Wait … these rules also apply to me?
Diane Kroupa can dish it out, and now she's going to have to take it. Punishment for tax evasion, that is. That's because after serving 11 years as a judge for the U.S. Tax Court, Kroupa is now under the microscope herself.1 Because — and this is really weird, I know — the rules that apply to every single other taxpayer in the United States … apparently also apply to her. It's ok if you need to take a minute to let that sink in; it was a big shock for me, too.
Kroupa and her husband have been indicted for tax evasion and obstruction of an IRS audit, stemming from years of personal expenses being characterized as business expenses. The fraudulent expenses were claimed as business deductions for the husband's business, Grassroots Consulting, and include things like rent and utilities for their second home; utilities, upkeep, and renovation expenses of their primary residence; Pilates classes; spa and massage fees; jewelry and personal clothing; wine club fees; Chinese language tutoring; music lessons; personal computers; and vacation expenses.
In addition to the fraudulent deductions, when the IRS started sniffing around, the couple hid documents from their tax practitioner and gave misleading documents to the auditor to make the expenses look convincing.
Chief Richard Weber of the IRS Criminal Investigation Unit commented: "As a former tax court judge, Kroupa dealt regularly with individuals who cheated on their taxes, which makes these allegations particularly troubling. Reporting personal expenses as business expenses on your tax returns is not tolerated, regardless of your job or position."
NOW he tells us.
1 Department of Justice News Release (April 4, 2016) Available at: www.justice.gov/opa/pr/former-united-states-tax-court-judge-and-husband-indicted-conspiracy-commit-tax-evasion-and
America's Funniest Taxpayer Excuses
Thanks to Laurie O'Bryne of O'Bryne's Tax Service in Carson City, Nevada, for sharing her top taxpayer excuses for not filing a return:
- Taxpayer was hospitalized for bubonic plague.
- Taxpayer had to move to Utah for the health of his cat.
- Taxpayer got mad and threw his computer out of a window.
- Getting tax records together caused the taxpayer to break out in shingles.
- Taxpayer was afraid to file because he didn't want his wife to see how much money he had won at the casino.
- Taxpayer's husband ran off with his brother's wife, and the taxpayer ended up with her husband's brother. They couldn't figure out who could claim whom.
- Taxpayer was using medical marijuana and kept forgetting to do things — including file.
Making a math mistake on a tax return is scarier than identity theft
Just in case you're not tired of all the recent political polling, here's one more poll that may hit closer to home.
First, the good news. Although most people don't enjoy preparing or paying their taxes, according to a recent taxpayer survey,1 86% of respondents believe that the IRS is actually necessary, and decking an accountant ranks very low on the "Whom We'd Most Like to Punch" scale. Accountants are viewed as "sometimes helpful" by about 52% of individuals surveyed, although 20% view accountants as overpriced, and 5% think they're just a scam.
As far as who outranks the IRS in popularity, Pope Francis was the clear winner. But even Vladimir Putin and O.J. Simpson were more popular with 12% and 8% of respondents, respectively. A whopping 77% of respondents would rather do laundry than prepare their taxes.
Interestingly, 81% of those polled would not hide money offshore even with the assurance of never being caught. Brilliant! On the other hand, when asked what they would do in exchange for a tax-free future, about 4% said they would kill someone (also with the assurance of never being caught). Brutal. Approximately 11% of respondents said they would clean Chipotle's toilets for a period of three years, while 6% would be willing to sell a kidney. And, about 27% said they would be willing to get an "IRS" tattoo. There was no discussion, however, on where that particular tattoo would be placed.
A few fun facts about this week's writers:
Austin Lewis loves classic rock, despite being born a few decades late, and he goes to more concerts than anyone else in the office. He's also a big baseball fan, and his worlds collided in 2014 when he saw Paul McCartney at Dodger Stadium.
Lynn Freer, EA, loves to travel and loves Starbucks. Here she is at Starbucks on the Champs-Élysées.
Renée Rodda, J.D., when not writing, researching, and helping Spidell customers, enjoys riding her horses, Eli and Ava.
Tim Hilger, CPA, is busily preparing taxes today. Tim is a golf nut who has played courses in all 50 states and often reminisces about his younger days shredding on his bass guitar.
Kathryn Zdan, EA, is not only director of the editorial department, she also "rocks the house" as a regular in curling bonspiels around the country.
Diane Fuller is a gourmet cook with a refined taste in all things sweet. From traditional Japanese desserts to the best bacon donut that's ever appeared in our break room, Diane knows how to satisfy her sweet tooth. She also writes children's poetry!
Sandy Weiner, J.D., lives in sunny San Diego and takes full advantage of the perfect weather by pedalling on her bike and paddling on her kayak. Stay out of this iron woman's way!
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