Chris’ Corner
It’s a hot mess
Have you seen the headlines about the IRS? They are asking you to be patient with them because they are under-staffed and over-worked!
Why? Until recently, the IRS literally shut down their collection activities during the pandemic. And during these last few years a lot of senior IRS employees decided to retire. Now the IRS is trying to quickly ramp up to pre-pandemic levels of service.
Where is the IRS now? They are attempting to become transparent. But you may not like what you are being told. We’re being told to expect delayed return processing, delayed refunds, and lack of responses from call centers. Oh, and they want you to know that information provided on-line at their website to help you prepare your own tax return may be incorrect.
What else do we have to look forward to the next several months? Well, the IRS is quickly ramping up their collection activities. Of course, these are being handled by new employees. (Houston…we have a problem.)
What should you do this tax season? If you are not using a CPA to prepare your tax return, find one. Call and ask if they are taking new clients. Get in their system. On the IRS tax collection side, be proactive. To clear the backlog, the IRS is settling outstanding tax liabilities at a higher rate than normal. This means there is an opportunity to settle that debt now if you are a non-filer or owe a lot of back taxes. And we can help.
If you or some you know has needs a CPA or has a tax problem, please call us!
Click here to go directly to FRESH START TAX SOLUTIONS website: 
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Manager Shows Herself Compassion;
Funnels Company’s Money to Her Accounts
The business manager for Compassion at Home, Alicia Raynor, was sentenced to 18 months in prison, and was ordered to pay $799,625.27 in restitution for wire fraud and filing a false tax return. Raynor funneled payments from the company into an account she opened in her name with Intuit, a payroll and payment processing service. She disguised the payments to make it appear as if they were made to Bank of America, Capital One or Compassion at Home employees. In less than a year she stole $238,871.58 from the company.
From 2013 to 2016 Raynor received $1,214,444 in payments from her employer and did not report the income on her tax returns, causing the IRS a loss of $370,005.
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Taxation Chief Does a Questionable Job Upholding the Law
George Martinez, a Bureau Chief of the Questionable Refund Unit at the New Mexico Taxation and Revenue Department, pleaded guilty to wire fraud, aggravated identity theft and money laundering.
Martinez copied tax returns that had already been processed and altered information such as social security numbers and bank account numbers. He then changed the income and withholding amounts in order to increase the refund amounts. In some instances he created new tax returns using taxpayers’ information he had access to.
The fraud began in 2011 and continued through 2018, and generated $689,797 in refunds that were deposited into Martinez’ personal bank accounts.
Martinez faces a maximum of 32 years in prison, along with restitution.
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Crooked Tax Preparer Goes Nationwide
To Defraud Thousands of Customers
Fessum Ogbazion was found guilty of fraud and tax crimes in connection with a national tax return preparation company he owned and managed.
Ogbazion founded Instant Tax Service, and was so successful he franchised the companies through ITS Financial LLC. It was through ITS where he began advertising tax refund anticipation loans through a third party lender, despite the fact that ITS had no such lender to fund the loans. Ogbazion used the false ads to entice customers to apply for a loan they never qualified for, and then used the loan applications to prepare and file income tax returns, often without the customer’s permission. Between 2006 and 2011 ITS defrauded thousands and collected more than 70 million dollars in fees.
During 2009 and 2010 he failed to pay 1.3 million dollars in payroll taxes he collected from ITS employees. He evaded IRS attempts to collect these funds by directing business revenue to nominee accounts, placing assets in the names of nominee entities and making false statements to an IRS revenue officer.
Ogbazion was sentenced to one year and one day in prison and ordered to pay $933,708 in restitution to the United States.
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Tax Withholdings Withheld Illegally from IRS
Mark Carlson pleaded guilty to filing a false tax return and failing to pay over payroll taxes, including Medicare and social security taxes, that were withheld from employee paychecks.
Carlson managed the finances for the Leo Byrnes Trust and was the business manager for two companies, American Pride Insulation and Atlantic Abatement Construction. He failed to pay over the payroll taxes, totaling $1,086,816.50, from all three entities from 2015 to 2018.
In 2019 Carlson filed a tax return using a W2 form he had created that claimed $8,946 had been withheld in employment taxes on his behalf and paid to the IRS, when no money had been paid to the IRS.
Carlson faces a sentence of up to five years in prison and a fine of up to $10,000.
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Did You Know?
Delaware has an 8.7% flat tax on corporations, likely the reason about half of all publicly traded companies in the U.S. consider it home. A single address in Wilmington, 1209 North Orange St., is the legal address of more than 300,000 companies.
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