Explain This Situation

[Patricia McCormick]

I do not understand this situation. I understand that taxes were either not
or incorrectly filed, but who actually filed the returns? I have been left
with the impression that Mr. Snipes filed his own income tax returns? I am
fairly certain that there was an accountant involved in this process
somewhere? Why is the celebrity penalized instead of the accountant actually
preparing the return? I understand that Wesley Snipe is the person with the
income, but he is an actor, since when does he handle his own taxes? Why were
there not penalties imposed on the accountant? That does not make sense to me.

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[Mark Bole]

On 2013-05-21 16:15, Patricia McCormick wrote:
> I do not understand this situation. I understand that taxes were either
> not
> or incorrectly filed, but who actually filed the returns? I have been left
> with the impression that Mr. Snipes filed his own income tax returns? I am
> fairly certain that there was an accountant involved in this process
> somewhere? Why is the celebrity penalized instead of the accountant
> actually
> preparing the return? I understand that Wesley Snipe is the person with
> the
> income, but he is an actor, since when does he handle his own taxes?
> Why were
> there not penalties imposed on the accountant? That does not make sense
> to me.
>

If you meant to include a link, none came through, so we don't know
which "situation" you refer to.

I don't have time or inclination to read up on Snipes' case right now,
but you more or less answer your own question. If you "understand that
taxes were [...] not [...] filed" then you understand that no one
actually filed the returns, and the accountant who did not prepare the
unfiled returns would not be accountable for them not being prepared and
filed, would he? The set of all accountants who did not prepare returns
for Mr. Snipes would most likely include 100% of all accountants.

If returns *were* filed (which is only one of two possibilities that the
rest of your message deals with), and there was a significant
understatement of income or a frivolous position taken, then preparer
penalties would apply. However I don't think that was the case.

As a separate civil matter, perhaps Mr. Snipes has sued or will sue a
tax professional that he believed he engaged to correctly prepare his
returns, but again I don't think that is the case. The IRS would have
no role in such a lawsuit, of course.

--

Mark Bole, EA
Enrolled Agents - America's Tax Experts
http://markboletax.com

[Pico Rico]

"Mark Bole" <ma...@pacbell.net> wrote in message
news:knh058$q9s$1...@dont-email.me...

I did a quick read and found that he failed to file tax returns, and held
the position that income was not taxable - you know, the bogus tax protester
deal. A couple of goofballs who aided him with this tax protest were also
convicted.

[Barry Margolin]

In article <knh058$q9s$1...@dont-email.me>, Mark Bole <ma...@pacbell.net>
wrote:

> If you meant to include a link, none came through, so we don't know
> which "situation" you refer to.

I guess he assumed you'd recognize it from the news. The movie star
Wesley Snipes was in prison for over 2 years, and got out about a month
ago, on tax evasion charges.

>From
http://abcnews.go.com/blogs/entertainment/2013/04/wesley-snipes-released-
from-prison/

He belonged to a group that challenged the government’s right to collect
taxes. Prosecutors say he failed to file returns for at least a decade
and owed millions in back taxes.

That doesn't sound like his accountant made a mistake on his taxes.

--
Barry Margolin
Arlington, MA

[Alan]

On 5/22/2013 10:50 AM, Barry Margolin wrote:
> In article <knh058$q9s$1...@dont-email.me>, Mark Bole <ma...@pacbell.net>
> wrote:
>
>> If you meant to include a link, none came through, so we don't know
>> which "situation" you refer to.
>
> I guess he assumed you'd recognize it from the news. The movie star
> Wesley Snipes was in prison for over 2 years, and got out about a month
> ago, on tax evasion charges.
>
>>From
> http://abcnews.go.com/blogs/entertainment/2013/04/wesley-snipes-released-
> from-prison/
>

> He belonged to a group that challenged the government’s right to collect

> taxes. Prosecutors say he failed to file returns for at least a decade
> and owed millions in back taxes.
>
> That doesn't sound like his accountant made a mistake on his taxes.
>

The ABC news article is incorrect when it says Snipes was convicted of
tax evasion. In fact, the jury found him not guilty of conspiracy and
not guilty of tax fraud. The jury found him guilty of misdemeanor
charges of failing to file tax returns. The head of the tax protestor
group (Eddie Kahn) and a former CPA (Doug Rosile) were found guilty of
tax fraud and conspiracy.

[removep...@yahoo.com]

On Tuesday, May 21, 2013 4:15:28 PM UTC-7, Patricia McCormick wrote:

> I do not understand this situation. I understand that taxes were either not
> or incorrectly filed, but who actually filed the returns? I have been left
> with the impression that Mr. Snipes filed his own income tax returns? I am
> fairly certain that there was an accountant involved in this process
> somewhere? Why is the celebrity penalized instead of the accountant actually
> preparing the return? I understand that Wesley Snipe is the person with the
> income, but he is an actor, since when does he handle his own taxes? Why were
> there not penalties imposed on the accountant? That does not make sense to
> me.

According to the law you are responsible for your own tax return. After all, both you and your preparer have to sign it. The tax preparer was also charged.

Snipes was acquitted of tax fraud and conspiracy (which carry heavier sentences), and convicted of the misdemeanor of not filing a tax return -- 3 counts. He got the maximum fine and prison sentence because it seems they want to make an example of these ridiculous tax evasion arguments that you don't have to pay income taxes. His tax preparer and it that tax preparer's boss were charged with the more serious crimes.

BEGIN QUOTE http://www.sfgate.com/news/article/Snipes-gets-3-years-in-prison-3216733.php

Snipes was acquitted in February of five additional charges, including felony tax fraud and conspiracy. Snipes' co-defendants, Douglas Rosile and Eddie Ray Kahn, were convicted on both of those counts.

Kahn, who refused to defend himself in court, was sentenced to 10 years, while Rosile received 54 months. Both will serve three years of supervised release. Snipes will serve one year of supervised release.

END QUOTE

If I were the judge I would have given a lesser sentence because as a country I think we overuse the prison system, and he would start making money again and pay taxes on his income (he certainly would not evade taxes the second time around), and we would not waste money keeping him in prison.

[paulthomascpa]

<removep...@yahoo.com> wrote

> he certainly would not evade taxes the second time around

I wouldn't bet on that.



--
Paul Thomas, CPA
www.paulthomascpa.com
Watkinsville, Georgia