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Yearly Archives: 2012

Owe The IRS? TaxMasters Bankruptcy Shows Why Not To Get Help From TV Pitchmen !

March 21, 2012

If you’ve got problems paying the Internal Revenue Service, don’t look for help from the ads on late night cable television. That’s one of the lessons from an SEC filing Friday by TaxMasters Inc., disclosing the publicly-traded company will file for voluntary bankruptcy.

As ABC reported last April, even after Houston-based TaxMasters had been accused of deceptive business practices by the attorneys general of Texas and Minnesota, it continued to buy millions of advertising on CNN, FoxNews and other cable channels.

The ads featured Patrick Cox, the red-bearded TaxMasters CEO, assuring potential clients that his staff of tax pros, including former IRS agents, had helped “many good people just like you.”

Moreover, this is just the latest bankruptcy by a “tax resolution” service that advertised heavily—and made allegedly exaggerated claims–on cable TV. JK Harris & Co., a South Carolina-based firm which once operated hundreds of locations in dozens of states, filed for bankruptcy last October after being sued by both states and unhappy customers.

Last December, it ceased operations and went into liquidation, leaving 5,400 active clients in the lurch. Harris’ former clients, including those who won legal judgments against it, aren’t likely to see any money from the liquidation.

If you have a Tax Problem, call us at Marini & Associates, PA  888 882 9243, we are experiance Tax Attorneys!

Read more at: Tax Times blog

Supreme Court Denies Review of Employment Tax Case

March 21, 2012

The Supreme Court denied review March 19 of an Eighth Circuit case where a Minnesota man was convicted of failing to account for and pay employment taxes, sentenced to four years in prison, and fined $75,000 (McLain v. United States, U.S., No. 11-937, 3/19/12).

The U.S. Court of Appeals for the Eighth Circuit affirmed a U.S. District Court for the District of Minnesota judgment that convicted and sentenced Francis Leroy McLain, who managed a temporary staffing agency for nurses that failed to file either a Form 941, Employer's Quarterly Federal Tax Returns, or pay employment taxes between 2002 and 2005.

At trial, McLain asserted that the staffing agency, Kirpal Nurses, was not required to account for or pay employment taxes because the nurses were independent contractors.

Read more at: Tax Times blog

Employment Tax Non-Payment Case – Supreme Court Denies Review

March 20, 2012

The Supreme Court denied review March 19 of an Eighth Circuit case where a Minnesota man was convicted of failing to account for and pay employment taxes, sentenced to four years in prison, and fined $75,000 (McLain v. United States, U.S., No. 11-937, 3/19/12).

The U.S. Court of Appeals for the Eighth Circuit affirmed a U.S. District Court for the District of Minnesota judgment that convicted and sentenced Francis Leroy McLain, who managed a temporary staffing agency for nurses that failed to file either a Form 941, Employer's Quarterly Federal Tax Returns, or pay employment taxes between 2002 and 2005.

At trial, McLain asserted that the staffing agency, Kirpal Nurses, was not required to account for or pay employment taxes because the nurses were independent contractors.

Read more at: Tax Times blog

Tax Court Had Jurisdiction over U.S.-U.S. Virgin Island Income Tax Matter

March 20, 2012

A notice of deficiency issued by the IRS to a U.S. citizen who claimed to be a bona fide resident of the U.S. Virgin Islands for the tax years at issue was valid; therefore, the court had jurisdiction. The notice of deficiency had been issued after it was determined that the individual did not qualify for the income exclusion under Code Sec. 932(c)(4) and that he should have filed returns and paid taxes to the IRS.

The individual’s claim that the IRS failed to follow the procedural rules of the Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA) (P.L. 97-248) by not issuing a notice of final partnership administrative adjustment (FPAA) instead of the notice of deficiency, was rejected because: (1) the company did not file a federal partnership return with the IRS; and (2) the company was not a partnership for federal tax purposes.

The filing of a partnership return with the Virgin Islands Bureau of Internal Revenue (BIR) did not constitute a filing of a partnership return with the IRS, even though the BIR used the same forms as the IRS, because the returns were filed to comply with Virgin Islands filing obligations, rather than any obligation under the tax laws of the United States. The company was not a federal partnership because it was a foreign entity. The “check-the-box “regulation, which allowed an entity to be classified for both federal and Virgin Islands tax purposes, did not govern because the tax years at issue were prior to the effective date for the regulation.

G.C. Huff, 138 TC –, No. 11Dec. 58,982

Read more at: Tax Times blog

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