The Oklahoman recently interviewed Oklahoma City tax attorney Travis Watkins of Travis W. Watkins Tax Resolution & Accounting Firm, about a huge victory for an Oklahoma City man in tax trouble using the IRS' Offer in Compromise program.
How does someone run up $2,000,000 in back taxes with the IRS?
“This Oklahoma City taxpayer had filed some (but not all) his returns, but failed to report gambling income. He was self-employed, and buried his head in the sand somewhat. A very aggressive IRS Revenue Officer showed up at his house and informed him (to his surprise) that he owed the IRS over $2,000,000. He was especially fearful, as English was his second language.”
He must have had some HUGE gambling winnings, right?
"Actually, no. That's the surprising thing. He lost it ALL at the casinos."
If he lost it all, how did he have such a huge tax bill?
“The IRS will look at W-2G forms that all casinos file on taxpayers for gambling winnings above $600.00. If you fail to file a return, or they audit you and you can't prove losses up to that amount, they take the un-reduced winnings as taxable income and stick you with a tax bill. That's what happened here. He lost everything, got no credit for his losses, and got a massive tax bill he could never pay.”
How did you persuade the IRS to accept $50 for this tax bill?
“Sometimes, an Oklahoma City tax lawyer can challenge the big bill by filing an original return or showing the actual losses up to the amount of winnings in an audit. In this case, however, the taxpayer had so little because of his gambling issues, Travis W. Watkins Tax Resolution & Accounting Firm was able to show the IRS that he couldn't ever pay this massive tax or anything like it - using the IRS' Offer in Compromise Program - and the IRS accepted $50.00 in full and final settlement of the entire tax debt. Understandably, he was incredibly relieved, and grateful to have one of the IRS' most aggressive revenue officers off his back.”
Any advice for Oklahoma City gamblers in regard to IRS taxes?
“You really need an Oklahoma City tax attorney when you owe massive amounts and you have aggressive collections on you. First and foremost, though, I would say that if you gamble routinely, you need an Oklahoma City tax resolution firm like Travis W. Watkins Tax Resolution & Accounting Firm to assist you with proof of your losses each year when you go to file your taxes. An ounce of prevention is worth a pound of cure, they say."
Travis Watkins is an Oklahoma City Tax Attorney who helps taxpayers end IRS problems for good. In 2018-19, his firm, Travis W. Watkins Tax Resolution & Accounting Firm was awarded The Oklahoman's Reader's Choice Award for Best Tax Attorney. Mr. Watkins has earned the designation Certified Tax Resolution Specialist from the American Society of Tax Problem Solvers, a national not-for-profit organization dedicated to helping taxpayers solve IRS problems. As a special offer to The Oklahoman readers you can get the referenced Special Report, “Small Business Owners: How You Can-and Must-Protect Your Business From The IRS If You Have Payroll Tax Problems” by calling (405) 454-8373 or contacting us online.