Tax Apprentice

Back in 2004, Donald Trump was just another overextended real-estate developer with two divorces and four bankruptcies under his belt. That all changed with the debut of The Apprentice, the show that made "you're fired!" a national catchphrase. It's safe to say that without the popularity of The Apprentice, Trump wouldn't have just taken the oath of office to become the country's 45th President.

Apprentice candidates completed all sorts of business-oriented tasks, like opening a lemonade stand, designing an ad campaign for a private-jet service, and managing a restaurant on New York's bustling Times Square. So we got to thinking . . . what would happen if NBC rolled out a season of Tax Apprentice? Who would host it? Who would compete? And what sort of challenges would they embrace to entertain the breathless millions who would anxiously wait for each "very special episode"?

We're going to need a colorful celebrity host, one who knows their way through the jungle of the 70,000-page tax code. We considered baseball hit king and convicted tax felon Pete Rose. We considered Venice Film Festival winner and convicted tax felon Wesley Snipes. And we considered legendary country crooner and tax scofflaw Willie Nelson. But we think the strongest pick is Beanie Babies creator Ty Warner, who launched a billion-dollar business and paid a $53 million civil penalty for hiding income in a Swiss bank account.

Beyond the draw of the host, the real action comes from the weekly competitions featuring a representative sampling of astonishingly good-looking CPAs, Enrolled Agents, and Registered Tax Return Preparers:

    Light Bulb Challenge: How many tax professionals does it take to screw in a lightbulb? Let's find out! The challenge starts with a bare bulb screwed into a 20-foot ceiling and a file cabinet full of back tax returns, brokerage statements, and miscellaneous travel receipts. The winning team will be the first one to stack the files high enough to climb up and change the lightbulb without incurring a deductible medical expense.

Deduction Scavenger Hunt: Teams sit down with a moderately-complicated and totally clueless business owner's annual returns: three 1065s, an 1120S, an 1120, and a 1040. Their goal is to comb through the returns to find the mistakes and missed opportunities that cost the owners thousands in tax, then prescribe solutions to rescue those wasted dollars.

Audit Lottery: Everyone knows that switching a business owner from a sole proprietorship to an S corporation can slash their risk of audit by over 50%. Teams will scrub a business owner's return, identify opportunities to "fly under the radar," and make sure all the paperwork is in order. Then a panel of guest judges made up of experienced auditors will put on their green eyeshades and examine the returns to see who's the cleanest.

(Hey, wait a minute, a couple of those are completely legitimate!) Here's today's bottom line. Paying less tax isn't a game, and you can't afford to treat it like a reality show. Tax planning is serious business and you deserve serious expertise on your side. So call us to pay less, and tell unnecessary taxes, "You're fired!"

Politicians Behaving Badly

(Hard to believe, right?)

Last week, we presented three stories from the IRS Criminal Investigation unit's most recent annual report outlining their work to protect the Treasury's revenue from grifters, cheats, and cons. It's a "true crime" fan's favorite IRS report that puts TV cop dramas to shame.

Most public servants are as honest and dedicated as we could want them to be. But some find ways to use their positions for more "entrepreneurial" pursuits. That's why the CI unit pursues public officials for offenses like bribery, extortion, embezzlement, and money laundering, too, not just tax fraud. Here are three stories of politicians who really should have known better:

    George Gallo earned $150,000 per year as chief of staff to the Connecticut House of Representatives' minority leader, where he helped his party's members spot opportunities to advance their interests through the legislature. Along the way, he spotted a way to steer campaign funds to a friendly Florida direct-mail consultant in exchange for $117,226 in kickbacks. Hey, he even paid his tax on the money! Unfortunately, while that may have helped avoid tax-fraud charges, it couldn't save him from a year and a day in federal prison for mail fraud.

Barry Robinson ran the Baltimore Department of Transportation's Division of Transit and Marine Services, where he found nontraditional opportunities to supplement his city pension. First he found a vendor who placed advertising on the city's free "Charm City Circulator" bus, and made him an offer he could hardly refuse: pay the city the $60,000 he owed, or pay him just $20,000 in cash. That worked well enough that he took a $70,000 bribe from a Canadian company for the right to buy 13 city-owned bus shelters. Like his colleague Gallo in Connecticut, Robinson's efforts ultimately landed him a year and a day in jail.

Louis "Lolo" Willis was Executive Director of the U.S. Virgin Islands legislature, where he oversaw renovating the legislature's historic building overlooking the harbor in Charlotte Amalie, St. Thomas. You might think that serving the citizens of a paradise like the Virgin Islands would be its own reward. But of course you would be wrong — Willis used his position to squeeze $13,000 in bribes out of the contractors working on the building. Now Willis gets to spend five years in a very different sort of government building, one with no historic interest or harbor views at all.

If there's any silver lining to these stories, it may be this. We live in an era of unprecedented partisanship, with Democrats and Republicans lobbing "fake news" across the aisle and ducking compromise like a zombie ducks sunlight. It's good to know that even in today's toxic environment, our officials can find at least one thing to agree on. It's just too bad that one thing is graft!

We know you don't like paying taxes. But you don't have to break the rules to get ahead like these guys tried. Just call us, and we'll help you investigate opportunities that don't risk time in a small gray room. And remember, we're here for your bagmen and accomplices family, friends, and colleagues, too!

Happy

The IRS publishes hundreds of reports every year, covering all sorts of topics. You'll find routine statistical summaries, like the always-popular "Number of Individual Income Tax Returns, Income, Exemptions and Deductions, Tax, and Average Tax." You'll find page-turners worthy of a Tom Clancy thriller, like last summer's "Actions Can Be Taken to Better Address Potential Noncompliance for Roth Individual Retirement Arrangement Conversions." But the most entertaining report of all is the Criminal Investigations unit's annual business report summarizing their work for the previous year.
On November 29, CI released their annual report for FY 2015. As is typical in government, budget cuts colored the story — the unit hired just 45 investigators over the last three years, and attrition has reduced staffing to its lowest levels since the 1970s. And, as usual, you've got to be a really bad guy to find yourself in CI's crosshairs. For 2015, the unit initiated just 3,835 investigations, down from 4,297 in 2014. But if CI does take you on, they've usually got you dead to rights: the unit won 93.2% of the cases they prosecuted.
Dig behind the dry statistics, though, to read about the actual offenders that CI targets, and you'll find one sorry smorgasbord of human greed, frailty, arrogance, and downright stupidity. Here are three of the more entertaining stories:
    Happy Asker grew his company, Happy's Pizza, from a single Detroit-area location in 1994 to a 95-store chain. But paying taxes didn't make him happy. (Sorry, couldn't resist.) So he conspired with four of his franchisees and employees to skim $6.1 million in cash from the books and divvy it up in weekly "profit splits." The group also underreported wages to evade $2.39 million in payroll taxes, because why not? Now Happy will spend the next fifty months eating bland microwaved pizza at the Morgantown Federal Correctional Institution.
Xavier Franklin Lewis was pastor of the Holy Ghost Praise and Deliverance Ministries outside Savannah, Georgia. But he behaved more like a mobster than a minister. He submitted false tax returns to the IRS, stole refunds out of the mail, and used bank accounts he set up in the church's name to cash 92 IRS checks totaling more than $250,000. As investigators closed in, Lewis visited at least one potential witness and told her she needed to change her story, "or else." Now he's looking at 119 long months in purgatory to read his bible and repent for his sins.
Michael Spitzauer launched a company called Green Power, Inc., and told investors he had found a way to convert municipal waste into biofuel. But what he'd really found was a way to convert demand for cutting-edge green energy into a classic Ponzi scheme. Spitzauer used his investors' money on a million-dollar mansion, private schools for his children, Seattle Seahawks tickets, and paying back previous victims. Oh, and somehow he "forgot" to pay taxes on the $10 million he stole. Now he gets to spend four years in a northern California prison and pay the IRS $2,585,177 in restitution.
Crime really doesn't pay — especially when it comes to taxes! Fortunately, there's no reason to learn that lesson the hard way! We can help you help manage your taxes the right way, with a comprehensive menu of court-tested, IRS-approved strategies and tactics. We're committed to helping you pay less, no matter what the New Year brings!

Tax Thoughts for the New Year

2017 is likely to be a big year for taxes. House Speaker Paul Ryan and President-elect Donald Trump haven't been shy about their New Year's resolutions to rewrite the tax code, and we could be in for quite a ride. So here are some thoughts to start exercising your 2017 tax-planning muscles:

    "If you get up early, work late, and pay your taxes, you will get ahead — if you strike oil."
    J. Paul Getty

"If you are truly serious about preparing your child for the future, don't teach him to subtract — teach him to deduct."
Fran Lebowitz

"The question is: What can we, as citizens, do to reform our tax system? As you know, under our three-branch system of government, the tax laws are created by: Satan. But he works through the Congress, so that's where we must focus our efforts."
Dave Barry

"The avoidance of taxes is the only intellectual pursuit that carries any reward."
John Maynard Keynes
"The taxpayer — that's someone who works for the federal government but doesn't have to take the civil service examination."
Ronald Reagan
"Income tax returns are the most imaginative fiction being written today."
Herman Wouk
"Dear Tax Commissioner: Three years ago I cheated on my taxes. Since then I have been unable to sleep at night. Enclosed is $5,000. If I still can’t sleep, I'll send you the rest."
Anonymous
"Just because you have a briefcase full of cash doesn't mean you're out to cheat the government."
Pete Rose
"The difference between death and taxes is death doesn't get worse every time Congress meets."
Will Rogers
"Worried about an IRS audit? Avoid what's called a red flag. That's something the IRS always looks for. For example, let's say you have some money left in your bank account after paying taxes. That's a red flag."
Jay Leno

We wish we could tell you exactly what's going to happen with taxes, in 2017 and beyond. But whatever the future holds, we can promise we'll be here to help you make the best of it, in 2017 and beyond. And remember, we're here for your family, friends, and colleagues too!