Payroll taxes: Trust a little, verify a lot. Sad stories all around in Binghampton, New York, after an executive at a payroll service provider admitted stealing tax deposits, rather than remitting them to the IRS and the state. From WBNG.Com:
“It was almost like being kicked in the stomach because I had already paid the taxes and we were told we had to pay them again,” said President of Silo Restaurant Gary Kurz.
Kurz was another victim. He says he had to borrow money to pay the IRS a second time, in addition to cutting hours for employees, and working hard to save on electricity bills.
All of this in an effort to to fill a sudden $24,000 loss for the restaurant, a loss that’s still affecting his business.
Outsourcing payroll processing can be a good business decision, but it leaves a business horribly vulnerable if the processor has a thief on board. That’s why even businesses that outsource their payroll should enroll in the Electronic Federal Tax Payment System. EFTPS lets you go online to make sure that the payroll taxes you are sending to your payroll service provider are truly getting deposited on time. It might seem like extra work, but it’s a lot easier than paying your payroll taxes twice.
Being a landlord is so much easier without tenants. But it has its downsides, as a Connecticut attorney named Joseph Colbert has learned. From the Wilton Patch:
According to court documents and statements made in court, Colbert filed false federal tax returns in 2006, 2007 and 2008. In each of the returns, Colbert falsely claimed that he had sustained thousands of dollars in losses on a rental property in New Jersey when, in fact, the New Jersey property was not a rental property, but was exclusively for his personal use. In total, Colbert underpaid his federal tax obligation by more than $133,000.
Folks, this sort of thing isn’t hard for the IRS find. If you have a Schedule E property that year after year shows little or no rental income and lots of expenses, the IRS computers are likely to notice. That’s especially true if you find a way deduct those losses, which will normally be non-deductible “passive” losses absent other passive income.
Of course, there are times in real life when commercial properties go a long time without being rented. Residential rental properties, though, aren’t likely to sit empty for three years in most markets.
Bad tax ideas of the northlands. An Alaska couple apparently didn’t take their tax evasion conviction well. From the Alaska Dispatch:
According to documents filed in court Thursday, Lonnie and Karen Vernon, of the so-called “241” militia trial, are planning to enter guilty pleas to some of the eight counts against them, the Fairbanks Daily News-Miner reports.
The couple faces charges related to tax evasion, weapons possession and conspiracy to commit murder.
Independent of the “241” militia trial, the Vernons are charged as a couple for allegedly plotting to kill an Internal Revenue Service agent and U.S. District Judge Ralph Beistline following the outcome of their tax evasion trial. Judge Beistline was allegedly targeted because he ruled against the Salcha, Alaska, couple.
Maybe this has something to do with long winters. A few years ago Minnesotan Robert Beale got in trouble for similar reasons.
I’ll be the last person to discount the seriousness of tax convictions. Nothing disrupts personal plans like a stretch in the federal can. Yet, according to the story, this couple owed about $180,000 — good for maybe a three year stretch before you can resume your previously-scheduled programming. Conspiring to kill a federal judge will extend that time away considerably, without any chance of making the original sentence go away. Poor move, north or south.
William McBride, Sweden’s Corporate Rate is 13 Points Lower than Ours, and Going Lower (Tax Policy Blog)
Jack Townsend, Prominent Neurosurgeon Convicted for Offshore Accounts. A Milwaukee case.
Janet Novack, Romney’s Taxes: It’s The Carried Interest, Stupid
Jim Maule, Using Taxes to Measure Generosity
Christopher Bergin, Taxing With the Stars
Robert D. Flach has a new Buzz on.
Isn’t that what Hell is for anyway? Pennsylvania Court Gives No Relief To Investor In Tax Shelter From Hell (Peter Reilly)