Minnesota Man Tries to Convince the IRS “I’m Not Dead Yet”

It took a U.S. Senator, Amy Klobuchar from Minnesota to finally reverse the false declaration that Adam Ronning, 33, was deceased after he tried for 29 years.

The error started when Ronning was 4 years old, and his mother received a letter stating that she could no longer receive child support because somehow the IRS declared her son was deceased.  The IRS blamed the error on a computer glitch but never rectified the situation.

Ronning states, “They’ve never been able to prove that I’m dead.  It’s always me proving that I’m still here.”

After Ronning filed his 2009 tax returns, the IRS gave him only half of his refund because they showed him as deceased.  Ronning continued to file his taxes every year but never received the refund due him and spent hours on the phone with the IRS, on hold, trying to speak to supervisors only to be told it was a problem with the Social Security office.

After finally receiving a letter from the Department of Treasury, Ronning is hoping to receive an estimated amount of $20,000 that the IRS owes him in tax refunds.

A “60 Minutes” investigation found that approximately 9,000 Americans  are erroneously declared dead each year.

Businessman Who Stole Money from NFL Players Gets Sacked by the IRS

A businessman from High Point, NC, Michael Rowan, who provided financial services to professional athletes, including NFL players was sentenced to 65 months in prison for filing a false 2011 tax return and wire fraud.

Rowan would contact prospective NFL players in college offering them financial and wealth management services.  Upon being drafted by the NFL, Rowan would offer his services for an annual fee of $15,000 to $50,000 and have them sign agreements that allowed him access to their bank accounts.

Instead of only making transactions that his clients authorized, Rowan transferred more than $2.9 million into his own personal accounts without the player’s knowledge.  From 2009 to 2013, Rowan failed to report the embezzled funds on his federal tax returns.  This caused a net loss of more than $479,000 to the IRS.

In addition to jail time, Rowan will have one year supervised release and ordered to pay restitution to his victims in the amount of $2,960,295 and $479,352 to the IRS.

IRS Collection Calls Now May be Real

For years the IRS has warned taxpayers about the tax scam calls in which scammers pretend to be from the IRS and threaten the taxpayer with wage garnishment or imprisonment unless they pay that day by getting prepaid cards or depositing cash into bogus bank accounts.

But the IRS made major revisions to the IRS code on “collections” and starting on April 19, 2017, real third party debt collectors can call you to collect taxes owing.

The IRS has awarded contracts to 4 agencies currently:  Conserve, Pioneer, Performant and CBE Group.  This information is public so the scammers might try to impersonate employees of these companies.

Before you receive any calls, the IRS will send you a letter and so will the debt collection agency.  But scammers will also be sending bogus letters.

So how do you protect yourself?  If you receive a call, ask for all of the information you can from the person calling regarding their name, company information and phone number then hang up and do your own research. If the phone number matches the real company then it’s legitimate.  Also keep in mind that the tax collectors cannot threaten jail time, garnish wages or collect payment over the phone.

More than 5,500 people have already been victims of the scams for a loss of over $36 million dollars. If you receive one of these calls call us – WE CAN HELP!

IRS Employee Turned Thief is Indicted

An employee at the IRS office in Atlanta, GA, Stephanie Parker was indicted on charges of wire fraud and aggravated identity theft.

Parker has access to taxpayer’s personal information, including social security numbers and dates of birth.  It’s alleged that between September 2012 and April 2013, she used this information to file fraudulent tax returns for refunds.  Parker had the refunds deposited into a nominee bank account where she would then use the money to purchase money orders.

If convicted, she faces a maximum sentence of 20 years for each count of wire fraud and 2 years for identity theft, plus restitution and monetary penalties.

‘Soup Nazi’ Tells the IRS, “No Taxes for You!”

Robert Bertrand of NY, CFO of the Soupman, Inc, which holds the licenses to the name and recipes of the “Soup Nazi” made famous by the TV show “Seinfeld”, was indicted on 20 counts of failure to pay Medicare, Social Security, and federal income taxes.

Prosecutors allege that between 2010 and 2014, Bertrand paid his employees cash on the side and did not collect or pay the required withholding taxes. In addition, Bertrand compensated certain employees large stock awards which were never reported to the IRS. The approximate total amount of unreported cash and stock compensation was $2,850,967, which translates to a loss to the US of $593,971. Bertrand’s employees also face a loss of any future social security and Medicare payments.

It’s also alleged that Bertrand received a warning from an external auditor in 2012 that these payments should be reported to the IRS but chose to ignore it. The indictment suggests that he cannot claim ignorance. If convicted, Bertrand could face five years in prison plus monetary fines and restitution. A trial date is pending.


Tax Court Rules TurboTax Not to Blame for Deduction Errors

A ruling handed down by the U.S. Tax Court on May 11, 2017, indicated that the taxpayer in question could not blame their tax preparation software for improper deductions for alimony and interest. Barry Leonard Bulakites could be required to pay the IRS thousands of dollars in penalties and unpaid taxes as a result of errors he made when filing his taxes in 2011 and 2012.

In 2007, Bulakites took out a loan for $500,000 secured by his private residence to pay a judgment against himself and his employer. Unfortunately, the financial crisis of 2008 occurred soon after and created an unfavorable environment for repaying this loan. During this same time period, Bulakites and his wife divorced. Alimony was set at $2,000 per month; however, Bulakites asserted that he increased this amount to $5,000 by making an oral agreement with his ex-wife to that effect.

In 2011, Bulakites used TurboTax to file his income taxes. He attempted to claim over $185,000 in deductions for expenses. Additionally, over the two-year period encompassing 2011 and 2012, Bulakites claimed $130,000 in deductions for alimony paid to his ex-wife. The IRS argued that these deductions could not be substantiated and should be disallowed. Bulakites attempted to blame the TurboTax program, arguing that it had lured him into errors that he might not otherwise have made. The Tax Court did not agree with this argument and found for the IRS on both the penalties and the outstanding taxes owed by Bulakites, who represented himself during these proceedings.

Working with an experienced tax attorney can help you manage your issues with the IRS more effectively. The Law Offices of Daniel M. Silvershein can provide you with the expert representation needed to deal with your situation assertively and to protect your rights when dealing with the IRS. We will work with you to ensure that your deductions are supported by documentation and to provide you with the best options when dealing with tax problem. Call us today at 212-387-7880 to set up your free initial consultation with an expert tax attorney. We look forward to the opportunity to help you protect your assets and resolve your IRS issues quickly.

Soldier Can’t Discharge Military Debt in Bankruptcy, Court Rules

A recent case in North Carolina Eastern Bankruptcy Court clarified some issues regarding the ability of certain debts to be discharged in Chapter 7 bankruptcy proceedings. Ryan v. Defense Finance and Accounting Services outlines the case of a soldier who received an honorable discharge from the U.S. Army after re-enlisting for six years and accepting a re-enlistment bonus. Upon his involuntary discharge, the soldier filed for bankruptcy and attempted to include the unearned portion of his bonus in those proceedings.

In August 2012, Kyle Ryan re-enlisted in the U.S. Army for a six-year tour of duty. Ryan agreed at that time to repay the unearned portion of his $18,200 re-enlistment bonus if he could not complete six years of service under his agreement with the U.S. Army. After serving just 15 months of his six-year obligation, Ryan tested positive for hydrocodone on August 21, 2013. He claimed to have taken one of his wife’s painkillers to treat pain caused by an unreported neck injury.

Ryan was honorably discharged from the U.S. Army in March 2014. A portion of his unearned bonus was withheld from his final paycheck from the Army; the remainder was billed to Ryan directly. On May 12, 2015, Ryan filed for Chapter 7 bankruptcy and sought to have the remaining unearned bonus debt, a sum of $9,667.21, included in these proceedings. He specifically addressed the issue of the debt associated with the unearned bonus by filing a Proof of Claim regarding this debt on August 7, 2015. The bankruptcy was discharged under the provisions of Chapter 7 on November 9, 2015.

The Defense Finance and Accounting Service (DFAS) filed an answer to the request for relief included in Ryan’s bankruptcy on October 7, 2015, asserting that the DFAS claim is exempt from discharge in Chapter 7 bankruptcies and providing a full accounting of the exact amount of the debt still owed. On January 28, 2016, DFAS filed a Motion for Summary Judgment in the amount of $9,765.14 against Ryan, who responded by filing an Objection to Defendant’s Motion for Summary Judgment. During the resulting court proceedings, the DFAS lowered its claim to $8,989.64. This still represented a severe burden for Ryan financially.

Ryan argued that the entire amount should be discharged in the bankruptcy and that, if not discharged, he should owe only $3,815.31 to DFAS. He further asserted that his separation from the U.S. Army was not voluntary and that, consequently, he was not responsible for the debt incurred. The court considered the evidence presented and reached its decision on March 31, 2017.

Unfortunately for Ryan, not all debts are dischargeable in bankruptcy. The U.S. Bankruptcy Court for the Eastern District of North Carolina, Raleigh Division, found that Ryan was required to repay the unearned bonus because he filed bankruptcy less than five years after the date that this debt was incurred. Had Ryan waited until five years after the bonus contract had been terminated, he might have been able to discharge this debt along with others during his bankruptcy proceedings.

Ryan’s case highlights the need to consult with a qualified bankruptcy attorney before beginning any legal actions in the state of New York. Bankruptcy is a complex process that requires an in-depth knowledge of the law. By working with a qualified and experienced NYC bankruptcy attorney, you can protect yourself against unwanted legal complications while enjoying the best possible outcome for your case.

Insurance Salesman Convicted of Tax Fraud for not Filing Accurate Tax Returns Since 1996

Terry DiMartino of Newington, CT was convicted of one count of corruptly interfering with the due administration of the Internal Revenue laws, two counts of filing false tax returns and five counts of willfully failing to file tax returns.

During DiMartion’s trial, evidence showed that although he was an insurance salesman, and earned millions of dollars in insurance commissions, he did not file accurate tax returns or pay the taxes owed. In 2007, DiMartino filed three false returns, including one requesting a fraudulent refund of over $14 million. He also set up nominee entities to conceal and divert his insurance commissions and hide his assets from the IRS.

It was shown at trial that DiMartino had not filed an accurate tax return since the 1996 tax year.

Sentencing has been set for July 2017.  DiMartino faces a maximum sentence of three years in prison for the charge of obstructing the IRS, three years in prison for each charge of filing false returns and one year for each count of failing to file his returns.  He also faces monetary penalties.

Interior Designer Redecorates his Tax Returns

The owner of a Kirkland, WA, interior design firm, Daniel Nix was indicted in April 2017 on thirteen counts of tax evasion, eleven counts of providing fictitious financial obligation and one count of corrupt interference with the administration of the Internal Revenue code.

As alleged in the indictment, as early as 1998 and from 2000 to 2007, Nix refused to pay his income tax which totaled more than $340,000, using shell companies to hide his income, filed false bankruptcy claims and filed false claims against the government.

For the tax years 2010-2013, Nix again attempted to hide his income to avoid paying taxes.  Nix sent 11 fake money orders exceeding $1 million to the IRS in 2013 to make it appear as if he was paying his tax obligations.

Tax evasion carries a maximum prison sentence of up to 5 years and a $250,000 fine.  For presenting fictitious financial statements Nix can be sentenced to up to 25 years in prison and an additional fine of $250,000. Attempts to interfere with the administration of the tax code is punishable by up to 3 years in prison and a $5,000 fine.

Spa Owners Caught Massaging Their Income

Four family members from Queens, NY were indicted on charges of failing to pay more than $1.5 million in taxes. Steve Chon and his brothers Daniel Chon, Victor Chon and his daughter Stephanie Chon were charged with two counts of grand larceny in the second degree, eight counts of criminal tax fraud in the second degree and one count of criminal tax fraud in the third degree.

From the tax years 2010 to 2013, it’s alleged that the four failed to report millions in income to avoid paying the $1.5 million due in taxes.

If convicted, the four could spend anywhere between five and fifteen years in prison.