IRS Times & Inquirer
Volume IV, Issue 7
Former N.J. Mayor Admits to Filing False Tax Return
Former State Assemblyman Gerald Luongo has entered a plea bargain admitting to mail fraud and tax fraud.
The former mayor of Washington Township in Goucester County, N.J., claimed $35,000 in campaign expenses but could not provide the IRS with receipts, leaving the agency to believe the $35,000 was used for personal expenses.
The plea bargain came on the heels of an IRS investigation into Luongo’s finances from 1995 to 1999.
Incidentally, Luongo is the second New Jersey mayor to have trouble with the IRS this year. In August, as reported in IRS Times & Inquirer, James Plosia, who served 25 years as the mayor of East Rutherford, pleaded guilty to filing a false income tax return for 1994. According to Plosia, he reported only $454,000 of the $521,620 his construction company earned.
De-Taxing America Founder Convicted of Tax Evasion
Barrie Leslie Konicov, of Amado, Ariz., the founder of De-Taxing American and author of anti-tax book The Great Snow Job, has been convicted not only of tax evasion, but also of impeding, impairing, obstructing, and defeating the lawful government functions of the IRS.
Konicov failed to file income tax returns for the years 1994, 1995 and 1996. According to court evidence, Konicov hid more than $3.9 million in revenue he received from his De-Taxing America program.
His wife, Susanne Konicov, pleaded guilty to failing to file income tax returns for the years 1994, 1995 and 1996.
Escort Service Owners Plead Guilty to Tax Evasion Charges
Barbara Furry and James R. McCahill pleaded guilty to tax evasion charges after a two-year investigation into their business and finances.
Furry, 57, and McCahill, 64, both of Scottsdale, Ariz., were indicted on March 31, 1999, no charges relating to the operation of several escort services.
According to the indictment, Furry and McCahill from 1992 to 1998 opened various bank accounts to process credit card transactions as payment for escort services and then transferred the money to their personal accounts. They attempted to destroy all evidence of the business transactions.
From 1995 to 1997, Furry evaded $39,629 in taxes and McCahill $22,128 during that same period. They face up to five years in prison.
Tucson Insurance Executive Receives Four Months in Prison
Don H. Pace, a Tucson, Ariz., insurance executive, learned that $36,000 is hard to hide from the Internal Revenue Service.
Pace was sentenced to four months in prison for two wire fraud felony counts and filing a false income tax return.
Court evidence showed that Pace, as CEO of Pace American Group Inc. in 1992, ordered American Bonding Company to send $36,000 to his personal account, which he did not account for on his 1992 personal income tax return.
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Colorado Scam Artist Indicted for Tax Evasion, Other Charges
Randall G. Morse, 43, of Boulder, Colo., was arrested Oct. 8 at a hotel in the Denver Tech Center for mail, wire and loan fraud, as well as money laundering, tax evasion, conspiracy to defraud the government and tampering with a witness.
According to the indictment, Morse’s company, National Funding Source Inc., which operated as “The Business Solution,” allegedly defrauded 1,200 people of $1,890,414. Using telemarketers, the company would identify people who were interested in purchasing financial “services.”
For fees ranging from $395 to $6,750, Morse’s company was supposed to help customers obtain loans to consolidate debt. However, only on few occasions did Morse find financings for his victims, the indictment says.
What’s more, despite the fraudulent business activity that resulted in the mail fraud, insurance fraud and loan fraud charges, Morse did not report the income he received from his company. He faces five years in prison and a $100,000 fine alone just for that tax-related charge.
“As prosecutors, we must aggressively pursue these types of cases to maintain consumer confidence in the many legitimate businesses and financial institutions that try to assist people in need,” said U.S. Attorney John Suthers.
FRIEND OF MONTANA FREEMAN CONVICTED OF TAX FRAUD
Ronald Donald Cooper, of Littlefield, Ariz., was convicted Oct. 2 of attempting to defraud the Internal Revenue Service.
Trial evidence showed that Cooper sent a worthless “lien draft” worth $86,000 in order to pay his $43,000 tax debt and, in turn, receive a $43,000 refund.
But Cooper learned the IRS isn’t that stupid. During the mid-90s, Montana Freeman Leroy Schweitzer issued such “lien drafts” as a way to defraud the government. Members of the Montana Freemen did not pay taxes and would not obey federal laws. Schweitzer is in prison for 22 years for fraud and other charges.
ILLEGAL GAMBLING BUSINESS OPERATOR FILED FALSE RETURN
It wasn’t the least of his crimes, but it’s the one that could put him behind bars.
Howard Meyers, 53, of Bethesda, MD., pleaded guilty to filing a false income tax return while running an illegal gambling business.
According to his guilty plea, Meyers’ ran an underground bookmaking business and failed to include income generated by the operation on his federal income tax returns for the years 1994 to 1998, resulting in $60,763 in total tax still owed.
Meyers faces a maximum penalty of eight years imprisonment for the charges.
TEXAS HOTELIER PLEADS GUILTY TO INCOME TAX EVASION
Ashvinkumar Gandhi, 51, of Galveston, Texas, pleaded guilty to tax evasion.
According to the guilty plea, Gandhi, the owner of Gayatri Inc. and the Lake Charles Days Inn Motel, attempted to evade taxation by deleting from the computer a number of room bookings that were paid for with cash.
Gandhi did not report this income on his tax filings for the 1995 tax year, resulting in an additional $114,852 he owes the IRS.
He faces up to five years in prison and/or a $100,000 fine.
FORMER PALO ALTO MAYOR PLEADS GUILTY
R.B. Jones, the mayor of Palo Alto, Calif., from 1996 to 1999, pleaded guilty to bribery, mail fraud, and filing a false tax return and will receive 27 months in prison.
According to the guilty plea, Jones accepted a $5,000 bribe from an employee of the California Water Services Company to help the company win a contract to supply water to East Palo Alto.
Jones, however, failed to report the $5,000 as part of his 1999 income. He also admitted to engaging in mail fraud later that year, resulting in the total 27-month sentence.
TEXAS MAN ADMITS TO FALSE STATEMENTS
Johnny Ray Farris, Sr., 62, of Houston, Texas, pleaded guilty to making false statements on his 1994 income tax return and failing to file whatsoever an income tax return in 1995. He faces up to four years in prison and/or up to $350,000 in fines.
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IRS Question Corner …
Question: I’ve run my own business for the last 10 years and dealing with income taxes – both business and personal – has been a nightmarish task. Recently, though, it appears to have become worse. Somehow, according to my calculations, I owe the IRS $20,000 in back taxes. I can’t pay that amount. What should I do? Move overseas?
Answer: Now, now, let’s not get hasty here. Before you jump on that place bound for the Caymans, you should realize that you still have a number of options and you may not owe as much as you think.
A qualified tax professional will go over your income and deductions to figure out exactly how much money you owe. Oftentimes, since average Americans simply do not understand the complicated tax system as well as tax professionals, this process can save taxpayers thousands of dollars.
But that isn’t your only option; it’s just a starting point. Available to taxpayers today is what’s called an Offer in Compromise. Since it’s in the Internal Revenue Service’s interest to have debt settled, the IRS is often happy to negotiate with taxpayers so they won’t have to chase them year after year over mere pennies.
When I say negotiate, I really mean it. A qualified tax professional often can come to an agreement with the IRS for pennies on the dollar. An Offer in Compromise is a complicated process, however, so make sure you enter into it with a qualified tax professional. What’s more, a payment process also can be negotiated during this stage, allowing you to work out a monthly payment with the IRS so your debt is livable and manageable.
I deal with IRS problems such as yours every day, because I’m an IRS Problem Solver. My job is to ensure that taxpayers are fairly represented and do not pay the IRS a penny more than necessary. Taxpayers have a lot of rights when it comes to negotiating with the IRS, and I’ll make sure you take full advantage of those rights. I encourage you to call my office at 732-240-4055 for a free, no-risk consultation. Call Me Today!
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