The tax-relief industry loves to make IRS problems sound impossible without them. They're not. I'm Darrin Mish. I've been representing taxpayers before the IRS for 32 years. Let me explain how this actually works.<\/p>\n
Blytheville Owes IRS $2 Million<\/p>\n
The City of Blytheville is in debt to the IRS by at least $2 million due to unpaid payroll taxes in 2009 and 2010. \u00a0This figure is set to balloon even more when penalties and interests are included. \u00a0City Mayor James Sanders, who took over the post from Barrett Harrison in 2011, said he was contacted by the IRS over \u2018possible discrepancies\u2019 with its payroll taxes in March. \u00a0When investigations were conducted by the city, it was discovered that they owed at least $2 million but they haven\u2019t received a bill from the IRS. Roof Repair Expert in Tax Trouble for Underreporting Taxes<\/p>\n Philip Hines, 38, who runs Hines Roofing in Lebanon pleaded guilty before Senior US District Judge Herman J. Weber in District Court in Cincinnati of underreporting his taxes. \u00a0Lying about how much he really earned, Hines claimed to have made just $663,000 between 2003 and 2006 when in actual fact, he made in excess of $1.2 million in that period, underreporting by more than $546,000.
\nStrangely, Shirley Overman, the city\u2019s Finance and Purchasing Committee chairman admits she does not know how this could have happened. \u00a0She said, \u201cWe don’t feel it was just an oversight. \u00a0It could be that it was not having the money to make payroll and payroll taxes at the same time, and then it just kind of ballooned,\u201d adding that, \u201cWe’ll just keep investigating this.\u201d
\nAccording to Overman, when the IRS initially contacted the city, it told city officials that the city owed for payroll taxes from 2007-2010. \u00a0But Overman adds that the \u2018proper paperwork\u2019 was not submitted for the years 2007 to 2008 and when it was finally filed, the city only owed taxes for 2009 and 2010. \u00a0The city is current on its payroll taxes in 2011.
\nCurrently an audit is being conducted on the city and it is unclear when the issue with the IRS would be resolved.<\/a> \u00a0The city has hired a law firm to represent it in negotiations with the IRS. \u00a0\u201cThe only thing I can tell you is that we place safeguards in this administration to oversee and make sure all withholdings are done,\u201d Sanders said.<\/p>\n
\nHines instructed some of his customers to pay him in cash or in checks made out to his personal name rather than his business. \u00a0If paid by check, he would cash them at his customers\u2019 banks and not his own to circumvent paper trails of how much he earned. \u00a0Certain invoices were tagged \u2018Cash No Taxes\u2019 to indicate which income was to be concealed from the IRS.
\nHines faces up to 3 years in prison and a fine of up to $250,000.<\/p>\n