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Psychic, Son of Famous Psychic Sylvia Browne, Fails to Foresee IRS Audit & Assessment?

Psychic, Son of Famous Psychic Sylvia Browne, Fails to Foresee IRS Audit & Assessment?

In Dufresne v.Commissioner, Christopher Dufresne a High-Income Psychic, failed to foresee his IRS Audit, their detection of $1,505,546 of unreported deposits, and $101,866 in penalties plus litigation expenses. 

Christopher Dufresne’s mother was Sylvia Browne, a well-known psychic who appeared on television, wrote books, and gave lectures. During the years in issue petitioner worked full time as a psychic counselor for his mother’s business, Sylvia Browne Corp. (Corporation), an S corporation. On behalf of the Corporation petitioner performed psychic readings as often as seven days a week. Clients were charged $200 for a 30-minute reading. 

Mr. Dufresne had clearly not seen his future, or his greed blinded him from seeing, that the Tax Court would not accept that his unreported taxable cash deposits totaling $1,505,546 for 2010-13, where not repayments he received from Ms. Browne for loans of approximately $1,490,388 for the payment of past due Federal taxes and for the purchase of real estate properties, but rather income from psychic readings he performed for clients charging them $200 for a 30-minute reading,
This case provides a that you don’t have to be a psychic to determine what standard is required to establish a legitimate debtor-creditor relationship.

In the end, Mr. Dufresne should have consulted with a certified public accountant or tax attorney before assuming that the payments received from the Corporation or Ms. Browne would be safely recharacterized as loan repayments.

Had he done this, the Tarot cards might have revealed the looming IRS audit & assessment and retaining experienced Tax Counsel would have been far less expensive than the $1,500 per hour that Ms. Browne purportedly charged for her services.

Have an IRS Tax Problem? 

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Read more at: Tax Times blog

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