The Tax Factor was created to educate individuals and small-business owners about taxes. Let’s face it, nothing in life is guaranteed except death and taxes. Okay, maybe that sounded pretty depressing but the goal of this blog is to help you find the information to learn how to make taxes work for you. Taxes can be extremely complicated but knowing about deductions and credits can save you thousands of dollars per year.
The new inductee of the Tax Preparers' Hall of Shame goes to....... A IDIOT!
A Santa Barbara-based CPA who claimed on his Web site that he has appeared as a tax and financial expert on national television shows was convicted by a federal jury on charges that he underreported more than $1 million by pretending that his accounting income had been earned by his nonprofit foundation for providing “marital counseling.”
Steven Mark Pybrum, 61, who operated his accounting practice under the names of Pybrum & Company, LLP, and Family Business Center, was convicted in October of four counts of subscribing to false income tax returns. The jury deliberated for less than three hours before returning their verdict.
Okay, stop the presses! I'm almost at a lost of words. I know how tough it is to pass the CPA exam. I can't believe that a CPA could do something this fraudalent and stupid. Listen to me People, stop assuming that our Justice system is made of a bunch of clowns! Money is not worth going to jail or losing an professional license. Just be happy, free and broke like the rest of us. Welcome to the Tax Preparers' Hall of Shame!
Just in case you didn't know....
Enrolled agents (EAs) are America's Tax Experts. EAs are the only
federally licensed tax practitioners who specialize in taxation and also have unlimited
rights to represent taxpayers before the IRS.
Jeffrey A. Schneider, EA thought you may
want to know about this:
A Lawyer's Mistake Costs $1 million
Special rules allow an estate to pay its
taxes on an installment basis without penalty. However, the request for an
extension of time to pay those taxes must be filed when the estate tax return
is due, even if the amount of taxes cannot be determined. Not doing so can
result in penalties and interest. This was the situation in Est. of Thouron v.
U.S., 2012 PTC 291
(E.D. Pa. 11/7/12). The fact that the attorney hired by the estate to oversee
its tax compliance did not recognize this did not excuse the estate from the
non-filing. As a result, the estate was hit with penalties and interest of $1
million and its' claim that it had reasonable cause for not filing the
extension to pay because it relied on a professional was rejected.
Who is Jeffrey A. Schneider, EA?
Jeffrey A. Schneider, EA, CCPS
(Certified College Planning Specialist) ,CDFA (Certified Divorce Financial
Analyst) has been working in the field for well over 30 years, with clients
throughout the country. He currently serves as the President Elect of the
Florida Society of Enrolled Agents, (FSEA), is a Graduate Fellow of the
National Tax Practice Institute (NTPI) and is a Past President of the Palm
Beach Chapter of the Florida Society of Enrolled Agents. He also serves on the
Government Relations committee of the NAEA, National Association of Enrolled
Agents.
How can I contact Mr. Schneider?
Learn more about Mr. Schneider by
visiting his company's website at www.sfstaxacct.com.
How can I learn more about Enrolled Agents? I would recommend to visit the National Association of Enrolled Agents' (NAEA) website located at www.naea.org.
The new inductee of the Tax Preparers' Hall of Shame goes to.......Jeffrey B. Travis
CPA and tax preparer Jeffrey B. Travis has pleaded guilty to bank fraud involving a scheme to defraud US Bankcorp and five of his clients of more than $1.8 million.
Travis, who does business as Gross & Travis Ltd., and Travis and Associates Inc., with offices in Deerfield, Ill., admitted that he engaged in the fraud from at least May 2002 until December 2008. He prepared checks payable from his clients to vendors, retirement programs and tax authorities. But instead of delivering the funds to the payees intended by his clients, prosecutors claimed, he deposited hundreds of such checks without authority into accounts he controlled at US Bank, at times altering the checks to increase the amounts paid.
He then withdrew the money from those accounts and diverted the funds, gathering more than $1.8 million over the course of the scheme for his own use. Bank fraud carries a maximum penalty of 30 years in prison, a $1 million fine and mandatory restitution.
Travis, 51, is free on bond while awaiting sentencing, which is scheduled for Feb. 5, 2013. As a condition of his bond, Travis must notify his clients of the charge against him.
Welcome to the Tax Preparers' Hall of Shame! This type of case makes me sick to my stomach. I hope he gets the maximum sentence. In addition, I hope he shares a jail cell with someone that hates fraudalent accountants. I'm sorry to be so harsh but I hate when professionals take clients' trust for granted. Mr. Travis, you make me sick. That is all for now!
A federal judge sentenced self-styled doomsday prophet Ronald Weinland to three-and-a-half years in prison on November 14th for failing to pay taxes on income he earned while running a worldwide ministry from his Union home for more than a decade.
U.S. District Judge Danny Reeves also ordered the 63-year-old to pay $245,176 in back taxes and a $7,000 fine. Weinland was found guilty in June of five counts of income tax evasion for failing to pay taxes on $4.4 million in income from 2004 through 2007, according to court records.
"Weinland exploited ... members' devotion to him as the Prophet," Assistant U.S. Attorney Robert McBride wrote in a sentencing memorandum. "Weinland's scheme, lasting many years, perverted his role as a religious leader serving his church to a minister who used his church for financial gain and to escape his tax liabilities."
U.S. District Judge Danny Reeves had received nearly 200 letters from around the world asking for leniency with Weinland. Followers say he helped them through drug addictions or financial hardships.
Weinland's ministry is known as the Church of God — Preparing for the Kingdom of God (PKG). He has told followers that society is in its "final days" and predicts the return of Jesus Christ on May 19, 2013, though he had previously projected May 27, 2012, as the return.
The moral of the story is that even when the world ends, the IRS will get their money.
The new inductee of the Tax Preparers' Hall of Shame goes to a........LAWYER!
A federal court has permanently barred a Michigan lawyer, Tammy Daniels of Farmington Hills, from promoting an alleged tax fraud scheme. The civil injunction order, to which Daniels consented without admitting the allegations against her, was signed by Judge Paul D. Borman of the U.S. District Court for the Eastern District of Michigan. In August the court enjoined Daniels’s co-defendants, Damian and Holly Jackson, from preparing federal tax returns for others and promoting the scheme.
The government complaint in the civil injunction lawsuit alleged that the Jacksons and their business, Diamond & Associates Enterprises LLC, operated Diamond Tax Services and promoted a scheme involving the preparation of fraudulent federal income tax returns for customers seeking large tax refunds based on a frivolous tax-defier theory called “redemption” or “commercial redemption.” The suit alleged that tax returns prepared for at least 182 customers under the auspices of Diamond Tax Services sought over $29 million in fraudulent refunds by falsely reporting large amounts of tax withheld on bogus Internal Revenue Service (IRS) 1099 Forms.
Congrats goes to Tammy for being the first lawyer inducted! Let's hope that you paid off your law school student loan bills. Better yet, maybe the former 182 customers will feel sorry for you and help you out. I wouldn't bet on it!
The Internal Revenue Service issued a consumer alert about possible scams taking place in the wake of Hurricane Sandy.
Following major disasters, it’s common for scam artists to impersonate charities to get money or private information from well-intentioned taxpayers. Such fraudulent schemes may involve contact by telephone, social media, email or in-person solicitations.
The IRS cautions both hurricane victims and people wishing to make disaster-related charitable donations to avoid scam artists by following these tips:
To help disaster victims, donate to recognized charities.
Be wary of charities with names that are similar to familiar or nationally known organizations. Some phony charities use names or websites that sound or look like those of respected, legitimate organizations. The IRS website at IRS.gov has a search feature, Exempt Organizations Select Check, which allows people to find legitimate, qualified charities to which donations may be tax-deductible. Legitimate charities may also be found on the Federal Emergency Management Agency (FEMA) Web site at fema.gov.
Don’t give out personal financial information — such as Social Security numbers or credit card and bank account numbers and passwords — to anyone who solicits a contribution from you. Scam artists may use this information to steal your identity and money.
Don’t give or send cash. For security and tax record purposes, contribute by check or credit card or another way that provides documentation of the gift.
Call the IRS toll-free disaster assistance telephone number, 1-866-562-5227, if you are a hurricane victim with specific questions about tax relief or disaster related tax issues.
Scam artists can use a variety of tactics. Some scammers operating bogus charities may contact people by telephone to solicit money or financial information. They may even directly contact disaster victims and claim to be working for or on behalf of the IRS to help the victims file casualty loss claims and get tax refunds. They may attempt to get personal financial information or Social Security numbers that can be used to steal the victims’ identities or financial resources.
Bogus websites may solicit funds for disaster victims. Such fraudulent sites frequently mimic the sites of, or use names similar to, legitimate charities, or claim to be affiliated with legitimate charities, in order to persuade members of the public to send money or provide personal financial information that can be used to steal identities or financial resources. Additionally, scammers often send e-mail that steers the recipient to bogus websites that sound as though they are affiliated with legitimate charitable causes.
Taxpayers suspecting disaster-related frauds should visit IRS.gov and search for the keywords “Report Phishing.”
More information about tax scams and schemes may be found at IRS.gov using the keywords “scams and schemes.”
The IRS is now sending letters to preparers who are suspected of filing inaccurate EITC claims.
The letters pinpoint the primary issues identified on the returns, explain the consequences of filing inaccurate claims for the EITC, and advise preparers that the IRS will continue monitoring the types of EITC claims they file. In other words, the IRS is saying "Go Ahead, make my day Punk!"
To all fraudalent tax preparers: If you get caught, best believe I will include you on my Tax Preparers' Hall of Shame posts.
To my fellow taxpayers: The EITC credit is not worth the risk if you are not entitled to it. Don't mess around with the IRS!
Here is a word from the Goodfellas at the IRS and The Treasury Department:
As part of the administration’s efforts to bring all available resources to bear to support state and local partners impacted by Hurricane Sandy, the Treasury Department and the Internal Revenue Service announced special relief intended to support leave-based donation programs to aid victims who have suffered from the extraordinary destruction caused by Hurricane Sandy.
Under these programs, employees may donate their vacation, sick or personal leave in exchange for employer cash payments made to qualified tax-exempt organizations providing relief for the victims of Hurricane Sandy.
Employees can forgo leave in exchange for employer cash payments made before Jan. 1, 2014. Under this special relief, the donated leave will not be included in the income or wages of the employees. Employers will be permitted to deduct the amount of the cash payment. Details on this relief are in Notice 2012-69.
Employers planning to claim an expanded tax credit for hiring certain veterans should act soon, according to the IRS. Many businesses may qualify to receive thousands of dollars through the Work Opportunity Tax Credit, but only if the veteran begins work before the new year.
Here are six key facts about the WOTC as expanded by VOW to Hire Heroes Act of 2011.
1. Hiring Deadline: Employers may be able to claim the expanded WOTC for qualified veterans who begin work on or after Nov. 22, 2011 but before Jan. 1, 2013.
2. Maximum Credit: The maximum tax credit is $9,600 per worker for employers that operate for-profit businesses, or $6,240 per worker for tax-exempt organizations.
3. Credit Factors: The amount of credit will depend on a number of factors. Such factors include the length of the veteran’s unemployment before being hired, the number of hours the veteran works and the amount of the wages the veteran receives during the first-year of employment.
4. Disabled Veterans: Employers hiring veterans with service-related disabilities may be eligible for the maximum tax credit.
5. State Certification: Employers must file Form 8850, Pre-Screening Notice and Certification Request for the Work Opportunity Credit, with their state workforce agency. The form must be filed within 28 days after the qualified veteran starts work. For additional information about your SWA visit the U.S. Department of Labor’s WOTC website.
6. E-file: Some states accept Form 8850 electronically.
Visit the IRS.gov website and enter ‘WOTC’ in the search field for forms and more details about the expanded tax credit for hiring veterans.
I'm not a smoker and I rarely drink alcohol (at least now) but I do LOVE my soda. We have to die of something.
Mitt Romney wasn't the only loser in the elections. Voters in two California cities rejected measures that would have imposed the
nation's first penny-per-ounce taxes on businesses that sell sodas and other
sugary drinks in an effort to boost municipal revenue and fight obesity.
In El Monte, 76.8 percent of voters said no, while in Richmond, 66.9 percent
opposed the measure, according to final results from last Tuesday's election.
Calls to tax sugary drinks have gathered steam as more cities and states
struggle to close budget gaps and American waistlines continue to expand.
The American Beverage Association - which represents PepsiCo Inc, Coca-Cola
Inc, Dr Pepper Snapple Group Inc and other beverage companies - has spent
millions of dollars to beat back soda taxes around the country. The ABA has a
strong record of defeating soda tax efforts.
Even though I'm about 6'5 and 90 pounds, I do love my soda. Please don't make it more expensive. All soda drinkers are not obese. Taxes will not stop an obese person from drinking Pepsi.
The tax revolution will not be televised and that is how the IRS likes it.
A tax protester from north central Idaho has pleaded guilty in federal court to fraudulently receiving more than $85,000 from the Internal Revenue Service during an eight-year period.
Federal prosecutors say 71-year-old Gary Raymond Harvey of Peck entered the pleas after three days of trial. Harvey pleaded guilty to 10 counts of making a false claim for a refund from the IRS.
During the trial, prosecutors argued that Harvey created and filed tax returns for The Organic Assembly of Circle JB. Harvey claimed the organization was entitled to tax refunds ranging from $8,800 to $54,000 in the tax years of 2002 through 2010.
On the stand, Harvey admitted he was not entitled to the refunds and to filing false tax forms.
He is scheduled for sentencing on Jan. 14.
Good luck Mr. Harvey! I bet you didn't think you would spend your golden years locked up in prison. I'm pretty sure your grandchildren will return the gifts you brought them......NOT!!!
New inductee of the Tax Preparers' Hall of Shame goes to Antoinette Djonet
Antoinette Djonret, a former Premier Tax preparer, has pleaded guilty to filing false tax returns using stolen identities, according to reports. In August, a federal grand jury in Montgomery indicted Djonret and five others for conspiring to file false tax returns using stolen identities and various other charges. According to the Department of Justice, Djonret had earlier been charged with making false claims in a criminal complaint that was filed on February 22 and in an indictment filed on March 28. According to court documents, Djonret obtained stolen identities from state of Alabama databases, and she and her sister then filed false tax returns using the stolen identities and directed the false tax returns to prepaid debit cards. In total, the defendants filed over 800 false tax returns and requested over $1.2 million in tax refunds.
Congrats goes out to Djonret. Thanks for making tax preparers look bad. Was it worth the money.....nope!
New inductee of the Tax Preparers' Hall of Shame goes to Cynthia Carter.
A federal court has permanently barred tax preparer Cynthia Carter from preparing federal tax returns for others, according to the Justice Department. The civil injunction order, to which Carter consented without admitting the allegations against her, alleged that Carter, who does business as Cynthia's Tax Service, prepared returns for customers that reported false income and expenses and falsely claimed several tax credits, including the First-time Homebuyer Credit. The complaint alleged that Carter claimed the credit on her customers' returns even though the customers had not bought new homes and were ineligible for the credit, and that the IRS paid more than $900,000 to Carter's customers. The complaint also alleged that she claimed fabricated employee business expense deductions and EICs on her customers' returns. According to the complaint, the IRS estimates that Carter's fraudulent tax preparation could have resulted in $4.25 million or more in lost revenue to the government.
Congrats goes out to Ms. Carter. Thank you for making tax prepares look bad! I hope you enjoy your ban.
In the aftermath of Hurricane Sandy, the Internal Revenue Service announced additional tax relief to affected individuals and businesses.
Following recent disaster declarations for individual assistance issued by the Federal Emergency Management Agency, the IRS announced today that affected taxpayers in Connecticut, New Jersey and New York will receive tax relief. Other locations may be added in coming days based on additional damage assessments by FEMA.
The tax relief postpones various tax filing and payment deadlines that occurred starting in late October. As a result, affected individuals and businesses will have until Feb. 1, 2013 to file these returns and pay any taxes due. This includes the fourth quarter individual estimated tax payment, normally due Jan. 15, 2013. It also includes payroll and excise tax returns and accompanying payments for the third and fourth quarters, normally due on Oct. 31, 2012 and Jan. 31, 2013 respectively. It also applies to tax-exempt organizations required to file Form 990 series returns with an original or extended deadline falling during this period.
The IRS will abate any interest, late-payment or late-filing penalty that would otherwise apply. The IRS automatically provides this relief to any taxpayer located in the disaster area. Taxpayers need not contact the IRS to get this relief.
Beyond the relief provided by law to taxpayers in the FEMA-designated counties, the IRS will work with any taxpayer who resides outside the disaster area but whose books, records or tax professional are located in the areas affected by Hurricane Sandy. All workers assisting the relief activities in the covered disaster areas who are affiliated with a recognized government or philanthropic organization are eligible for relief. Taxpayers who live outside of the impacted area and think they may qualify for this relief need to contact the IRS at 866-562-5227.
In addition, the IRS is waiving failure-to-deposit penalties for federal payroll and excise tax deposits normally due on or after the disaster area start date and before Nov. 26, if the deposits are made by Nov. 26, 2012. Details on available relief can be found on the disaster relief page on IRS.gov.
The tax relief is part of a coordinated federal response to the damage caused by the hurricane and is based on local damage assessments by FEMA. For information on disaster recovery, individuals should visit disasterassistance.gov.
The IRS wants to assure taxpayers, businesses and tax preparers that it is working aggressively to monitor the situation and provide additional relief as needed.
So far, IRS filing and payment relief applies to the following localities:
In Connecticut (starting Oct. 27): Fairfield, Middlesex, New Haven, and New London Counties and the Mashantucket Pequot Tribal Nation and Mohegan Tribal Nation located within New London County;
In New Jersey (starting Oct. 26): Atlantic, Bergen, Cape May, Essex, Hudson, Middlesex, Monmouth, Ocean, Somerset and Union;
In New York (starting Oct. 27): Bronx, Kings, Nassau, New York, Queens, Richmond, Rockland, Suffolk and Westchester.
The Internal Revenue Service announced it is granting taxpayers and tax preparers affected by Hurricane Sandy until Nov. 7 to file returns and accompanying payments normally due today.
The relief applies to taxpayers and tax preparers in an area affected by Hurricane Sandy or otherwise impacted by the storm that hit the Mid-Atlantic and Northeastern United States this week.
This relief primarily applies to businesses whose payroll and excise tax returns and payments are normally due today. No action is required by the taxpayer; this relief is automatic. Regular federal tax deposits are due according to current rules. However, the IRS notes that if taxpayers or tax practitioners receive a penalty notice for this period, they can contact the IRS at the number on the notice to request penalty abatement due to reasonable cause on account of the storm.
IRS expects to grant additional filing and payment relief as qualifying disaster declarations are issued by the Federal Emergency Management Agency (FEMA). Details will be posted on the Tax Relief in Disaster Situations page on IRS.gov.
