Most of what you've read online about IRS problems is wrong, or at least misleading. I'm Darrin Mish. I practice tax law in Tampa and I've been doing this for 32 years. Here's what's actually true.<\/p>\n
With the April 15 deadline having just passed, almost everyone is still all too conscious of tax matters, in particular tax returns. As such, the following story would appear doubly ironic and a case of \u2018Physician, heal thyself\u2019.<\/p>\n
Since 2001, Andrea Fabiana Orellana has worked as an IRS Revenue Officer whose duties included \u2018collecting delinquent taxes, surveying unreported taxes and securing delinquent returns\u2019 as stated in her job description. She should have added her own name to her list of delinquent taxpayers because Orellana herself was found to have unreported incomes from almost 2,000 transactions at the online auction site, Ebay.<\/p>\n
It was discovered that Orellana failed to disclose $41,842 in Ebay income in 2004 and 2005 arising from her sales of designer clothes, shoes and other personal items. As a result of this, Orellana has to pay $12,428 in unpaid taxes and $2,486 in penalties. Her case has been filed in the US Tax<\/a> Court. According to the Tax Court papers, Orellana sold items under various names including \u2018BlackTheRipper\u2019.<\/p>\n When the IRS pressed her for official receipts and proof of costs, Orellana facetiously claimed that she never kept receipts. \u201cThat would be ridiculous, unheard of. Unless there was some really bizarre reason why I kept a receipt, there were no receipts,\u201d court documents quoted her as saying. The Tax Court found her attitude towards her own tax returns \u2018cavalier\u2019.<\/p>\n Orellana, who resided in California at the time, claimed in court documents that she liked to shop for designer wear and whenever she needed to create some space for new purchases, she would sell off her used clothes and accessories. She further elaborated that she never perceived her activities on Ebay as a business but rather were akin to an online garage sale which she held intermittedly in order to clean out her closets.<\/p>\n Orellana could not be reached for comment.<\/p>\n When contacted, Ebay reiterated its policy that all sellers are responsible for paying their own federal and state taxes on their earnings. The online auctioneer declined to comment on Orellana\u2019s case specifically. Likewise the IRS has also made no comments on this matter. A report on the Tax Court ruling was carried in TaxProf Blog.<\/p>\n According to IRS Commissioner Doug Shulman, the government agency collected tax returns from 144.1 million individuals last year. However, Shulman went on to disclose to Congress that about $290 billion in taxes was not collected due to various reasons.<\/p>\n Orellana\u2019s case in the Tax Court is Orellana v. Commissioner, T.C. Summ. Op. 2010- 51, U.S. Tax Court (Apr. 20, 2010).<\/p>\n