9/19/2012 - She paid the IRS their money now the State Of Washington says she should have paid the whole amount to them!  do You know a Tax Lawyer or Tax Accountant in the State of Washington THAT KNOWS MLM!  HELP!  SANDY (below can’t help her) she needs a state of Washington expert.


By Sandy Botkin CPA , Attorney

“The money is the same, whether you earn it or scam it.” –Bobby Heenan
“Who said crime doesn’t pay? Look at how much Madoff made”- Anonymous

Editors Note: Sandy is a super guy and each one of you needs to study his MLM Tax information.  Sandy and I fought some hard battles with crooked tax people in the old MLM WatchDog publication.  If 2 top multimillion dollar "top of downline leaders" had studied Sandy's tax material they would Not be in CLUB FED (the grey bar hotel) plus doctors, denists and even a lawyer would be free because they got BAD lies on taxes.   READ THIS CAREFULLY!

There are an ever increasing number of scams being investigated by the IRS. Some of these scams are so devious and clever that even the smartest of folks can be fooled. Every year IRS publishes a list of the “dirty dozen” tax scams. Here are some of the latest scams being investigated by the IRS.

1.Phishing scams: Folks are receiving letters or emails with the IRS / Treasury department logo informing them that they may be owed a refund. In order to obtain this refund, they have to prove that they are the right person by confirming certain personal information such as social security number, mother’s maiden name, address etc.  To date, IRS has identified as many as 1500 different phishing scams

Elaboration: IRS will never call you or write you asking for this type of personal information. You should never provide it to anyone by phone, letter or email. If you get an email requesting this type of information allegedly from the IRS, forward the email to phishing@irs.gov

2.Economic Stimulus Scams: Some scam artists are trying to trick individuals into revealing personal financial information that can be used to access their financial accounts by making promises relating to the economic stimulus payment, often called a “rebate.”  To obtain the payment, eligible individuals in most cases will not have to do anything more than file a federal tax return.   But some criminals posing as IRS representatives are trying to trick taxpayers into revealing their personal financial information by falsely telling them they must provide information to get a payment. Sometimes, these criminals might ask for bank account information for the IRS to directly deposit the rebates, which then results in the thieves cleaning out the bank account.

Elaboration: IRS will NEVER ask for this type of information regarding your social security number of bank account information.

3.Frivolous arguments: There are a host of frivolous arguments being made by promoters of scams that purport to reduce or even eliminate most tax liability. Some of the many fallacious arguments are:
“Taxes are unconstitutional or not properly codified by Congress.
Folks are promised a non-existent mariner’s tax deduction
Tax filing is “voluntary” and thus, you don’t have to pay anything.
Taxes are only required for federal employees
Wages, tips and other service income is not taxable, and many more. You can get a complete list of these fraudulent arguments by going to: http://www.irs.gov/taxpros/article/0,,id=159932,00.html
This is found in IRS notice 2007-61

Elaboration: None of these frivolous arguments have won in court. In fact, the judges are so tired of hearing them that they are asserting the government’s legal fees against those that make these arguments in court.

4.Fuel Credit Scam: Sometimes there is some truth behind the scam. Farmers are allowed a fuel tax credit for off-highway business purposes. However, some individuals are claiming the tax credit for nontaxable uses of fuel when their occupation or income level makes the claim unreasonable.   Fraud involving the fuel tax credit was recently added to the list of frivolous tax claims, potentially subjecting those who improperly claim the credit to a $5,000 penalty.

5.Hiding income offshore:  To my knowledge this scam has been around for years but is being aggressively investigated by the IRS. Promoters are promising that by placing assets offshore in foreign banks or tax havens, taxpayers would avoid all taxes and, at the least, not have their income discoverable by the IRS on these accounts. Interestingly, some Swiss banks helped promote this scam to the detriment of those involved.  As an offshoot of this, some promoters set up foreign credit cards and promised that all income earned is paid to the credit card. This way, they promote that there will be no tax and that the IRS will never find out.

Elaboration: US citizens are taxed on their world-wide income. Setting up foreign bank accounts will NOT shield them from taxation. Even worse, on the federal tax return, there is a question asking about these. Now a taxpayer may have foreign accounts for many reasons; however, if a taxpayer doesn’t disclose these accounts, they are subject to criminal fraud penalties. Moreover, IRS is aggressively investigating these accounts and has cut deals with most foreign jurisdictions.

6.Abusive retirement scams: The IRS continues to uncover abuses in retirement plan arrangements, including Roth Individual Retirement Arrangements (IRAs).  The IRS is looking for transactions that taxpayers are using to avoid the limitations on contributions to Roth IRAs.   Taxpayers should be wary of advisers who encourage them to shift appreciated assets into Roth IRAs or companies owned by their Roth IRAs at less than fair market value.   In one variation of the scheme, a promoter has the taxpayer move a highly appreciated asset into a Roth IRA at cost value, which is below annual contribution limits even though the fair market value far exceeds the amount allowed.
Elaboration: Contributions to retirement plans must be made in cash and NOT with appreciated assets. Also there are limitations to yearly contributions, which must not be exceeded.

7.Claiming zero wages: Some taxpayers try to file phony wage or income related information such as Form 4852 which is a substituted W-2 or amended form 1099 ( for income, dividends and royalties) in order to improperly reduce their taxes to zero.  This type of behavior is being tracked by the IRS and is aggressively being prosecuted. Don’t get fooled into thinking that this scam will work.

8.Filing a false claim for refund: Usually taxpayers file form 843 to abate previously assessed taxes giving some fictitious argument. Even worse, many individuals who have tried this haven’t even previously filed a federal tax return.

9.Return preparer tax fraud: Perhaps this has been an ongoing problem for years. However, I have seen a dramatic increase in enforcement by the IRS against fraudulent tax preparers. Thirty years ago, it was rare if more than two or three tax preparers per week were barred from preparing taxes or representing taxpayers. Today, I have seen as many as thirty tax preparers per week barred from preparing taxes.  The range of what these accountants are doing is quite varied. Some fraudulently puff up their credentials claiming that they are CPAs or lawyers, which wasn’t the case. Some improperly give the fuel tax credit noted above. Many inflate deductions for taxpayers that the taxpayers never paid for. As an example, there was one accountant who claimed for his clients thousands more in charitable deductions than the client paid for.

Elaboration: IRS investigates these fraudulent accountants and audits all of their clients. You should certainly look for an aggressive accountant but also one who is honest!

10.Disguised corporate ownership:  Some folks are forming entities in some states in order to hide the owners who are conducting a wide array of illegal activities such as hiding income, money laundering, etc. IRS is working with state authorities to investigate these activities. 

Elaboration: No entity can guarantee complete shielding from the IRS. If IRS wants to investigate an entity, they can get the names of the owners, officers and any other pertinent information. There are some states that do promise increased privacy such as Nevada. However, even a Nevada corporation can easily be investigated by the IRS. Don’t be fooled into thinking that any entity can be used to hide income from the IRS.

11.Misuse of trusts: Many promoters have promised taxpayers that certain trusts can be set up to minimize taxes by deducting a wide array of personal expenses or avoiding estate taxes. While there is a kernel of truth to this, especially regarding estate taxes, these trusts must be set up correctly. Moreover, they usually do not allow for deduction of personal expenses. It is vital to seek a good, qualified tax attorney to verify that these trusts do accomplish what was promised and are set up correctly. Finally, putting property in trust where you can control the assets or receive distributions can result in you, the grantor, being taxed on all of the trust income!

12.Abuse of charitable contributions and organizations: Many promoters promise to maintain control over donated property while taking a deduction. Examples of phony charitable deductions involve taxpayers who claim tuition payments as charitable contributions. Also, if you own property over a year, you can donate property and get a deduction for the fair market value of the item. However, promoters have set up scams where they sell paintings, antiques etc. to taxpayers on the promise that they will get these taxpayers an appraised value of many times the cost in a year for charitable deduction purposes. This overvaluation scams are fairly rampant.

13.Slavery tax credit: Although this isn’t on this year’s dirty dozen tax scams per se, IRS has noticed that this is fairly widespread as a “frivolous argument.” Promoters promise African Americans a special tax credit as reparation for slavery and oppressive treatment. This is absolutely false and no one should be fooled by this.

Each year, the IRS publishes a new list of their “dirty dozen” tax scams. You should be aware of these widespread scams. They can cost you large penalties and may even subject you to criminal penalties if you follow their advice. Avoiding these scams and running from people who promote them will make your life less taxing!

Sandy Botkin CPA, Attorney is a former trainer of IRS attorneys. He is president of the Tax Reduction Institute and lectures all over North America on tax planning. He has two bestselling books, “Lower Your Taxes: Big Time” and “Real Estate Tax Secrets of the Rich.” You can get these books in most book stores or by going to his web site at www.taxreductioninstititute.com

Editors Note: Lessons To Be Learned Below Also!


A recent case filed in federal court name  Sharon Kukhahn of Tacoma Wa., who allegedly sold a scam to misidentify the taxpayer as operating an enterprise subject to federal excise tax, such as firearms manufacturing. According to the complaint, Kukhahn charged single taxpayers between $1,750 and $1,900 and charges married taxpayers between $2,450 and $3,195 for her bogus service.   Editors Note: This is absolutely, totally completely insane!  A Firearms Manufacturer!!  You can trust your editor who is an ex-gunsmith who was legally licensed.... this the last  way you would want to dodge taxes!  The very last!  Why?   Guess who inspects Firearms Manufacturers?  Here read this from the The ATF who is in charge of guns!

The U.S. Bureau of Alcohol, Tobacco and Firearms (ATF) is a tax-collecting, enforcement and regulatory arm of the U.S. Department of the Treasury. In common with all other members of the executive branch, ATF's responsibility is established by congressional action. ATF cannot enact a law, nor can it amend the law. Charged as it is with fiscal oversight of some of the most controversial topics in Western civilization, ATF strives to maintain professional neutrality while giving a 35-to-1 return on every dollar it spends. ATF has the best cost-to-collection ratio in the federal family.

Editor Continuing rant: See what I mean?  This woman was absolutely ....ahhhh... putting people in the lions mouth... something beyond description!

The last six years I have  tried to help folks who got suckered by Tax Evasion Guru's.  How!  Giving evidence to prisons and probation officers to try to help get innocent folks out of jail.  Why? Because these folks (innocents) were scammed.     Doctors, mothers, nice folk that are in jail and lost their house, cars and children because of fines and prison.  Why do this?  Because I believe the U.S. Government should move faster to shut down these scumbag tax evasion promoters and put them in jail - FAST!


The people selling this stuff sometimes believe it themselves!  That makes it double dangerous, like Pinnacle Quest International that just got shut down (see other articles upper right hand links).  The Feds got the name of every one they sold training to.   You know what?  THERE ARE GOING TO BE INNOCENTS GOING TO JAIL FOR TAX EVASION!   Why?  They tried to apply that junk information to their own taxes.  I know I have tried to help people hurt and going to jail.

Network Marketers being sweet independent souls by nature are suckers for this BS.  Sandy BotkinS CPA, JD and your editor fought this.... this.... crapola in the middle 90’s and it coming back again!  Global Prosperity put bullet holes in my car. A big problem is we can’t search the tax records of most of these Scammers making money off of selling you information that income taxes are not legal.  If we could we’d would find out that most of them do pay taxes.  They are just suckering others into going to jail so they can make money off of tapes, CD, books, and worthless legal fees!  YOU ARE BEING SCAMMED AND IT CAN PUT YOU IN JAIL!

If you want to tax protest the MLM WatchDog’s advice is move outside the U.S.  Why?  It will cost you at least $500,000 in legal fees to get where wealth airline pilot,  Mr. Cheek did before the Supreme Court!  Other countries like in South America for that, you could probably buy off a high court!  THE U.S. NO WAY!

A BIG BRICK WALL for tax protesters is found in the Cheek Doctrine (Supreme Court decided January 8th 1991 with respect to arguments about "constitutionality." Under the Doctrine, the mistaken belief that the Sixteenth Amendment was not properly ratified and the mistaken belief that the Federal income tax is otherwise unconstitutional are not treated as beliefs that one is not violating the "tax law" — i.e., these errors are not treated as being caused by the "complexity of the tax law."

In the Cheek case the Supreme  Court stated on Jan 8th 1991:  Claims that some of the provisions of the tax code are unconstitutional are submissions of a different order. They do not arise from innocent mistakes caused by the complexity of the Internal Revenue Code. Rather, they reveal full knowledge of the provisions at issue and a studied conclusion, however wrong, that those provisions are invalid and unenforceable. Thus, in this case, Cheek paid his taxes for years, but after attending various seminars and based on his own study, he concluded that the income tax laws could not constitutionally require him to pay a tax. http://en.wikipedia.org/wiki/Cheek_v._United_States

The Court continued: As we see it, he is in no position to claim that his good-faith belief about the validity of the Internal Revenue Code negates willfulness or provides a defense to criminal prosecution under 7201 and 7203. Of course, Cheek was free in this very case to present his claims of invalidity and have them adjudicated, but, like defendants in criminal cases in other contexts who "willfully" refuse to comply with the duties placed upon them by the law, he must take the risk of being wrong.

WatchDog Note:   Cheek actually  hung himself by pointing out that arguments about constitutionality of Federal income tax laws "reveal full knowledge of the provisions at issue and a studied conclusion, however wrong, that those provisions are invalid and unenforceable," (Quote by the Court).

Click the link below – Study this Warning page for law enforcement on Tax Protesters and 16th Amendment Junk.  Notice the attempted TAX bombings?  Great join one of the Fringe tax protester groups and get put on a list of people that are nut cases for forever!  Are you nuts!  Run from any of these assholes who will get you put  in Jail!
(we have the best tax system in the world!  Do I love it...no!  But have been to 90% of countries in the world and there is only one I prefer to pay taxes in....the U.S.  Small link but click study history

Scammer "Judge Rizzo" and Wife Sentenced to Prison
“The government will not tolerate abusive tax schemes that use offshore accounts to illegally escape taxes,” said Nancy Jardini, IRS Chief, Criminal Investigation. “Those Americans who file accurate, honest and timely returns can be assured that the government will hold accountable those who don’t.”  “It is tragic when a former member of the judiciary, charged with upholding the law, encourages others to violate those laws,” said Paul K. Charlton, U.S. Attorney for the District of Arizona.
As described in the plea agreements, from 1999 to 2002 John Rizzo was a prominent speaker at offshore seminars hosted by Institute of Global Prosperity (Global Prosperity). At these seminars, Mr. Rizzo promoted the Millennium 2000 Reliance Defense Program (Millennium Program) to thousands of people resulting in more than $4 million in sales revenue for the Rizzos. The program included written materials taxpayers could use to establish purported good faith reliance defenses against potential criminal tax prosecutions. At an earlier court hearing, a videotape was played showing Mr. Rizzo appearing at Global Prosperity seminars wearing judicial robes and portraying himself as a former judge and an expert on tax law.

The Rizzos also admitted that they provided opinion letters, materials and documentation that claimed, among other things, that taxpayers could lawfully stop filing income tax returns and stop their employers from withholding income taxes from their wages. This claim was based upon the long-rejected notion that the Sixteenth Amendment to the Constitution had not been legally ratified.
The Rizzos further admitted that they concealed the income they earned from the sales of the Millennium Program through various means. They used offshore bank accounts, third-party merchant accounts to process credit card sales, and requested payments from customers in cash, money orders, and checks with the payee lines left blank. John Rizzo also admitted to knowingly providing false and misleading testimony to a grand jury by testifying that he and his wife filed federal tax returns for the years 1999, 2000, and 2001, when in fact, he and his wife had not filed such tax returns as required by law.   Ed Note:  More Crooks Go Down - Keep reading!

WASHINGTON, D.C.-Eileen J. O’Connor, Assistant Attorney General for the Tax Division, U.S. Department of Justice, John McKay, U.S. Attorney for the Western District of Washington, and Nancy Jardini, Chief, Internal Revenue (IRS) Service Criminal Investigation Division, announced today that at the federal courthouse in Seattle, Washington, Dwayne Robare pled guilty to superseding information charging him with income tax evasion for the 2000 tax year.
On May 12, 2004, Mr. Robare was indicted-along with alleged Institute of Global Prosperity founders Daniel Anderson, David Struckman, Lorenzo (“Zo”) Lamantia (also known as “Lorenzo Milano”), and Kuldip Singh-on a charge of conspiracy to defraud the United States by impeding the IRS. Mr. Robare faces a maximum potential sentence of five years in jail, followed by up to three years of supervised release, $250,000 in fines, and liability for the costs of prosecution

TUESDAY, JUNE 3, 2003 (202) 514-2007

WASHINGTON, D.C. – Assistant Attorney General Eileen J. O’Connor of the Tax Division announced that a federal jury in Seattle returned a guilty verdict against Laura Jean Marie Struckman, a participant in the Institute of Global Prosperity (IGP). She was convicted of conspiracy to structure a financial transaction.
(Ed. Note: Primary Action in prosecuting Pyramid Scheme)
Trial evidence showed that Struckman, formerly of Renton, Washinton, and an unindicted co-conspirator engaged in a 14-month conspiracy from June 1997 through August 1998 to evade currency reporting requirements by making cash withdrawals of over $960,000 in 122 separate transactions, none of which exceeded $10,000. The evidence further established that Struckman was the co-signer on three nominee bank accounts, opened at the U.S. Bank of Washington, into which she and another individual deposited over $3.7 million, earned from IGP, during the time period of the conspiracy.
Struckman faces a maximum statutory penalty of five years imprisonment and a $250,000 fine. She is scheduled to be sentenced by the Chief U.S. District Judge John C. Coughenour Aug. 8, 2003.
(Ed. Note: Secondary Actions in prosecuting Pyramid Scheme)
In other cases related to IGP, Jeffrey and Shoshana Szuch and Margo Jordan all pleaded guilty to using foreign bank accounts to commit tax evasion. According to indictments in those cases, the government showed that IGP was an organization that hosted offshore seminars for promoters of abusive trusts and anti-tax schemes. IGP was also known by other names, including Global Prosperity Marketing Group (GPMG) and Global Prosperity Group (GPG). Members of IGP marketed and sold various IGP products, including an "education course" named "Global 1" priced at $1,250; a ticket to a three-day offshore seminar named "Global 2" priced at $6,250; and a ticket to a five-day offshore seminar named "Global 3" priced at $18,750. The indictments alleged that the Global 2 and Global 3 seminars brought together portions of the IGP membership to hear, among other things, presentations by individuals and organizations involved in the sale and operation of foreign trusts designed in part to conceal income from the Internal Revenue Service.

Ed. Note: As you can see this illegal Pyramid Scheme rolled some serious money out of the pockets of suckers who wanted to believe taxation was not legal. On top of that the Pyramid Scheme operators scammed life savings investment money right and left from Pyramid Scheme participants who believed their 10% returns (a month) were real.

The Struckman case was investigated by agents of IRS Criminal Investigation. It was prosecuted by Tax Division trial attorneys Mark T. Odulio and Christopher J. Maietta.

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