Ten of the Most Disgraceful Tax Evasions in American History

Tax evasions cost the U.S. government approximately $460 billion per year and is an illegal activity in all developed countries. “Forgetting” to report income could result in a prison sentence. In this blog post, we’ve collected 10 examples of some of the largest tax crimes in American history.

 

Lauryn Hill, singer

In May 2013, Grammy-winning singer Lauryn Hill was sentenced to 3 months in a minimum security prison in Danbury CT. She was accused of failing to pay taxes on her income of more than $1.8 million for the period of 2005 to 2007. Ms. Hill claimed she was going to report her income but couldn’t afford to because of needing money to raise her 6 children.

 

 

Al Capone, gangster

When Americans hear the name Al Capone, the first thoughts that come to mind are that of violence, theft and tax evasion. Also known as Scarface, Capone was indicted for evading more than $270,000 (over $4 million in today’s dollars) of taxes and sentenced to 11 years in prison in 1931. Capone spent most of his sentence at the then-new Alcatraz federal penitentiary.

 

 

Willie Nelson, musician

In 1990, the IRS claimed that American music icon Willie Nelson owed about $32 million in unpaid taxes. He paid this debt in part and released the album called The IRS Tapes: Who’ll Buy My Memories?.

 

 

 

 

Wesley Snipes, actor

Having earned more than $38 million, Wesley Snipes failed to report his income and what is more, claimed a $12 million bonus refund. He cheated the IRS out of approximately $7 million and was sentenced to 3 years in prison and was ordered to pay a $17 million fine. He completed his term at McKean Federal Correctional Institution in Pennsylvania.

 

 

 

Ty Warner, businessman

In 1996, Ty Warner, owner of Beanie Babies toys, deposited about $80 million in an offshore bank account in Zurich, SZ. For the next 12 years Warner evaded taxes on his income of more than $25 million that he earned from that deposit. The punishment was a $53 million fine plus an additional $16 million in back taxes. Additionally, the Chicago court sentenced him to probation and community service.

 

 

O. J. Simpson, football player/actor

O. J. Simpson was sentenced to prison for 33 years (9 of which without parole) for kidnapping and armed robbery in Nevada. While serving his term at the Lovelock Correctional Center he was accused of tax evasion. Simpson owes more than $1.4 million to the IRS in back taxes.

 

 

 

Lindsey Vonn, ski racer

In April 2012, Lindsey Von, American World Cup alpine ski racer, was accused of failing to pay  $1.7 million in taxes. Ms. Von avoided being imprisoned by paying off the entire bill to the IRS. Despite the controversy, Von didn’t stop participating and winning multiple competitions.

 

 

 

Walter Anderson, businessman

In 2005, entrepreneur Walter Anderson was indicted for evading taxes. The income that Anderson failed to report for a 5 year period approached $500 million. This tax cheat was the biggest case against an individual in the history of the United States. Mr Anderson spent 2 years in the Washington, D.C. jail.

 

 

 

Leona Helmsley, businesswoman

Before going to jail, Helmsley Hotels owner Leona Helmsley said that she didn’t pay taxes because “only the little people pay taxes”. Ms. Helmsley evaded $1.2 million in taxes and was convicted of tax law violations in 1989. Leona served only 21 months of her original 4 year sentence.

 

 

 

Michael Oluwasegun Kazeem, Nigerian citizen

In November 2017, the list of the biggest tax cheat cases in American history added another name to its annals. A 24 year old Nigerian was indicted for tax crime and sentenced to 7 years in federal prison. Michael Oluwasegun Kazeem was accused of stealing more than $11 million from the IRS.

 

 

2018 Tax Season: Important Dates

2018 Tax Season: Important Dates

Tax form revisions and due dates falling on weekends make it easy to miss a filing deadline. PDFfiller team comprised this calendar for your convenience: have all the main due dates at hand and submit your tax returns on time.

Form 4070, Employee’s Report of Tips to Employer. Report more than $20 in tips every month.
10jan
Final estimated tax payment for 2017, if you’re not filing and paying your taxes by January 31st.
17jan
Individuals: filing 1040 and paying your tax. Businesses: sending out W-2 and 1099 to the recipients.
31jan
To continue exemption from withholding, provide a new copy of W-4 to your employer.
15feb
Form 4070, Employee’s Report of Tips to Employer. Report more than $20 in tips every month.
10mar
Partnerships: Form 1065, Schedule K-1 for partners. S-corporations: Form 1120-S, Schedule K-1
for stakeholders. Form 2553.
15mar
Form 4070, Employee’s Report of Tips to Employer
10apr
Individuals: Form 1040, 1040A or 1040EZ and pay any tax due; Schedule H. Corporations: Form 1120 and pay any tax due; Form 4868, filing a federal extension; Contribution to a retirement plan. Estimated tax payment for the first quarter of 2018; Filing deadline for most states.
17apr

Fill Out Your Tax Returns and Submit them Electronically!

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Tax Form Filing: Due Dates for Tax Season 2018

Tax Form Filing: Due Dates for Tax Year 2017

Tax form revisions and due dates falling on weekends make it easy to miss a filing deadline. PDFfiller team comprised this calendar for your convenience: have all the main due dates at hand and submit your tax returns on time.

Basic Forms

Form W-2

31jan
Form W-2
Electronic or Mail
January 31th, 2018

Fill out online

Form 1099
Form 1099
MISC
March 15th, 2018

Fill out online

Form 1065

15mar
Form 1065
Partnerships
March 15th, 2018

Fill out online

Form 1120S
Form 1120S
S Corporations
March 15th, 2018

Fill out online

Form 1040

17apr
Form 1040
Individuals
April 17th, 2018

Fill out online

Form 1041
Form 1041
Trusts and Estates
April 17th, 2018

Fill out online

Form 990 Series

15may
Form 990 Series
Tax Exempt Org
May 15th, 2018

Fill out online

Form 5500 Series

30jul
Form 5500 Series
Employee Benefit Plan
July 31th, 2018

Fill out online

Extended Forms

Form 1065

17sep
Form 1065
Extended Return
September 17th, 2018

Fill out online

Form 1120S
Form 1120S
Extended Return
September 17th, 2018

Fill out online

Form 1041

1oct
Form 1041
Extended Return
October 1st, 2018

Fill out online

Form 1120

15oct
Form 1120
Extended Return
October 15th, 2018

Fill out online

Form 1040
Form 1040
Extended Return
October 15th, 2018

Fill out online

FinCEN 114
FinCEN 114
Extended Return 1040
October 15th, 2018

Fill out online

Form 990 Series

15nov
Form 990 Series
Extended Return
Nov 15th, 2018

Fill out online

Form 5500 Series
Form 5500 Series
Extended Return
Nov 15th, 2018

Fill out online

Fill Out Your Tax Returns and Submit them Electronically!

Fill out online
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Instructions for IRS Form 1042-S: How to Report Your Annual Income

US foreign taxpayers use IRS Form 1042-S, officially known as the Foreign Person’s U.S. Source Income Subject to Withholding, to report state and federal income. If you are a nonresident alien earning income that is not reported on your W-2, you must file a 1042-S form. The IRS issues this form to individuals annually. Filing a 1042-S is not possible until you’ve submitted all other tax forms used for reporting your United States income. Some US foreign taxpayers are issued a 1042-S while others may receive a W-2 and some taxpayers may be requested to file both.

Who Files IRS Form 1042-S?

Form 1042-S must be filed by every withholding agent to declare income received for the previous year. Payments that must be reported are determined under the Amounts Subject to Reporting on Form 1042-S. If you are an individual withholding agent and the payment you’re making is not the part of your business or trade, you should not report it on your 1042-S.

There are four copies of the form used for different types of income subject to tax withholding:

  • Copy A is for use by the IRS.
  • Copy B is for the recipient.
  • Copy C must be attached to any federal tax return filed.
  • Copy D must be attached to any state tax return filed.

When submitting IRS Form 1042-S you must also prepare Form 1042, known as the Annual Withholding Tax Return for U.S. Source Income of Foreign Persons. Check the instructions for preparing both of these documents on irs.gov.

What is IRS Form 1042-S Used for?

This IRS form is used to report income types such as scholarship or fellowship, award or non-employee payments, salaries paid to employees who requested some treaty benefits, payments to contractors who worked for some time in the U.S. and royalty payments made to entities or individuals.

If you’re planning to report federal payments made to foreign individuals that are subject to tax withholding, IRS Form 1042-S must be used. The form may also be used to report compensations or distributions from trusts to expatriates.

How to Complete IRS Form 1042-S?

On Form 1042-S it is required to indicate the following information: income code, gross income, tax rate, net income, withholding allowance, federal tax withheld, personal information about the withholding agent, recipient’s account number, date of birth and other relevant information. To determine which income code to indicate, check the IRS website.

When to File IRS Form 1042-S?

You must submit your 1042-S to the Internal Revenue Service by March 15th, 2018.

How to Dramatically Increase your Credit Score in a Few Simple Steps

The majority of Americans depend on credit to pay for their expenses. According to the Federal Reserve, there are 333.6 million credit cards being used in the U.S. Also, according to the consumer credit reporting agency Transunion, 71% of all adults have credit cards, with the average credit card debt per adult being 5,327 dollars. As Americans become more reliant on credit, it is important to understand the importance of a credit score and the various ways that it can be increased.

 

Credit Utilization Ratio

One of the most effective ways to improve your credit score is to lower your credit utilization ratio. A credit utilization ratio is the amount of credit used compared to the credit limit. In simple terms, as your credit card utilization goes up, your credit score goes down. According to myFICO, 30% of your credit score is based on how much you owe creditors. You want to make sure your credit utilization ratio does not exceed more than 30%. Keeping a credit utilization ratio of 30% or lower shows that you don’t rely too heavily on credit to pay for day to day expenses.

 

Make Smaller Payments

Making smaller payments several times a month and paying a little more than you owe instead of waiting till the last day before your payment is due is another way to lower your credit utilization ratio. Paying what you owe with these “micropayments” shows credit bureaus that you are not only making your payments on time, but that you are also paying a little more than the bare minimum of your required monthly payments. This method will help keep your credit utilization ratio low.

 

Raise your Credit Limit

Imagine you have a credit card with a credit limit of 1000 dollars, but you have already used 500. This means your utilization ratio is 50% and will therefore lower your credit score. But if you ask your lender to raise your credit card limit to 2000 dollars, your credit card utilization ratio will drop to 25%.

 

Payoff your Highest Utilization Ratio Balances

Let’s say you have two credit cards with a credit limit of 1000 dollars. One of your cards has a credit utilization of 20%, while your other card is maxed out at 1000 dollars. It is more important to pay off the debt of the maxed out card first, because it has a utilization ratio of 100%. A utilization ratio of 100% looks bad to credit bureaus and will therefore lower your score. The credit card with a utilization ratio of 20% is below 30% and is currently in good standing. Taking care of the credit card with the highest utilization rate first means that your utilization ratio for that card will decrease and over time and your credit score will improve.

 

Debt Consolidation Loan

Taking out a loan to pay off several cards with high utilization ratios will lower your credit utilization ratio for those cards. The only thing you will have to worry about is that single line of credit from the loan you took out. As long as you make those loan payments on time, in combination with your low credit utilization ratio, your credit score will begin to increase.

 

Keep Old Accounts Open

It’s a good idea to let old accounts get older. Even if you have paid the balance owed on a certain credit card, that card is still included in your credit utilization ratio. If you have two cards with a credit limit of 1000 dollars, and one of them is completely paid off, while the other has a balance of 500 dollars, your credit utilization ratio will be around 25%. But if you close the card that is fully paid, that means that it is no longer included in your credit utilization ratio and therefore your ratio will jump to from 25% to 50%.

 

Become an Authorized User for Another Card

If you know someone with an excellent credit score and low utilization ratio, you could ask to be an authorized user on their credit card. If that person agrees, that card will be factored in to your credit report. Assuming the card has a very low utilization ratio and you keep it that way by not using it, your credit score will rise.  

Taking out loans and applying for credit cards can require a lot of paperwork. Instead of filling out physical forms that are sent to you via fax or email, try using an online, cloud based, document management platform such as PDFfiller to receive and send out documents quickly and easily.