Unorthodox Attorney’s Method: Don’t Pay the IRS

Posted on March 22, 2005 by Russ

The San Francisco Chronicle reports that J. Tony Serra, a criminal defense attorney, has been charged for “at least the third time” with failure to pay federal income taxes. He’s expected to plead guilty to at least one of the charges.

Posted in Tax Fraud | 6 Comments

Un-Amnesty

Posted on March 16, 2005 by Russ

California currently has a tax amnesty program. It has a little carrot and a BIG stick. If you haven’t filed (or are otherwise delinquent) for a tax year before 2003, you can file an amnesty application by March 31st; you then must file and pay your taxes by May 31st (June 30, 2006 if you file an installment agreement). Full details of the amnesty program are available on the FTB’s website. The FTB projected that the program would generate $550 million for California.

It won’t.

To date, according to this article in the San Francisco Business Times the state has received $25 million. While there will be quite a few applications received in the last two of the program (and perhaps another $100 – $200 million received by May 31st), the program doesn’t make sense for most taxpayers who haven’t paid. Why haven’t they paid? Because they don’t have money! And you expect them to come up with the money in two months?!?

When the amnesty program was announced last year, our local chapter of Enrolled Agents were unenthusiastic and thought it wouldn’t meet its’ goal. It appears we were right.

Posted in California | Comments Off on Un-Amnesty

If We Can’t Win, Let’s Change the Rules

Posted on March 15, 2005 by Russ

On the Federal level, the Democrats in the Senate want to filibuster President Bush’s judicial nominees. Whether the Democrats in the Senate like it (or not), there’s nothing in the Constitution saying that you can filibuster appointments. The Democrats are trying to change the rules.

Here in California, after property taxes went crazy in the 1970s, Proposition 13 was passed. That limited property tax increases and mandated a 2/3 vote for new taxes.

The education establishment, unhappy that many of their tax increases aren’t being approved by the voters, now wants to change the rule so that it takes a 55% vote for passage. The next time you’re approached by anyone from the education establishment, ask them:

– Does money spent correlate with improved learning for our children? [No, according to numerous studies.]
– Why do the school districts that spend the most money have some of the worst results?
– Why are you against standardized tests that mandate our children meet basic education levels before being advanced to the next grade?

Remember, it’s our money being spent–that’s what tax dollars are.

Posted in Legislation | Comments Off on If We Can’t Win, Let’s Change the Rules

Richard Hatch: CBS Should Have Withheld Taxes

Posted on March 13, 2005 by Russ

When we last left Richard Hatch, the $1 million winner from Survivor who didn’t pay his income taxes, he withdrew his plea of guilty. He now claims, in an interview with AP, that CBS should have withheld his taxes because under California law he should have been classified as an employee.

Ignoring, for the moment, the merits of his claim, ignorance of withholding does not alleviate one’s responsiblity for paying income tax. Penalties, however, could be eliminated depending on the truth of Mr. Hatch’s claim.

What will add to the confusion during trial (if this goes to trial) is that Mr. Hatch is a resident of Rhode Island. CBS (now part of Viacom) is headquartered outside of California. Survivor was filmed in the South Pacific. Frankly, Mr. Hatch is probably going to be forking over the ~$300,000 the government says he owes, along with interest. After all, there were only 300 million witnesses to his winning the $1 million…

Posted in Tax Evasion | Tagged | 6 Comments

The Disneyland Impact

Posted on March 9, 2005 by Russ

According to the Daily News, Disneyland brings $3.6 billion annually to the local economy. This story details the positive impact of the theme park: $1.62 billion to Orange County (45% of the impact). That mouse brings in a lot of money.

Posted in California | Comments Off on The Disneyland Impact

Hatch Backs Away From Plea

Posted on March 9, 2005 by Russ

While I was on the East Coast, Richard Hatch backed off from pleading guilty to tax fraud. Hatch, who won $1 million on Survivor, allegedly did not declare his prize on his tax return. The government has dismissed the charges, and will present all possible charges to a grand jury.

We’ll keep you informed.

Posted in Tax Evasion | Tagged | Comments Off on Hatch Backs Away From Plea

Just a “Little” Evasion ($200 Million)

Posted on March 1, 2005 by Russ

As you will undoubtedly read (or have read) in your local newspaper, Walter Anderson has been arrested for allegedly not paying $200 million in Federal and District of Columbia income taxes.

Roth & Company’s tax updates (now renamed www.taxupdateblog.com) has two good posts (see here and here) on Mr. Anderson’s “anarcho-capitalist” views. I can just imagine saying, “Honey, I misplaced that $126 million….”


Posted in Tax Evasion | Tagged | Comments Off on Just a “Little” Evasion ($200 Million)

Cheat $3.7 Million, Pay $1.4 Million

Posted on March 1, 2005 by Russ

Adult videos can be a lucrative business. Michael S. Morrison of Atlanta owned some adult video stores. In 2000 & 2001, he reported on his tax return lower “booth rentals” because of competition. The IRS felt otherwise. As the Atlanta Business Chronicle reports, the government investigation found that Mr. Morrison had “sticky fingers” and skimmed the money. He also underreported other income.

The result? 3 years, 10 months in prison; 3 years supervised release; community service; and pay the IRS $1.4 million.

Posted in Tax Evasion | Tagged | Comments Off on Cheat $3.7 Million, Pay $1.4 Million

California Warned (Again) on Factory Jobs

Posted on March 1, 2005 by Russ

California received yet another warning about its’ dreadful business climate. According to this story in the Sacramento Bee, 1.3 million of California’s 1.5 million factory jobs are in danger of being lost. According to the Bay Area Economic Forum, most of these jobs would move overseas. The report blames the usual suspects: high tort costs, high energy costs, and high taxes.

Is anyone in Sacramento (e.g. the legislature) listening?

Posted in California | Comments Off on California Warned (Again) on Factory Jobs

Traveling

Posted on March 1, 2005 by Russ

This week I’m traveling to Philadelphia and nearby environs so blogging will be close to nonexistent. I’ll be back with updates next week.

Posted in Taxable Talk | Comments Off on Traveling