Archives for May 2010

Kevin Mitchell, former San Diego Padres baseball slugger, owes $5.3 Million in Back Taxes to California

Homerun-bashing San Diego Padres bad boy Kevin Mitchell, a member of the 1986 World Series champion New York Mets and the 1989 National League MVP, owes more than $5.2 million in delinquent state taxes, records in California show. Kevin Mitchell was paid an estimated $20 million during a 14-year major-league career with the Mets, San Diego Padres, San Francisco Giants, and five other teams. Mitchell, a native San Diegan and now 48, had a stellar career early on with the Mets and Padres. Kevin Mitchell needs today to find real tax relief in California.

San Diego Padres Slugger Kevin Mitchell Busted For Back Taxes By The California Franchise Tax Board

Kevin Mitchell Busted For Back Taxes By The Franchise Tax Board

Clearly, Mitchell mismanaged his baseball earnings with a combination of bad business management and poor tax planning. If Kevin Mitchell had come to the tax experts at the Tax Resolution Institute, he could have found a positive combination of preventive measures and tax relief solutions. Today, with the huge state tax debt and the bad publicity, Mitchell could still find real tax relief at the Tax Resolution Institute.

Kevin Mitchell was paid an estimated $20 million during a 14-year major-league career with the Mets, San Diego Padres, San Francisco Giants, and five other teams. Mitchell, a native San Diegan and now 48, had a stellar career early on with the Mets and Padres.

Kevin Mitchell was known as a bad boy because he is the only known player to be accused of decapitating a cat. Mets pitcher Dwight Gooden wrote in his 1999 autobiography, Heat, that he witnessed Mitchell decapitate his girlfriend’s cat with a 12-inch knife. Mitchell denied it, but his bad karma could be catching up with him.

Kevin Mitchell, however, is not the only San Diego resident to wind up on California’s list of the worse tax debtors. In fact, when the California Franchise Tax Board released its list of major individuals and corporations with the largest tax delinquencies, three of the top eight are from San Diego County. They are Jeffry C. Howard, $5.4 million, fifth; Kevin Mitchell $5.2 million, sixth, and Michael Fanghella $4.1 million, eighth. Since they are all personal income tax delinquencies, Kevin Mitchell finds himself right in the middle of the list of San Diego’s worse delinquent taxpayers.

Former San Diego Padres Slugger Owes California $5.2 Million In Back Taxes

Former San Diego Padres Slugger Owes California $5.2 Million In Back Taxes

Since San Diego is right in the Tax Resolution Institute’s backyard and some of our most respected tax experts work and practice in San Diego, San Diegans like Kevin Mitchell with severe tax problems should contact the Tax Resolution Institute. The tax experts at TRI can find tax relief and real tax solutions for severe tax problems.

Expansion of the Enterprise Zone in the San Fernando Valley Generates Unexpected Payroll Tax Problems

When California officials approved the request by Los Angeles to expand the city’s “enterprise zone” in the San Fernando Valley, they failed to foretell the challenges of business growth in a down economy. As new and existing businesses receive tax breaks, they can expand too quickly, leading to sudden financial challenges and payroll tax problems. Although supportive of business growth, the Tax Resolution Institute warns businesses to go slow upon receiving tax breaks in a down economy.

San Fernando Valley Enterprise Zone Leads To Both New Tax Breaks and Payroll TaxProblems

San Fernando Valley Enterprise Zone Leads To Both New Tax Breaks and Payroll TaxProblems

When financial pressure rises in a recession, a company will often make the mistake of stealing from Peter to pay Paul by withholding their mandatory Payroll Tax payments and holding on to the employee Trust Fund. Rarely a criminal act, the belief by the business owner is that they will make up the payments that they have missed in the future. Since the Trust Fund Recovery Penalty of the IRS is 100% of the Trust Fund, such illegal acts can lead to the closing of the doors of a once successful business. Although expanding and building on existing businesses is important, it is essential not to allow a government stimulus package to foster undue optimism. Rather, the Tax Resolution Institute recommends a careful and balanced approach to financial management and tax planning.

The California Enterprise Zone Program targets economically distressed areas, providing tax breaks and other incentives to attract new businesses and foster job creation. Under the program, firms can earn state tax credits for hiring additional employees, receive sales tax credits on purchases of $20 million per year of machinery, receive preference on state contracts and receive a 35% cut in city utility rates for five years. The expansion area includes portions of Chatsworth, Canoga Park, the Van Nuys Airport area, Woodland Hills and the northeast Valley.

William Roberts, director of the San Fernando Valley Economic Research Center, supports the idea of enterprise zones. However, in a recessionary economy, encouraging job creation can lead to other problems for struggling companies. Roberts believes that the problem is, “…when you get down to the fine print, how much freedom you have. That’s really where the meat of how well it works is going to show up.”

Enterprise Zone in Woodland Hills and the Possibility of Payroll Tax Problems

Enterprise Zone in Woodland Hills and the Possibility of Payroll Tax Problems

Bruce Ackerman, president of the Valley Economic Alliance, disagrees, estimating that several hundred jobs have been saved in the east value by helping distressed companies: “This is a coup for the Valley. With the economy softening and their opportunities to relocate elsewhere, there will be a great opportunity for them to keep their companies in the area and an incentive for them to grow.”

Companies in the zone will also get sales and tax income credits for buying machinery or equipment as well as faster expensing of equipment. Interest on loans will be decreased and they will get priority bidding on state contracts. “Any time you’re giving a business an incentive to move to an area, it happens, and it works,” said Stuart Waldman, president of the Valley Industry and Commerce Association. “If somebody is looking at moving to Burbank or an area without an enterprise and an area with enterprise, they’re going to move where they can get the best bang for their buck.” Clearly such trends had been happening. The Woodland Hills business district, which is home to a large number of finance, insurance and real estate companies, was particularly affected as those industries posted a 10 percent drop since 2008, according to the American Community Survey by the U.S. Census Bureau.

California Enterprise Zones in a Recessionary Economy

California Enterprise Zones in a Recessionary Economy

The Tax Resolution Institute Agrees with Bruce Ackerman when he explains that the expansion of the Enterprise Zone “…gives us the ability to retain existing businesses that may be considering moving from the Valley and enhances our ability to attract new businesses from outside of the state.” At the same time, with Payroll Tax cases rising, both the IRS and California Employment Development Department are  going after delinquent payroll taxes with a renewed focus, businesses that receive tax breaks must be careful to expand with a plan based in careful financial management and tax planning.

Poker Superstar Michael Mizrachi Has A Tax Lien Filed Against Him By The IRS And Owes $339,000 In Back Taxes

Poker Star Michael Mizrachi Owes Back Taxes

Poker Star Michael Mizrachi Owes Back Taxes

Michael “The Grinder” Mizrachi finds himself in a real serious bind these days.  The Sun Sentinel out of Fort Lauderdale reports that Mizrachi owes $339,000 in back taxes and had a tax lien filed against him by the IRS. In addition, Mizrachi lost his Hollywood, Florida home to foreclosure via an online auction last week.  Another home in Miramur was foreclosed on and sold as well, according to court records. Both properties were assessed this year at less than half of their purchase price. If Mizrachi had contacted a tax professional before the back tax debts with the IRS got out of control, he could have possibly saved the houses and avoided the bad press of the IRS tax lien filed against him.

Commenting on the matter, Michael Mizrachi would only say that his previous accountant was “doing a bad job” and that he had now “hired a better one” and was working on settling the liens. What Mizrachi needs is the  Financial stability is always going to be important to a poker player, as they are then able to focus their attentions on playing the game without all the extra pressures associated with cash flow problems.

Mizrachi’s tax attorney, Steven Chung, said, “Mr. Mizrachi is a victim of the real estate collapse and the recent recession. We are working to resolve his current situation, which was caused by the negligence of his previous professional advisors. We appreciate that several of his creditors, including the Internal Revenue Service, have been understanding and flexible.”

Mizrachi is part of Team, one of the biggest online poker rooms. From 2005 through 2007, Mizrachi was one of the top players in the game. After signaling the presence of a new star in the poker world by earning $325,000 in 2004, Mizrachi exploded in 2005 by finishing fifth at the World Poker Tour’s Jack Binion World Poker Open and winning the WPT’s L.A. Poker Classic less than a month later. The two final tables earned “The Grinder” over $2 million and pushed Mizrachi to cash seven times at the World Series of Poker that year. According to the HendonMob Database, Mizrachi has $7.1 million in tournament earnings in his career.

Michael Mizrachi's Poker Fame Does Not Stop The IRS

Michael Mizrachi's Poker Fame Does Not Stop The IRS

Mizrachi was active, however, in “swapping” pieces with other players in the poker community. The practice of “swapping,” where a player puts up a percentage of another player’s buy-in and earns that percentage back when a player cashes in a tournament, is something commonly done by poker players to hedge their expenses. The problem with the practice, as is known by poker players, is that the tax burdens go entirely to the winning player and the person who is on the other end of the “swap” doesn’t have any income taxes taken from his piece.

Mizrachi admits that he engaged in this practice and estimates that of the approximately $6.7 million he won from 2004 to 2007, approximately $3.7 million went to backers and “swapping” deals. As a result, Mizrachi owed a lot of taxes to the IRS on money that he was never able to actually bank. As time passed and he took no action, his tax debts led to tax liens and financial chaos.

Fellow poker pro Marc Levy of Boynton Beach pointed out the financial difficulties faced by many professional poker players these days, away from the glamorized media reports. As he explains: “If you’re in a $10,000 event every other week, that’s $240,000 just for buy-in, not to mention all your expenses. There are plenty of guys I know who do well playing poker but still go through their money.” Since professional poker players’ careers swing up and down in dramatic fashions, they often approach tax time with no money left to pay their income taxes. At this point, the job of a smart poker player is to leave the table and contact a smart tax professional like the tax experts at the Tax Resolution Institute.

If you’re facing an IRS Tax Lien, whether you’re a poker pro or not, the Tax Resolution Institute can help. Call 800-401-5926 today.

IRS Bounty: Connecticut Lawyer Convicted of Tax Evasion For Failing To Pay Income Taxes

David Thomas tried to outsmart the IRS by failing to report more than $120,000 in income. On May 14, long after the IRS had uncovered the lawyer’s extensive tax evasion in 2004 and 2005, U. S. District Court in Connecticut sentenced Thomas to three years of probation. Thomas, who has resigned from the practice of law, must pay over $80,000 in back taxes, penalties and interest. In addition, Thomas, 56, was ordered to perform 150 hours of community service after he pleaded guilty to one count of filing a false federal tax return.

Lawyer Sentenced For Federal Tax Evasion

Lawyer Sentenced For Federal Tax Evasion

If David Thomas had been honest and hired a tax professional, he could have avoided the sentence by being a respectable citizen and paying his taxes on time.  Nonetheless, the Tax Resolution Institute is aware that sometimes tax day comes and you do not have enough money on hand to cover your income taxes. Rather than lie to the IRS and commit the crime of tax evasion, call the Tax Experts at TRI. We can help you find a solution that will protect your reputation and help to ensure your future financial viability.

In the case of David Thomas, he simply tried to pull a fast one on the IRS. From 2004 to 2005, Thomas was hired by the Cedar Island Improvement Association to provide legal assistance. Cedar Island Improvement was installing an underwater pipe connecting the Town of Clinton and Cedar Island. During his time on the project, Thomas received $120,877 from the Association. For the tax years 2004 and 2005, however, the lawyer’s federal tax returns did not reflect the amount earned. In fact, the overall adjusted gross income was shown as zero in the tax returns that Thomas filed.

IRS Prosecutes Lawyer For Evading Back Taxes

IRS Prosecutes Lawyer For Evading Back Taxes

By committing the crime of tax evasion, Dave Thomas has lost his profession, his reputation and his ill-gained assets. If you owe back taxes and cannot cover the bill, do not make the mistake that Thomas made. The Tax Resolution Institute specializes in helping find tax relief for individuals with huge income tax bills and delinquent back taxes owed to the IRS.

With A Tax Lien Filed Against Him In 2009, Rush Hour Star Chris Tucker Has A $3.6 Million Tax Bill In California

According to the Detroit News, less than a year ago, Chris Tucker, the Rush Hour star, had a $3,594,409 tax lien filed against him by California tax officials in Sacramento County Court. Tucker owes the taxes for the years 2001-02 and 2004-07 when he was actually making movies. Since he has not made a film since Rush Hour 3, it is hoped that Tucker saved enough from his $20 million dollar pay days to cover the tax lien. If not, the Rush Hour star with a criminal history could find some of his expensive luxury assets seized or he might have to have an auction like boxer Thomas Hearns to cover the tax bill. With a criminal history, Tucker needs to put these problems behind him.

Tax Lien Filed Against Chris Tucker

Tax Lien Filed Against Chris Tucker

Tucker is the latest celebrity to be named and shamed as indebted to the already financially struggling state. Finding fame in Friday with Ice Cube and the Rush Hour films with Jackie Chan, Tucker became infamous for being extremely difficult to work with on a movie set, throwing tantrums and screaming fits. Even though he has made millions in earnings he has failed to be compliant with California tax laws for several years now and that has just all caught up with him.

Since California is in such a drastic financial crisis, they are coming after delinquent taxpayers with a vengeance. The California Franchise Tax Board has been given a mission to collect all delinquent tax bills owed so they can help the state rescue itself from the financial crisis. Supposedly, Tucker has been talking to Ice Cube about starring in a third movie to complete the Friday. In addition, it has been rumored that Quentin Tarantino wants to make a war movie with Tucker and Brett Ratner is developing a film with Tucker about the personal valet to Frank Sinatra.

Chris Tucker Owes Back Taxes To California FTB

Chris Tucker Owes Back Taxes To California FTB

Without question, Tucker should hop on one of these movie roles and restock his finances. In addition, he should contact a tax professional like the tax experts at the Tax Resolution Institute. Beyond having experience helping high profile celebrities with tax problems, TRI knows how to provide wealthy individuals with effective financial and tax planning so nothing bad happens in the future. With a strong hand at the wheel, Chris Tucker’s financial life can steer right back on track.

Titanic Star Billy Zane Has A State Tax Lien For Over $115,000 Filed Against Him In California

Although Billy Zane achieved world-wide fame for playing the bad guy opposite Leonardo Dicaprio and Kate Winslet in the blockbuster James Cameron film, Titanic, the actor is sinking after crashing into a California Franchise Tax Board iceberg. California tax officials filed a state tax lien against Billy Zane after he fell behind on his payments concerning a back tax debt. As a result, the actor is in a serious tax crisis in regards to his delinquent state tax bill to the California Franchise Tax Board.

California Tax Lien Filed Against Billy Zane

California Tax Lien Filed Against Billy Zane

The Titanic co-star has had the state tax lien filed against him, accusing the actor of owing $116,578 in delinquent taxes. The demand was submitted by California tax bosses in the Los Angeles County to the LA County Recorder of Deeds on March 10, 2010. First reported by Perez Hilton on his tabloid gossip site, the tax lien against Billy Zane is one more example of Hollywood royalty failing to cover their tax bills and having their delinquent taxes lead to legal action by the state tax authorities.

Having recently starred in the ABC series, The Deep End, and rumored to be preparing for his directorial debut, Zane has made no comment in response to the tax lien. In a recent appearance at an Awards Ceremony in Los Angeles, Billy Zane was happy to discuss his debut behind the camera, but avoided answering any questions about the tax lien.

On April 16, speaking at the opening night of the Beverly Hills Film Festival, the Titanic star revealed he was directing a film set in France. He said: “I’m just putting the final touches to [my] directorial debut. [It’s] about a French farce diamond-heist.” Although he was willing to discuss a fictional heist, he would not venture an opinion on his tax heist against California when the state is in real financial crisis.  When asked about the debut of his film, Zane laughed: “Hopefully we’ll see it shortly, I don’t know if it’ll be here, but somewhere.”

The Weight of a State Tax Lien

The Weight of a California FTB Tax Lien

If Billy Zane does not contact a tax professional like the tax experts at the Tax Resolution Institute, his California Tax Lien could be turned into a bank levy. As a result, he might not be able to show his film in the United States since it could even be seized as a possible asset, although such an asset seizure remains unlikely. Since the bill is not beyond the actor’s ability to pay it, Billy Zane should have the Tax Resolution Institute negotiate an Offer in Compromise on his tax debt and pay the delinquent tax bill off so the state tax lien can be removed. Only then, can Billy Zane avoid the tax iceberg of his nightmares and sail into the clear waters of future success as both an actor and a director.

Payroll Taxes and the Threat Against the Tax-Exempt Status of Non-Profits

Without question, nonprofits provide important services that improve the lives of individuals, families, and communities. From large social service and cultural organizations to small community health centers and food pantries, nonprofits occupy a unique position in the American economy and society at large. As a result, the sector was designed, by its nature, to be tax-exempt, allowing organizations to maximize their impact.

Nonprofits already are under enormous strain to cover their payroll taxes without losing workers and reducing services. Nationally, 14 million people work for nonprofits — that’s seven percent of all jobs in the U.S. One has to consider whether increased tax revenue is more beneficial than the economic stimulation provided by a higher employment rate. Not to be forgotten, nonprofits already pay billions in ordinary payroll taxes.

Nonprofits & Payroll Taxes

Nonprofits & Payroll Taxes

Imposing new taxes on the nonprofit sector is a slippery slope. Consider the Metropolitan Transit Authority (MTA) payroll tax in New York that was established last year to supplement the MTA budget actually applies to nonprofits as well. As a result of the new payroll tax, the local New York YMCA currently owes $200,000. Just think of the services that could be provided with that $200,000.

That tax-exempt status of nonprofits, however, is in jeopardy across the board as state governments consider eliminating the tax exemption for nonprofits. The national trends are alarming. Recent tax proposals that will significantly impact nonprofits include:

1) Two dozen mayors in Pennsylvania recently lobbied the state legislature for authority to extract new revenue from nonprofits through reimbursements for tax-exempt properties.

2) Boston and some other municipalities have reached “voluntary” agreements with nonprofits, making them “donate” funds to cover municipal services.

3) City officials in Honolulu are considering proposals to close budget shortfalls by imposing property taxes on nonprofits.

By imposing new taxes on nonprofits, policy-makers have forgotten why the tax exemption was put in place: nonprofits provide a service that relieves some burden that would otherwise fall to federal, state, or local government. Put differently, the government relies on nonprofits to serve community needs that the government cannot, or chooses not to, address on its own. These services are even more important during tough economic times, as government funding is reduced and demand for services increase. Over the past two years, the nonprofit sector has stepped up time and time again to provide essential services. Now is not the time to add additional pressures to the fragile fiscal state that many nonprofits are in.

Tax-Exempt Status

Tax-Exempt Status

Do we need to find a way to draw down our national and state debt levels? Absolutely. But taxing nonprofits is not the answer. Every dollar reallocated to pay a tax burden is one dollar less that a nonprofit will have to provide much needed programmatic services. With the current trend being fewer charitable dollars and an exponential increase in the need for services, taxing nonprofits simply will exacerbate this phenomenon.

To tax nonprofits and to raise the percentage of payroll taxes paid by nonprofits is to play with fire. The sector has been hit hard by the recession, grappling with increased demand and decreased revenue. Many well-run organizations have had to close their doors because of economic hardship. On top of the 0.34 percent MTA payroll tax, the New York state legislature has considered additional changes and other governments continue to explore and contemplate taxes on nonprofits. For a sector that provides vital services that the government does not, state legislatures would do well by taking a hard look at the consequences of such action.

Orange County Billionaire’s Son Owes Over Two Million Dollars In Delinquent Income Taxes

When the California Franchise Tax Board released the annual list of the top 250 taxpayers with the highest state income tax liens, former Grand Prix Racing champion Steve Bren finished in the 18th spot. The son of billionaire Irvine Co. chairman Donald Bren, Steve and Cynthia Bren owe $2,209561.23 in personal income tax to the state of California and the state tax lien was filed on March 20, 2009. With California in a financial crush, the Franchise Tax Board is going after delinquent taxpayers with a renewed focus. By failing to contact a tax professional like the tax experts at the Tax Resolution Institute, Steve Bren allowed his private tax problem to become a public tax crisis. Now Steve Brin needs real tax relief.


Steve Brin Finishes As The 18th Top Delinquent Taxpayer in California

Steve Brin Finishes As The 18th Top Delinquent Taxpayer in California

Then again, Steve Bren is no stranger to crisis, and he has put his family through their fair share of scandal in the recent past. Although Bren’s Irvine-based Bacchus Development firm billed itself as “one of the premier commercial real estate firms in Orange County, they were forced to file for Chapter 11 bankruptcy last September. In addition, bad boy Steve Brin was facing drug possession, domestic violence and trespassing charges in Malibu. Since he is turning 50 next year, Steve Brin has gone from being a bad boy to being the black mark that stains the legacy of his family name.


Steve Bren felt abandoned by his successful father as a boy, and he once told an interviewer, “We were brought up without anything — anything.” He found his own success on the car racing circuit, becoming a two-time Long Beach Grand Prix winner. Although he qualified for the Indianapolis 500, he could never find a car for a qualifying run, and the billionaire father would not support the car-racing hobby of his son. Although he briefly worked for his father, Steve Bren found his own avenue to success when he opened the Newport Auto Center luxury car dealership in 1987.


The legal troubles of Steve Bren developed side-by-side with his newfound business success. He was caught with eight street-illegal Porsche Speedsters on the dealership back lot and was tagged for violating environmental laws. Eventually, the lot was sold to a company owned by billionaire Wayne Huizenga in 1994.


Billionaire Donald Bren's Son In Tax Trouble

Billionaire Donald Bren's Son In Tax Trouble

After the recent bankruptcy of Bacchus, Donald Bren announced in a statement issued by the Irvine Co: “I sympathize with Steve… like many fellow Americans, overwhelmed by these extremely challenging financial circumstances…. I wish Steve nothing but the best as he works though this very difficult period.” The father remained silent in terms of the recent criminal charges. The Malibu court sentenced Steve Brin to both domestic violence counseling and drug counseling. If he finishes those counseling programs successfully, the charges will be dropped.


The same result cannot be said to be a possibility when it comes to the Franchise Tax Board. As California’s 18th most delinquent taxpayer, Steve Bren will have to find a way to cover his tax bill in order to have the state tax lien lifted. Without the removal of the lien, his financial future and business life remain in permanent limbo.


By relying on the tax experience and the tax expertise of a company like the Tax Resolution Institute, Steve Bren could find actual tax relief and a solution to his tax problems. Since his billionaire father clearly is not swooping in for the rescue, Steve Brin will have to reach out for professional tax help.