It appears Sinbad is in so deep with the IRS, that even a tax attorney may not be able to save him.

According to the Detroit News, Sindab owes more than $8.15 million in delinquent federal taxes and the U.S. Attorney General’s office wants his house sold to help satisfy the debt, according to federal court records.

Earlier this month, an assistant U.S. attorney asked a federal judge to foreclose on several tax liens and determine whether the 53-year-old comedian is the true owner of a $1.5 million home in Hidden Hills, Calif.

Sinbad, whose real name is Sinbad Adkins, rose to fame on “Star Search” in the 1980s before starring in a string of movies like “Houseguest” and TV shows, really owns the property, the government claims.

On Dec. 11, the day after the government filed the case, Sinbad filed Chapter 7 bankruptcy in California, listing between $10 million and $50 million in liabilities and less than $50,000 in assets. That might cause a slight hiccup for the IRS in pursuit of a settlement.

The IRS claims Sinbad filed federal income tax returns for years 1998 through 2006 but failed to pay the reported taxes.

Here’s a breakdown of his IRS debt:

* 1998: $2,358,563
* 1999: $1,136,002
* 2000: $1,170,451
* 2001: $953,758
* 2002: $626,045
* 2003: $542,942
* 2004: $612,367
* 2005: $157,934
* 2006: $599,663

We can all learn a lesson from this unfortunate situation. Always play it straight with the IRS, and if you are having problems with paying your federal taxes, consult a tax attorney for the right tax advice.

source: eurweb.com

One of the most common income tax questions is what will happen if I fail to file a federal income tax return.

First of all federal income taxes are based on the amount of tax due. So if you don’t owe any taxes, no penalties are due.

However, there is a civil penalty for failure to file a timely return. According to one income tax attorney, the civil penalty is generally between 5.0% and 25% of the amount of tax required to be shown on the federal tax return per month. In addition, there is an additional civil penalty for failure to pay the tax actually shown on the federal tax return. This is between .05% and 25% of the tax amount due each month. Income tax lawyers state the two penalties are computed together in a complex algorithm that makes estimating the actual penalties a challenge.

According to some estimates approximately three percent of taxpayers avoid the process of income tax preparation and do not file an income tax return at all.

In cases where a taxpayer does not have enough money to pay the entire tax bill, the Internal Revenue Service can work out a payment plan. Tax experts recommend that people in this position should at least consult with an income tax attorney to explore their legal options regarding the overdue tax debt.

There is no statute of limitations on civil actions by the IRS for years for which no return has been filed.

For each year a taxpayer willfully fails to timely file an income tax return, the taxpayer can be sentenced to one year in prison.

Taxpayers who have not filed income tax returns are recommended to meet with their accountant or an income tax attorney.

source: wikipedia.com

A Brooklyn man who ran a tax preparation business in Flatbush was sentenced last week in Brooklyn federal court to two years in prison for defrauding the IRS.

Remy Milien, who owned and operated the Maximum Refund tax return preparations company, fabricated people’s tax returns without their knowledge so as to make his services more attractive to his customers.

Between the years 2000 and 2002, Milien defrauded the U.S. government of an estimated $200,000 to $400,000 by listing false tax deductions on the returns of his customers, as well as on his own forms.

He was sentenced before Judge Edward R. Korman to two years in prison last week, after pleading guilty in 2007 to 21 counts of fraud in U.S. District Court for the Eastern District of New York, located on Cadman Plaza East in Downtown Brooklyn.

The IRS determined the extent of Maximum Refund’s fraudulent operations after analyzing tax return forms that passed through its office and interviewing some of the taxpayers, as well as sending an undercover agent to Maximum Refund to have a tax return prepared.

Milien, without asking the agent for any relevant information, prepared a fraudulent tax return form with fabricated deductions. Thus, investigators determined that he was performing these illegal operations without the knowledge of the taxpayers he represented, some of whom may face unanticipated tax debt and audits.

Maximum Refund processed over 2,000 tax returns in total — almost of all of them for low-income individuals. These sorts of crimes are difficult for the IRS to prosecute because they consist of consistent small-scale frauds by third-party tax preparers that aggregate into large-scale fraud after hundreds of repetitions.

Milien fabricated tax deductions on the 1040 income tax returns for his customers — for example, gifts to charity, job expenses, gambling losses and medical expenses. A majority of the returns claimed itemized deductions in excess of 50 percent of the taxpayers’ adjusted gross income, according to court documents.

As Milien performed much of this fraud without the knowledge of his customers, presumably he was trying to make his business more popular by offering customers impossible and illegal savings on income tax.

A close analysis of 26 returns by the IRS revealed that Milien’s fraudulent claims lost the IRS roughly $58,000, which he now owes in restitution. Furthermore, upon analyzing 125 more tax returns processed by Maximum Refund, the IRS found additional losses of over $200,000 in fraudulent claims on more than half of the forms.

Milien’s requests in court for a lower sentence based on his low risk of recidivism were dismissed by prosecutors, as they argued that while he was charged with several counts of fraud, he actually committed these same crimes hundreds of times.