Attorney Franklin Y. Wright, Jr., was broke – worse than broke actually since he owed $419,000 to the Internal Revenue Service. When the IRS started its collection process, he asked his return preparer, Robert E. Barger, to make IRS an offer. Before agreeing to process the offer, the agency insisted Wright start paying $5,000 a month.

 

Taxpayers who can't afford to pay their income taxes can make an offer to the IRS . For more information, see IRS Collections at www.taxfables.com . With the offer, the person includes a list of assets, liabilities and a schedule showing earning potential. If some assets can be sold, the IRS will insist on the cash from the sale. If some information is false or misleading, the taxpayer might go to jail.

 

After selling their home, Wright and his wife, Annette, wanted to buy a new one but couldn't get financing because of his tax debts. She asked a friend Caroline Haggard to buy one for them in Haggard's name.

 

As part payment for the house, the couple brought Haggard a bag with 150 $100 bills inside. Franklin told her the cash was from his law practice and assured Haggard he had paid taxes on it. He warned her not to deposit the money in a bank to avoid problems with the IRS . Banks and businesses receiving more than $10,000 in cash must report the transaction to the IRS . Usually this triggers an audit.

 

Ignoring Franklin 's warning, Haggard deposited the money in a bank. She then asked Barger, Franklin 's tax return preparer, for advice. But instead of suggestions, he scolded her for depositing the money.

 

Barger knew he had to notify the IRS of the home sale. He amended the papers given to the agency to say the Wrights had sold their house because they couldn't make mortgage payments and were now renting. The papers did not mention a new home.

 

The Wrights and Barger were indicted for conspiracy to defraud. Additionally, Franklin was indicted for tax evasion and Barger for making false statements.

 

The men went to jail and Annette received five years probation so she could care for the couple's small children.

 

THE MORAL: To make an offer to IRS , there's a right way and a Wright way.