubFed.

I use aloe vera, a skin moisturizer. Inltalo Fiore owned Aloe Vera of California, an S Corporation. Aloe Vera sold aloe vera powder. However, his corporation underreported its income. If you're not caught, it's a great way to save on taxes. Unfortunately for Fiore, he did get caught. And given that he has already made restitution of $2.9 million to the IRS, we're not talking about just a little bit of aloe vera here. Fiore faces up to 12 years in prison and a fine of up to $1 million when sentenced after he pleaded guilty to the fraud.

I'll be getting out of the head midweek when I return to Irvine from Las Vegas. These individuals could be dealing with the heat for some time.