Steve Laubly convicted

[Demosthenes]

I used to tangle regularly with this guy on the wtp-loit and no-income-tax yahoo groups.

He was one of the many tax denier gurus who transitioned to mortgage elimination scammer when the economy soured.

According to testimony, between 2004 and 2006 Laubly ran a successful real estate brokerage business in Clovis called Sundance Real Estate. Despite having a gross income of $557,832 for those years, he did not file federal income tax returns. Evidence showed Laubly had filed a tax return only once in his life, in 1968.

Read more: http://www.fresnobee.com/2011/05/03/237 ... z1LOEWGbWN

[.]

Evidence showed Laubly had filed a tax return only once in his life, in 1968.

So, he filed one return when he was 19 or so (he's 62 now.)

40+ years with no return and no red flags were ever raised? Even though one must assume if he was employed (rather than being self-employed and non-reporting or unemployed for 40 years) at any point during that 40 years that earnings were being routinely reported to the SSA by employers via 941s?

The IRS matches every single 1099, but they can't manage to correlate 941s?

Not once in 40 years?

Close enough for government work.

[webhick]

The IRS matches every single 1099, but they can't manage to correlate 941s?

Not once in 40 years?

Close enough for government work.

I still hear about employers who say "It's up to you to report your income" or have "no idea what a 1099 is" until one of their employees try to collect unemployment and brings the wrath of the unemployment audit down upon them.

Hell, I know one guy who went nearly 30 years without filing a tax return and never getting busted for it until the company he was working for ended up with the exact situation above, which triggered the issue of a 1099 for the prior year. I don't know why a 1099, I would think a W-2 because he was definitely an employee, but whatever.

1099s get compared "easily" because the 1096 sent to the IRS has copies of all the 1099s issued (which obviously contain a SSN and name, as well as how much to each company or individual). The 941s don't include any employee information, basically just how much you paid out. And I don't know about anyone else, but my 1040EZ doesn't say who paid me, just how much I got paid. Without having the source from the employees or the destination from the employer, I don't see how that would work.

W3s vs tax returns, on the other hand would be more feasible. The W3's got copies of all the W2s issued to the employees. If the employees claimed more than what the employers reported for them, then they're probably okay, less than and they've got an issue. But there's a rub with this method because the W3 gets sent to the SSA while the tax returns obviously go to the IRS. In my experience it takes one and half to two years for them to catch any discrepancies between the 941s (sent to the IRS) and the W3s, so I imagine it would take a similar amount of time to compare tax returns to the W3s.

[Quixote]

The IRS matches every single 1099, but they can't manage to correlate 941s?

Not once in 40 years?

Close enough for government work.

I still hear about employers who say "It's up to you to report your income" or have "no idea what a 1099 is" until one of their employees try to collect unemployment and brings the wrath of the unemployment audit down upon them.

Hell, I know one guy who went nearly 30 years without filing a tax return and never getting busted for it until the company he was working for ended up with the exact situation above, which triggered the issue of a 1099 for the prior year. I don't know why a 1099, I would think a W-2 because he was definitely an employee, but whatever.

1099s get compared "easily" because the 1096 sent to the IRS has copies of all the 1099s issued (which obviously contain a SSN and name, as well as how much to each company or individual). The 941s don't include any employee information, basically just how much you paid out. And I don't know about anyone else, but my 1040EZ doesn't say who paid me, just how much I got paid. Without having the source from the employees or the destination from the employer, I don't see how that would work.

W3s vs tax returns, on the other hand would be more feasible. The W3's got copies of all the W2s issued to the employees. If the employees claimed more than what the employers reported for them, then they're probably okay, less than and they've got an issue. But there's a rub with this method because the W3 gets sent to the SSA while the tax returns obviously go to the IRS. In my experience it takes one and half to two years for them to catch any discrepancies between the 941s (sent to the IRS) and the W3s, so I imagine it would take a similar amount of time to compare tax returns to the W3s.

The "employer" issued 1099s, not W-2s, because he did not withhold FICA or income tax and, if he was an employer, he would be liable for his part of FICA and a portion of the employee's part, plus some of the income tax that should have been withheld. He got away with filing 1099s instead of W-2s because the revenue agent was lazy or badly trained.

W-2s and 941s are matched. If the W-2s show more tax than the 941s, IRS assesses the difference. If the 941s show more wages than the W-2s, IRS assesses a penalty for failure to file W-2s due to willful disregard of the rules. In theory, the willful disregard penalty is assessed only if the employer does not file the W-2s after being contacted by IRS concerning the matter. In practice, things are not that neat.

[Demosthenes]

In recent years, Laubly has been touting a guru named JR Butler (www.beatthecourt.com and the LawDog Reporter newsletter.) Turns out, Laubly *is* JR Butler.

Example:

http://www.associatedcontent.com/articl ... sored.html

[jkeeb]

He obviously didn't use his own system--it would have worked.

[grixit]

Hmm, the headline said "Clovis man found guilty of tax evasion". Is it weird that i immediately thought "Wow the statute of limitations should have lomg run out on that one"?

[Doktor Avalanche]

In recent years, Laubly has been touting a guru named JR Butler (http://www.beatthecourt.com and the LawDog Reporter newsletter.) Turns out, Laubly *is* JR Butler.

Example:

http://www.associatedcontent.com/articl ... sored.html