Some taxpayers will resort to shady tactics to shake the taxman. Recently 47-year-old Colorado resident Edward Sobczewski was arrested by agents with the Treasury Inspector General for Tax Administration for allegedly bribing an IRS official. The purported offer: Colorado Rockies seasons tickets in exchange for changing his 2006 personal income tax audit.
“The message is simple: Don’t even think about bribing an IRS agent with Rockies’ tickets or anything else,” said U.S. Attorney Troy Eid in a statement. Desperation for those caught on the wrong end of an IRS investigation is manifesting in many ways as the government’s tax-collecting agency is becoming more and more aggressive.
Take Jerrold E. Richard, for example. He was a successful restaurateur. When he decided to sell the Big Easy Seafood and Steakhouse in Bethany Beach, Delaware, an interested buyer came to visit. Apparently trying to persuade the would-be buyer about how lucrative the restaurant was, Richard admitted he’d been skimming from the business and underreporting his income tax returns. Turns out that prospective buyer was — oops! — an undercover IRS agent. The businessman’s off-the-cuff remark resulted in government search warrants for his business and house.
Although Richard reported a loss of $616 for tax year 2004, the IRS discovered, his actual taxable income was $112,114. Richard faces up to three years in prison and a $250,000 fine.
Richards is just one of thousands. Another example are Californians Dominic Chang and Marjan Pousti.
Chang ran a successful auto-repair shop. For one business, he had two bank accounts. Those with invoices went into one account, whose contents were reported to the IRS. Cash deals and no-invoice transactions went into another, off-the-books account the government wasn’t supposed to know about. IRS found out about that secret second account.
Pousti, who ran the books for her family’s cosmetic surgery business in San Diego County concealed cash payments by converting them to money orders and then using those to pay personal expenses, including the house note. Don’t make a stupid choice… call a tax professional.
Michael Rozbruch is a Certified Tax Resolution Specialist, a member of the American Society of IRS Problem Solvers and a Maryland CPA. Call 818-774-1813 to obtain a free subscription to his newsletter titled The IRS Times & Inquirer.