by Michael Wiener, E.A.
After a long and grueling tax season this year, I thought I would put forth a few interesting tax related news stories for your reading pleasure.
- Joe Armstrong, the Democratic state Representative of Tennessee, plans to plead not guilty to indictment charges of fraud and tax evasion. According to the indictment, Armstrong began a scheme back in 2006 to take advantage of the state’s increase in cigarette tax. Armstrong allegedly bought tax stamps at the 20 cent rate and then sold them after the tax was increased to 62 cents per pack. According to the lawsuit, Armstrong failed to report more than $318,000 of his income from the scheme.
- Michael Gardner of California had 80 percent of his state tax refund garnished because of approximately $200 in outstanding parking tickets. What is the problem with this? The parking tickets were for a car that he does not own and were from a city that he had never visited. When Gardner contacted the California State Franchise Tax Board, he was told that it would take up to four months to receive his money, though fortunately it only took about two weeks. The Tax Board was supposed to send a notice to Gardner at least 30 days before they seized his refund so that he could contest the seizure, but the Board says it was sent to the wrong address. According to the Tax Board, they have only garnished the wrong person’s wages four times within the last two years.
- The Internal Revenue Service has signed a $2.2 million contract with the Quinn Emanuel law firm in Washington D.C,
who is paid $1,000 per hour to perform an audit of Microsoft. Senator Orrin Hatch, Senate Finance Committee chairman,
wrote a letter to the IRS commissioner relating his concerns about the contract. Hatch stated that he had three main concerns about the contract: he thought the contract violated laws that prohibit the IRS from sharing taxpayer information with third-parties, that the contract removes taxpayer protections by permitting private contractors to perform inherently governmental functions, and that the contract calls the IRS’s use of limited resources into question. Shortly after the law firm was hired, the Treasury Department and IRS issued a temporary regulation, without a notice and comment period, that allows private contractors to question witnesses under oath, and gives them access to confidential taxpayer information.
- Angela Miller and Lee Lynwood were charged and sentenced by the US District Court in Macon, Georgia for a conspiracy to defraud the United States. From January 2008 to March 2010 the women operated a tax preparation business
where they inflated clients’ federal returns by falsifying business income and loss amounts and claiming deductions and credits that the clients were not eligible to receive. When the Internal Revenue Service tried to shut down the company’s ability to electronically file tax returns in 2008 by revoking their Electronic Filing Number (EFIN), the women had an acquaintance apply for another EFIN and then opened a new business and a new bank account under the acquaintance’s name. The women pleaded guilty to the charges, and were each sentenced to 12 months and 1 day in prison, followed by one year of supervised release, and were ordered to pay $44,214.62 in restitution.
In following issues, we will look forward to the 2015 tax season, where I will give more information about different tax rules and regulations.
If you should have a topic that you would like me to discuss or if you should have a question, please feel free to call 239.403.4410 or e-mail me at email@example.com.
An enrolled agent, licensed by the US Department
of the Treasury to represent taxpayers before the IRS
for audits, collections and appeals. To attain the
enrolled agent designation, candidates must demonstrate
expertise in taxation, fulfill continuing education
credits and adhere to a stringent code of ethics