Tax Roundup, 3/8/2013: IRS tackles ex-Bear Zorich. And: higher taxes, less compliance.

March 8th, 2013 by Joe Kristan

1991PacificIllegal procedure.  Former Chicago Bear Chris Zorich has been flagged.  CBS Chicago reports:

Zorich, 43, was charged Thursday with four misdemeanor counts of failing to file federal income tax returns, for the years 2006 through 2009, according to the U.S. Attorney’s office. During that time, he allegedly had an income of more than $1 million.

Federal prosecutors said Zorich was cooperating with the investigation and has agreed to plead guilty.

His lawyer says that he owes no more than $70,000 after withholding on the non-filed years is applied.

I wonder why he was charged.  While it’s a bad idea, it’s not extremely rare for people to just get behind on filing their returns.  It doesn’t usually lead to criminal charges.  Much of his income for the years at issue was W-2 income, so it wasn’t as though the IRS would miss him.

Perhaps he did something to annoy an examiner enough to call in the Criminal Division.  Maybe it’s because he is an attorney [update: he apparently never passed the bar exam].   Or maybe he’s just unlucky to be famous-enough for the IRS to use his celebrity to frighten the rest of us into getting our returns done. (Via Reason 24/7)

Update: This Chicago Tribune report suggests that self-dealing with his charitable foundation may have been a factor.

 

In other tax crime news:

Jack Townsend: Article on Deterrence Through Criminal Enforcement and Defining Tax Shelters

Miami Vice: Two Miami Officers Accused Of Tax Refund Fraud (CBS Miami)

William Perez, Tips for Preparing Form 1040-EZ

Janet Novack, IRS Yanks Criminal Amnesty Deal From Taxpayers With Secret Bank Leumi Accounts. If the IRS turns on taxpayers who turned themselves in under an amnesty, not many folks will participate in another one.

Russ Fox,  When the IRS Changes the Rules Midstream in a Legal Matter…

 

J.D. Tuccile,  As Government Grasps For Taxes, Brace for an Unwinnable War Against You (Reason.com).  It’s a long-form essay on the way getting all sorts of social services from the government doesn’t make people happy to pay their taxes.  This is interesting:

 

20130308-1

 

Those who think tax increases alone can solve our ongoing fiscal disaster are just kidding themselves.

 

Paul Neiffer,  What Are W2 Wages for DPAD?  You have to have paid W-2 wages to use the Section 199 deduction.  But they don’t all work:

These wages cannot include wages paid to your children under age 18 (if a  sole proprietor farmer) and commodity wages.  However, wages paid in cash to spouses and children over age 17 are allowed as part of these wages. 

If you are a schedule F farmer with no employees, the W-2 requirement makes the Section 199 deduction worthless.

 

Jim Maule,  Selecting a Tax Return Preparer.  All sound advice, including this:

Seventh, ask the tax professional about data security. Where and how is paper data stored while in the hands of the preparer? Where is the digital data stored? What precautions are in place to minimize the chances of a third party breaking into the office or the digital servers and obtaining information? If the individual hands over paper records without keeping copies, which is an unwise move, what happens if the tax professional’s office burns down?

Something to think about.

 

Nanette Byrnes, State defections impact U.S. interstate tax compact (Tax Break)

TaxGrrrl,  Taxes From A To Z (2013): D Is For Disaster Relief

William McBride,  Latest IRS Data Shows Taxable Returns Remain Below 1997 Levels (Tax Policy Blog).  The income tax burden falls on fewer and fewer returns.

Howard Gleckman,  Build America Bonds, the Medicaid Expansion, and Trust Between the States and the Feds

Tony Nitti,  Congress Looks To The Wealthy To Bail Out Social Security.  But the rich guy isn’t buying.

 

If you ever wonder why California is the Titanic of state governments, you might want to read Kay Bell’s latest, Tax on email suggested as way to help fund U.S. Postal Service:

Berkeley City Councilman Gordon Wozniak has tossed out the idea of an email tax to help save snail mail.

The financial straits of the U.S. Postal Service became an issue for Berkeley lawmakers when the paper mail delivery system proposed closing that northern California city’s downtown post office and selling the building.

It won’t happen, but a state where somebody who thinks it could happen can be elected to public office is pretty much doomed.

 

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