Month: October 2013

Actor Stephen Baldwin Forks Over Another $100K In Back Taxes to New York

Stephen Baldwin Paid Another $100,000 To New York; Tab Still At $243,068

Actor Stephen Baldwin, of “Celebrity Apprentice” and the “The Usual Suspects” fame, exited a courthouse last week another $100,000 lighter in the wallet.

Back Taxes
If only it was $200 in back taxes

The 47 year-old actor’s tax troubles began with an criminal investigation by New York’s Tax Department and District Attorney, Thomas P. Zugibe. Their inquiry uncovered his failure to file state income tax returns from 2008 to 2010. Back taxes due to the state of New York at the time were over $300,000, including penalties and interest. Police arrested Baldwin in December of 2012 and prosecutors charged him with the felony of “Repeated Failure to File Personal Income Tax Returns.”

Baldwin ended up pleading guilty to the felony charge in March of 2013. He also agreed to pay $400,000 in restitution within one year as part of a plea deal. The arrangement gives him a conditional discharge and no jail, but only if he keeps his end of the bargain. Baldwin, including a prior $100,000 payment, has now paid the State $200,000. District Attorney Zugibe, however, intends on asking Judge Apotheker to jail Baldwin if he can’t meet his March 2014 deadline to pay the entire $400,000 in restitution.

Due to the magic of interest and penalties, New York State Tax Commissioner Thomas H. Mattox also announced that Baldwin still owes $243,068 in back taxes.

Bad Tax Advice

Baldwin claims that his dirty deed was the result of “some really bad suggestions and advice” from lawyers and accountants, according to the New York Post. Commissioner Mattox publicly responded to Baldwin’s dilemma by noting that his Tax Department can arrange installment payment agreements to help people voluntarily resolve back taxes and avoid criminal prosecution.

We work diligently with taxpayers to address issues before they escalate [into criminal charges]. If you have a tax debt, don’t hesitate—take action and contact us to resolve your sitaution.”

Solutions for Back Taxes

Florida residents don’t have to worry about being in Baldwin’s shoes. Florida doesn’t collect state income tax (there are other state taxes, though). Commissioner Mattox’s advice, however, still rings true when it comes to federal income taxes. Short on manpower, the IRS has promoted tax resolution options for unpaid, federal tax debt. The IRS recently made these options more appealing to entice delinquent taxpayers.

Owing back taxes won’t often lead to criminal prosecution. As the Baldwin case illustrates, though, penalties and interest will continue to grow a taxpayers debt until it’s paid off. Ignoring tax debt only makes the problem worse.

Ari Good, JD LLM, a tax, aviation and entertainment lawyer, is the Shareholder of Good Attorneys At Law, P.A. He graduated from the DePaul University College of Law in 1997 and received his LL.M. in Taxation from the University of Florida.

Contact us toll free at (877) 771-1131 or by email to info@goodattorneysatlaw.com.

Updated Florida Form to Report Sales and Use tax on Aircraft

Florida Introduces New Form to Report Sales and Use Tax on Aircraft

The Florida Department of Revenue (FL DOR) has updated its reporting form on the sale and use of aircraft in Florida. Form DR-15AIR (Sales and Use Tax Return for Aircraft) replaces Form DR-42A (Ownership Declaration and Sales and Use Tax Report on Aircraft). The new form provides explicit guidance on when to report taxes on the sale and use of aircraft in Florida.

When Form DR-15AIR Should be Used.

An individual should report sales and use tax on the purchase of aircraft when they don’t pay Florida’s sales tax to the seller. Form DR-15AIR clarifies the three (3) situations when an individual should instead pay a 6% “use” tax:

1.  An individual purchases an aircraft from a person who is not a registered aircraft dealer and the sale or delivery of the aircraft occurs in Florida;

2.  An individual purchases an aircraft in another state, territory of the United States, or District of Columbia and is brought into Florida within six months of the purchase date; or

3.  An individual purchases an aircraft in a foreign country and is brought into Florida at any time.

This use tax is in addition to any county discretionary sales surtax. The discretionary sales tax applies to the first $5,000 of the purchase price and rates vary by county.

When Sales and Use Tax is Due.

Florida Sales and Use Tax
. Taxes Not Included

Florida’s use tax is technically due when an individual brings an aircraft into Florida for use or storage. The corresponding tax returns and tax payments, however, are due only on the 1st day of the month after the actual month when:

1.  The airaft was purchased in Florida;

2.  The aircraft was delivered to a Florida location; or

3.  The aircraft enters Florida for use or storage.

The tax returns and tax payments are late if coming after the 20th in the month they are due. Late returns and payments are penalized a minimum of $50 or 10% of the amount due, whichever is less. Interest is dues on late payments as well.

Exceptions to Sales and Use Tax.

Exceptions to Florida’s sales and use tax on aircraft continue to apply, including:

1.  The value of an aircraft, boat, mobile home, or motor vehicle an individual trades in reduces the taxable purchase amount. The person accepting the trade in and selling the aircraft must be the same.

2.  An individual removes an aircraft purchased in Florida from the state within 10 days after the date of purchase, or 20 days after completion of repairs or alterations.

3.  A credit for taxes pad in another state, territory of the U.S., or Washington D.C. No credit is available for taxes paid in another country.

4.  An exemption from the tax for non-residents of Florida when their aircraft enter and remain in Florida for 20 days or less during the six-month period after aircraft purchase. This exemption also applies to non-resident owned aircraft that enter Florida for the purposes of flight training, repairs, alterations, refitting, or modification.

Ari Good, JD LLM, a tax, aviation and entertainment lawyer, is the Shareholder of Good Attorneys At Law, P.A. He graduated from the DePaul University College of Law in 1997 and received his LL.M. in Taxation from the University of Florida.

Contact us toll free at (877) 771-1131 or by email to info@goodattorneysatlaw.com.