When a Tax Refund is Not a Blessing

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If you received a half a million dollars in tax refunds, would it please you? It would if you were not Jack Abramoff. The imprisoned lobbyist is serving time in a federal penitentiary in Maryland for orchestrating a fraud against Indian tribes and some other groups. The IRS recently refunded $520, 189 for taxes overpaid by Abramoff before he went to jail for influence peddling. Much of the tax refund money has been utilized to pay off various debts such as fees to accountants and lawyers, living expenses for Abramoff’s wife and five children and to repay a loan from Abramoff’s father.  Click here to watch or read more information on IRS Back Taxes.

What infuriated prosecutors was that none of the tax refund was used to pay restitution of $23 million that the court handed down to him for his crime. This prompted US District Judge Ellen Huvelle to step in to order how the remaining $175,000 was to be disbursed. Out of this amount, $50,000 would go towards paying back taxes to the state of Maryland, $22,000 would be for property taxes to Montgomery County, Md., and $5,000 would pay for the private Hebrew education for Abramoff’s 16-year old twin children.

After these payments, Abramoff would be left with about $98,000. Judge Huvelle ordered the defense legal team and the Justice Department to draw up a plan on how to spend this remaining amount. The judge ordered that any further expenditure of money received must be approved by her first. She also ordered Abramoff’s lawyers to inform her of any further tax refunds or any other payments Abramoff receives above $2,500. The prosecutors are also to be notified and they and Huvelle would step in to ensure that some portion of it pays for restitution to the victims of Abramoff’s crime.

It is believed that Abramoff could be eligible to a further tax refund of about $200,000 due to more tax overpayments over the years that his accountants have identified. This is in addition to the $520,000 he received earlier.

To relieve the family of further financial despair, Judge Huvelle suggested that Abramoff’s wife, Pam sell their million-dollar home as she cannot afford its $2,500 mortgage working as an executive assistant in Columbia, Md., with a salary of only $40,000 per year. But Abramoff’s defense lawyer, Abbe Lowell said that the family could not sell the house because of the depressed real estate market and due to of a leaky roof which they cannot afford to repair.

Abramoff and his family have lived in luxury for many years out of his salary as a top Washington lobbyist. But ever since his conviction and imprisonment, Abramoff has been out of work for five years and his family has been impoverished through two criminal trials and various criminal and tax problems.

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Law Offices of Darrin T. Mish, P.A.: Tax Attorney

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