Spartanburg County Resident Charged With Tax Evasion

            Quentin J. McClintock, 38, was charged with seven counts of income tax evasion for tax years 2001-2007.

            Although McClintock earned income in excess of $674,000 from 2001 to 2007, he used fraudulent W-4 withholding forms with his employer to avoid having taxes withheld from his wages, and then did not file returns, according to the investigation.

          McClintock is facing up to 35 years in prison and fines of up to $70,000 if convicted of the charges.


Marion Barry Owes $277,000 in Back Taxes

Prosecutors allege Washington, D.C., Council member and former Mayor Marion Barry has failed to pay more $277,000 in back taxes.

In a recent court filing, prosecutors told the court the politician had not made a tax payment during a period in which he took a Jamaican vacation and ran for re-election to the Ward 8 council seat.

“There is no excuse for the defendant’s failure to make payments to the District of Columbia because, during this six-month period, the defendant nevertheless had enough time and money, for instance, to take a six-day vacation in Jamaica in Sept. 2008 as well as to run for re-election as a council member,” prosecutors told the court.

In 2006, Barry received three years of probation for not filing tax returns from 1999 to 2004.

MODULAR HOME BROKER HID $406,000 IN TAXABLE INCOME, FACES 3 YEARS IN FEDERAL PRISON

The owner of Factory Direct Modular Homes in Brick, N.J., pleaded guilty to tax charges for underreporting the business’ income for tax years 2002 and 2003 by about $406,000. Janice Pfefferkorn, 54, who also went by the name Janice Morton, pleaded guilty to a two-count Information charging her with two counts of filing a false federal tax return. According to court records, as a broker for a modular home manufacture, Pfefferkorn would typically collect a 10 to 20 percent deposit from modular home buyers. Final payments were due to the modular home manufacturer upon delivery of the home, at which time the manufacturer would pay FDMH a commission on the sale. Pfefferkorn understated the gross receipts of FDMH by cashing a large number of business checks and then deposit only a fraction of the proceeds back into the FDMH business bank account. The total tax loss to the IRS is $125,000 for tax years 2002 and 2003. IRS Criminal Investigations discovered the underreported taxes after following up on leads the tax-collecting agency received. Pfefferkorn faces up to three years in prison and a fine of up to $100,000."

Tenn. Attorney Charged with Evasion

Thomas E. Cowan Jr., 64, of Elizabethton, Tenn., has been indicted by a federal grand jury on one count of income tax evasion and three counts of failure to file income tax returns.

According to the indictment, Cowan, an attorney, attempted to evade a large part of the income and self-employment taxes, penalties and interest due to the United States for tax years 1993 to 1997. The indictment alleges that Cowan failed to file income tax returns with the IRS each year and failed to pay any income tax due and owing for those years. Additionally, the indictment states that Cowan concealed his true income and assets by diverting income checks into the checking account of a family member, cashing checks, depositing earned income and making personal payments to and from his law firm’s trust account, and using nominees to conceal the ownership of assets from the United States.

The indictment also charges Cowan with failing to file federal income tax returns with the IRS for 2002, 2003 and 2004. In each of those years, the indictment states, Cowan had gross income totaling $112,677.78, $72,412.63, and $50,971.83, respectively.

If Convicted, Penn. Man May Spend 12 Years in Prison on Tax Charges

John C. Gedekoh III of Belle Vernon, Penn., was indicted by a federal grand jury in Pittsburgh on charges of filing false tax returns.

According to the indictment, Gedekoh knowingly filed false federal income tax returns for the years 2002 to 2005 by understating his gross receipts by $223,161.81. The IRS Criminal Investigation Division conducted the investigation leading to the indictment in this case.

If convicted, Gedekoh faces up to 12 years in prison and a fine of up to $1 million. 

Know Your Rights!

• You have the right to be represented by an Attorney, CPA or EA when dealing with the IRS.

• Be sure to consult with one before you say something to the IRS that you may regret.

• Remember, IRS employees are paid to look out for the government’s interest, not for yours.

• You have the right to stop any questioning by the IRS and ask for time to obtain representation.

• Be sure to make copies of any documentation you provide to the IRS.

• You have the right to Appeal most IRS actions. Get professional advice before you sign any IRS documents.

You may wish to consult your lawyer or another lawyer instead of me. You may obtain information about other lawyers by consulting the Yellow Pages or by calling the South Carolina Bar Lawyer Referral Service at 799-7100 in Columbia or toll-free 1-800-868-2284. If you already have engaged a lawyer in connection with the legal matter referred to in this letter; you should direct any questions you have to that lawyer. The exact nature of your legal situation will depend on many facts not known to me at this time. You should understand that the advice and information in this letter are general and that your own situation may vary.

ANY COMPLAINTS ABOUT THIS LETTER OR THE REPRESENTATIONS OF ANY LAWYER MAY BE DIRECTED TO THE BOARD OF COMMISSIONERS ON GRIEVANCES AND DISCIPLINE, POST OFFICE BOX 11330 COLUMBIA, S. C. 29211 TELEPHONE NUMBER (803) 734-2038.">

Woman Did Not Pay $1.5m, Gets 41 Months in Prison

A San Antonio, Texas, woman was sentenced to 41 months in federal prison and ordered to pay $1.5 million in restitution to the IRS for her role in a fraudulent tax scheme.

In addition to the prison term, United States District Judge Fred Biery ordered that Terrell Diamond be placed under supervised release for a period of three years after completing her prison term.

According to court records, Diamond, along with her now-ex-husband and co-defendant, William Diamond, conspired to defraud the IRS in the assessment and collection of more than $1.5 million in employment taxes due and owing from November 1996 to June 2003.

The employment taxes owed pertained to temporary employment agencies owned and operated by the Diamonds, including Ameriforce and Primo Labor.

On April 24, 2008, Diamond pleaded guilty to one count of conspiracy to defraud the IRS. William Diamond pleaded guilty to the same charge on February 29, 2008. William, who faces up to five years in federal prison, is scheduled to be sentenced in May.

Thank You! Thank You!

Thanks to YOU, the word is spreading. Thanks to my clients and friends who graciously referred me to their friends, clients and relatives last month! I enjoy building my business based on the positive comments and referrals from people just like you. I just couldn’t do it without you! Pamela Beasley, Toby Hoffman, Jeff Brooker, Bonnie Horn, Helen Harrington, Bill Smith, Randy Ramsey, Caroline Wise, Cathy Davis, Arnold Davis, Andy Anderson, Arnold Schraibman, Pat Greenburg, Cheri Bell, John McGrath, Frank Crumpton, Haley Krouse, John Koon, Jonathan Hendrix, Dick Harpootlian, Brian Boger, Rock Redmond, Daniel Stone, Jeremy Stroud, Bernie Maybank, Tommy Falls, Bob Lewis, Eric Reid, Rob Turner, Jim Davis, Kem Smith, Bob Lewis,Eric Reid, Tommy Falls Will Johnson and Kirk Horsley"

"Who Else Wants To Win A $250 Transferable Gift Certificate?”

Take my Trivia Challenge and you could win too!

This is one of my favorite sections. Each month I’ll give you a new trivia question. The first THREE people who call my office with the correct answer win a free $250 reduction on any IRS service I provide. (One per client, please.) And best yet, your certificate is transferable. Use it yourself, or give it to a family member or special friend and help them save money. Take your best guess, then call me at 803-771-4037 ext. 25.

This Month’s Mega Trivia Question…

Which computer entrepreneur is now on Dancing with the Stars?

a) Steve Wozniak

b) Bill Gates

c) Andy Bechtolsheim

d) Meg Whitman

Call me right now with your answer! 803-771-4037 ext. 25"

OHIO MAN DID NOT REPORT $2.4 MILLION IN COMMISSION INCOME

Mark J. Zokle, 43, of Sandusky, Ohio, was charged with failing to file federal income tax returns on $2.4 million in income. The information alleges that in 2001, 2002 and 2003, Zokle worked as an independent sales representative for TEMO Sunrooms, of Clinton Township, Mich., and earned commission income of $862,463.89, $756,980.77, and $794,067.64, respectively, in those years but failed to file tax returns.

IRS Question Corner

Question: Give it to me straight, please. I have substantial tax debt. What is the Offer in Compromise, and how do I qualify?

Answer:  Like you, I’ll get straight to the point: the Offer in Compromise is an IRS program that can reduce your tax debt significantly.

Really.

This is how it works and why it exists: If you owe a substantial amount of tax debt that you cannot, for whatever reason, pay off in the future, you can negotiate with the IRS to accept a settlement offer that will eliminate your debt once and for all. Oftentimes, as I mentioned, this amounts to pennies on the dollar. The reason the IRS offers this program is simple: Following years of chasing down deadbeat taxpayers, the tax-collecting agency learned that a kinder, gentler approach can be a more efficient way of collecting taxes. In the end, the IRS theory goes, the government will collect more of what it’s owed by being flexible with taxpayers willing to come forward and settle their debts.

Now, whether you qualify is ultimately going to be an answer given to you by the person who analyzes your previous returns and current financial situation. For that reason, if you have substantial tax debt, I recommend you consult with a qualified tax professional as soon as possible. He or she will take a look at your current situation and see what program works best for you.

If you do indeed qualify for the Offer in the Compromise, you and your tax professional would set up an appointment with an IRS agent and discuss the terms of your settlement agreement. That’s where you can effectively reduce your debt by a significant amount. However, keep in mind that even if you do not qualify for the Offer in Compromise, you have other options available.

Fairfield County Tax Preparer Charged with Fraud and Income Tax Evasion

Elizabeth Trapp Smith, 43, owner of Liz Tax Service, was charged with nine counts of assisting in the preparation of a fraudulent tax return and one count of income tax evasion.

The accusations are that although her clients were unaware of her activities, Smith overstated deductions and/or withholdings on tax returns she prepared for her clients to generate larger refunds.  Smith also is accused of preparing and filing her own return with overstated deductions and incorrect withhholding amounts.

Smith is facing up to 50 years in prison and fines of up to $14,5000, if convicted.

North Augusta Bookkeeper Charged With Filing Fraudulent Returns

            Debra G. Solesbee, 55, an accountant and tax preparer for Advanced Accounting and Tax Services, Inc., is charged with 15 counts of preparing fraudulent income tax returns and 2 counts of failing to pay withholding tax.  She is facing up to five years in prison on each of the 17 counts, if convicted.

            Solesbee, a resident of Edgefield, allegedly falsified business miles and employee business expenses of $176,226 on tax returns she prepared for her clients in 2006 and 2007.  Her clients were unaware of these claims on their returns.  Solesbee also is accused of failing to pay taxes withheld from her own wages and wages of her employees.

Lawn Care Business Owner from Bluffton Charged

            James H. McLain, owner of McLain Spraying Services, a lawn care business, was charged with five counts of income tax evasion.

Charleston Tax Preparer Arrested on Fraud Charges

            Benjamin Wiggins, 57, owner of Wiggins Tax Service on James Island, was charged with 12 counts of preparing fraudulent income tax returns and five counts of filing fraudulent tax documents with tax returns.

            Wiggins is accused of preparing the fraudulent tax returns from 2004-2006 using exaggerated or bogus tax deductions to reduce the tax liability for his clients.

            Some Wiggins Tax Service clients could face additional penalty and interest charges following the investigation, but no further arrests are expected.

            Wiggins is facing up to 65 years in prison, if convicted of all charges.

Oops I Did it Again … Greenville Resident Arrested on Tax Charges

            While on probation for tax evasion, a Greenville County warehouse employee, Clarence N. Evans, 40, has done it again.  Evans was jailed following his arrest for the second time in three years on tax evasion charges.

            The new charges against Evans are for filing fraudulent W-4 withholding forms with his employer to avoid having $5,203.00 of taxes withheld from his wages.

            Three years ago, Evans pled guilty to 3 counts of similar tax evasion, but that time he worked at a Mauldin-based warehouse.

            Evans is facing up to 20 years in prison and fines of up to $40,000.00, if convicted of the latest charges.

I’d Like To Hear From YOU!

Whether you’d like to avoid the IRS, contact the IRS, settle with the IRS or just want to refer a friend, relative or client, I’d love to hear from you. I would be happy to provide you or that special person you refer a no-obligation confidential consultation to explain every option available to solve IRS problems.

Law offices Joseph M. Arndt, III, P.A.

3218 Millwood Avenue (29205)

Post Office Box 52 (29202)

Columbia, South Carolina

Telephone: (803) 771-4037 Facsimile: (803) 771-2615 Email: www.irsaway.com

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