IRS Employee busted for helping dancer
From today's Austin American-Statesman:
Affidavit: IRS worker tried to trade tax aid for private dance
Man charged with illegally accessing woman's tax information
By Steven Kreytak
AMERICAN-STATESMAN STAFF
Thursday, July 22, 2004
Inside tax help for private dances. That's the trade an IRS employee offered a dancer at his favorite South Austin strip club, according to federal court documents.
Charles G. Herndon, 57, of Austin made the proposal last year after Casey Urias, who was a dancer at Exposé on South Congress Avenue, told him she was being audited and hadn't filed a tax return in several years, according a federal court affidavit.
Urias told Treasury Department investigators that "Herndon told her that he worked for the IRS and could help," the affidavit said. "He wanted a dinner date, and private dances and possibly sex at a hotel in exchange for helping her with her taxes."
Herndon illegally accessed Urias' tax account and prepared four years of tax returns for her, the affidavit said. The affidavit does not say whether the meeting took place.
On Tuesday, a federal grand jury in Austin handed up a nine-count indictment against Herndon. Released by the district clerk's office Wednesday, the indictment charges Herndon with unlawful solicitation by an IRS employee and unauthorized disclosure of tax information, and with illegally accessing IRS computers and making false statements in tax records.
He faces up to nine years in prison on the highest charge and is free on an unsecured bond. When reached at his South Austin home, the 18-year-employee at the IRS service center in Austin said that he is "innocent until proven guilty."
Herndon's defense lawyer, Ben Florey of Austin, said the allegations are untrue. If Herndon broke any IRS rules, Florey said, it should be handled in an administrative proceeding and not a criminal court. Herndon is on leave from the IRS, said Florey, who was unsure whether Herndon is still being paid.
Urias could not be reached for comment. A woman who answered the phone at Exposé said Urias has not worked there for about a year.
Urias told Treasury Department investigators that she met Herndon several years ago when she started working at Exposé, according to an affidavit. Herndon went to the club every other Sunday and spent between $300 and $500, the affidavit said.
Investigators learned about Herndon's alleged work for Urias earlier this year when a letter he wrote to Urias including her tax information was returned to the IRS customer service center in Austin as undeliverable, the affidavit said.
"Herndon wrote . . . that he had thought he had become friends with Urias, and at the least he is a good customer," the affidavit said. "Herndon indicated that Urias was to have met with him at an International House of Pancakes, but she did not show up."
Re:IRS Employee busted for helping dancer
Re:IRS Employee busted for helping dancer
uh................................................ .....so? What's their beef?
Re:IRS Employee busted for helping dancer
I believe this part is their beef:
"Released by the district clerk's office Wednesday, the indictment charges Herndon with unlawful solicitation by an IRS employee and unauthorized disclosure of tax information, and with illegally accessing IRS computers and making false statements in tax records."
Re:IRS Employee busted for helping dancer
and this is the larger beef which will result from drawing official IRS attention to strippers plus a stripper incident creating bad publicity about an IRS agent ...
'she was being audited and hadn't filed a tax return in several years' .
I guaran-f*ck!n-tee you that the IRS will have lots more audits of strippers in store, as payback for this embarrassing incident. I can also pretty well guarantee the dancer involved in this incident that she's about to receive a $50,000+ bill for back taxes.
Re:IRS Employee busted for helping dancer
Quote:
Originally Posted by Melonie link=board=27;threadid=11267;start=msg142166#msg14 2166 date=1090520988
and this is the larger beef which will result from drawing official IRS attention to strippers plus a stripper incident creating bad publicity about an IRS agent ...
'she was being audited and hadn't filed a tax return in several years' .
I guaran-f*ck!n-tee you that the IRS will have lots more audits of strippers in store, as payback for this embarrassing incident. I can also pretty well guarantee the dancer involved in this incident that she's about to receive a $50,000+ bill for back taxes.
Well I think the dancer will get charged more than $50,000 in back taxes, late fees and penalties with no write offs if there's no receipts to prove her case. She'll draw attention to the clubs she worked at during the 7 years as well as other dancers, Dj's, host, waitresses, etc. Too bad she didn't meet for pancakes....... The IRS employee was dumb to send a personal letter with return IRS Address.
Re:IRS Employee busted for helping dancer
Quote:
Well I think the dancer will get charged more than $50,000 in back taxes, late fees and penalties with no write offs if there's no receipts to prove her case. She'll draw attention to the clubs she worked at during the 7 years as well as other dancers, Dj's, host, waitresses, etc. Too bad she didn't meet for pancakes....... The IRS employee was dumb to send a personal letter with return IRS Address.
Yup - the only thing working in the dancer's favor is that the IRS usually won't go back farther than 3 years unless there is major proof of criminal activity i.e. organized crime, drugs etc. ... but they could go back farther if sufficiently motivated, which they might be under these circumstances.
I agree that the greater risk here is that the IRS has had their nose rubbed in shit by all of this bad publicity. They will very likely respond with detailed audits of the clubs this girl worked at, as well as other people also working in those clubs, at the very least.
On a more significant level, every year the IRS chooses certain industries as targets of deliberate scrutiny. An industry recently on the list was casinos, and the high profile IRS attention wound up having the effect that the salaries and tips of casino employees must now be fully reported to the IRS by the casinos. To make it practical for the casinos to do this, the tip money of most casino employees must now be 100% turned in to the casinos and then divided equally amongst all of the dealers/waitresses etc.
An incident such as this one involving the dancer and an IRS employee, on top of other high profile cases such as the Scores credit card overcharges, the Russian dancers "white slavery" case etc., serves to increase the probability that strip clubs may wind up being on next year's IRS target list, which will affect clubs and dancers across the country.
Re:IRS Employee busted for helping dancer
All I can say is that I hope that the other employees at that club filed their returns honestly and on time!!
Re:IRS Employee busted for helping dancer
Quote:
Originally Posted by VenusGoddess link=board=27;threadid=11267;start=msg147766#msg14 7766 date=1091420517
All I can say is that I hope that the other employees at that club filed their returns honestly and on time!!
No offense, but why do you assume that employee honesty in filing tax returns makes any difference ? Consider this. A couple of NYC dancers make statements in high profile newspaper coverage that they are earning $1000 a night as exotic dancers, which is seen by the IRS. While investigating the club in question, the IRS turns up dancer schedules which show that a dancer named ___ worked 150 days last year. The IRS pulls ___'s tax return and find that she (honestly) reported $50,000 in gross earnings from the club last year.
Without any pay stubs to prove otherwise, the IRS chooses to assume that dancer ___ probably under-reported her income per the Hollywood Stereotype. After all, according to the dancers in the New York News, if dancer ___ worked 150 days and earned the same $1000 a night as the other dancers admitted, she actually would have had a gross income of $150,000. Of course the IRS can't prove she earned that much, but at the same time dancer ___ can't prove that she DIDN'T earn that much and simply chose not report it all.
So the IRS, wanting to be "nice", decides to split the difference. They might offer dancer ___ a deal where the IRS will agree to drop tax evasion charges and will agree to not freeze all of dancer ___'s bank accounts etc. if dancer ___ will "voluntarily" agree to a settlement which assumes that she actually earned $100,000 last year and owes the IRS an additional say $20,000 on the unreported income.
If you're dancer ___, do you agree to hand over $20,000 to the IRS so that they will go away, or do you hire an attorney, go to tax court, and take the chance that the tax court judge will not believe the IRS allegation that the actual figure was $150,000 (such that ___ will wind up owing $60,000 in back taxes rather than $20,000) and gamble that the tax court will instead believe that the reported $50,000 was truly her total income ?
Option 1 take the settlement agreement - she's out $20,000 in back tax money
Option 2 go to tax court and win - she's out $5,000 in accountant and attorney's fees (plus all her accounts are frozen in the meantime)
Option 2 go to tax court and lose - she's out $5,000 in fees PLUS she's out $60,000 in back tax money (plus all her accounts are frozen in the meantime)
all of the above options wind up costing dancer ___ money
PLUS
dancer ___'s social security number will undoubtedly be put on the IRS maximum attention list in future years.
Working in a cash business is a two edged sword. When it comes to a tax judge or any other judge believing the word of an IRS agent or cop over the word of a stripper, there's no question who gets the advantage.
Re:IRS Employee busted for helping dancer
Holy shizzle Mel! LOL
Tis one of the reaons I went back to bartending. It's a cash based biz and I report my tips on a percentage that was rung up on the register. Usually 20% of the register rings, I'll report in tips. $100 in ring-ups on the register, $20 tips reported. I also deposit all of my money directly into my bank account and hold onto the deposit record.
Even as a dancer...they have to PROVE you made x amount of dollars...the bad thing is that they can use circumstantial evidence and still get a verdict. Yikes.
Re: IRS Employee busted for helping dancer
The article stated she was only eighteen.....so how many years could she be possibly not filing taxes?? Also, given the fact she was probably in high school, she was probabbly working at part time low paying jobs....basically the gov't would OWE her money, not the other way around. In that case, if they owe you, I didn't even know you HAD to file....
I could be completely talking out of my ass, btw :p
Re: IRS Employee busted for helping dancer
BTW, this thread is 2 yrs old!
Re: IRS Employee busted for helping dancer
yes, and within those two years, the US congress has appropriated special moneys and the IRS has hired additional agents to establish an 'adult business tax enforcement' task force ... whose specific purpose is to look into the tax liabilities of adult video producers, adult bookstore owners, strip clubs and dancers etc. The decision to do this did not come out of the 'blue', but out of the front page news stories like the one in this thread !
Re: IRS Employee busted for helping dancer
Well, not out of the blue, but there is a larger context as well - greater evasion and non-compliance of the proverbial "big fish" also means that, in the US, the government is, in general, more closely monitoring ALL of those that traditionally flew under the radar - working class people of all collar descriptions included. Apparently 2004 was the first year in which you were MORE likely to be audited if you made under $100 000 than over.
Re: IRS Employee busted for helping dancer
Quote:
Originally Posted by absolutbliss
The article stated she was only eighteen.....so how many years could she be possibly not filing taxes?? Also, given the fact she was probably in high school, she was probabbly working at part time low paying jobs....basically the gov't would OWE her money, not the other way around. In that case, if they owe you, I didn't even know you HAD to file....
I could be completely talking out of my ass, btw :p
No, the article said the IRS employee who tried to help her was an 18-year-EMPLOYEE. It didn't say anything about her age.