There are so many things to consider when thinking about purchasing a home. You have to think about what you can afford, you have to get approved for a loan (not pre-approved), you have to find the home, and then you have to pay. Many individuals, especially first-time homebuyers, do not consider the tax implications of purchasing a home and believe it; there are tax implications.
There are plenty of reasons you may need a tax extension this year which, in general, the government will accept unless there’s an extraordinary circumstance. However, there are a few important things to keep in mind if you’re going to take that route. After weighing some of the pros and cons, there are things you need to know should you choose to file for a tax extension this year.
So, maybe you didn’t pay Uncle Sam enough in 2018 and now you have a gnarly bill. Maybe you started a business and did not pay any taxes all year. Paying your taxes will not feel great, but your bill is probably way less than Walter Anderson’s. Walter decided he did not like the idea of paying taxes, so he hid most of his earnings in off shore banks. We are not talking about a couple of thousand dollars here or there. We are talking about hundreds of millions.
Walter the Entrepreneur
Walter Anderson made his money as an executive in telecommunications. He invested in telecommunications companies that later sold earning him a huge profit. He became famous when he invested in a private space venture that aimed to refurbish the Mir space station which was an old Russian space craft. His group’s plan was to send people to the space station for “vacation”. Some say he started the privatization of space travel or at least the idea of it. He was one of the original supporters of the International Space University which is a multidisciplinary program focused on the study of space at MIT.
Federal Tax Evasion Charges
In 1998, Walter was managing companies with a total revenue of around $500 million. He made just under $130 million. In 1999, he made just under $240 million. How much income did he report to the IRS? $67,939 and he paid $435 in income tax. Due to the absurdly large sum of money Walter was making, the IRS took notice. On February 26, 2005, he was arrested at the airport returning from a trip to London. Officials spent the previous year investigating Walter’s income and found out that he was hiding money in the British Virgin Islands and Panama. He did this using aliases, tax havens, and shell companies.
He almost got out of having to pay $100 million to $175 million dollars of the owed taxes because the Federal government left a typo in their contract. The court imposed a $23 million fine and told the Feds they must sue in civil court. Well they did, and the total bill ended up being $247,482,114. Whenever you are feeling down about your tax bill, think about Walter’s and you will no doubt feel better!
If you run into tax issues and are unsure what your options are, you need assistance. The IRS is not an agency you want coming after you. For over 15 years, Elias Dsouza has been working with people just like you to manage their tax burden. Contact Elias today for a free consultation.