Las Vegas taxes: Family facing trouble with massive tax debt
With the maze of confusing IRS laws out there, many Las Vegas residents find themselves falling into significant tax debt, sometimes even when they dispute the validity of that debt. One prominent Nevada family is experiencing this scenario after being accused of owing over $500 million in tax debt, after allegedly continuing to use a tax shelter strategy that had been outlawed. Authorities accuse the family’s accountants of telling staff members to create fake tax records in hopes of encouraging the IRS to settle the debt in a manner favorable to the family’s interests.
A former CEO at the company is now suing the family and claims that many of their projects could have broken both several tax and banking laws. The man claims he has spoken to the FBI and IRS about the family and he believes they are being investigated for several things including mortgage fraud, environmental malfeasance, and physical threats. A spokesman for the family denies the man’s tax allegations and claims the former CEO is only trying to save himself from potential prosecution by leveling these accusations against the family who once employed him.
The family allegedly used a now outlawed tax strategy called ‘SC2.’ The strategy allows companies to move money that could cause huge tax liabilities to tax-exempt organizations in order to claim tax breaks. However, this strategy was deemed abusive by the IRS in 2004 and it was then determined that no tax benefits received by using the strategy would be allowed. In 2009, one of the family’s chief financial officers allegedly told accountants to write off one of their multimillion dollar projects improperly in order to make it appear as if the company had more debts than assets. Authorities believe this action was meant to intentionally deceive the IRS and mislead them about the nature of the company’s financial situation.
Anyone can fall into significant tax debt. While the majority of Las Vegas residents and business owners won’t experience this level of tax debt, many individuals and families struggle with high tax bills that are unexpected or disputed. Those who wind up with overwhelming tax debt have options available to them. Understanding one’s rights pertaining to the sometimes confusing federal and state tax laws can help them deal with a stressful situation before it becomes unmanageable.
Source: MercuryNews.com, “Seenos accumulated $500 million IRS tax debt, former business partner says,” Matthias Gafni, Aug. 21, 2012