Discussion:I lost a client to www.losthorizons.com...............

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Discussion Forum Index --> General Chat --> I lost a client to www.losthorizons.com...............


Taoseno (talk|edits) said:

29 August 2008
OK I lost a client to www.losthorizons.com. After seeing copies of the prior three years returns I prepared that were amended by losthorizons I am really questioning the legality of this strategy. Basically he is using 26 CFR 31.3401(a), 31.3121(a) and 26 USC 3401 and using the precedent of US v. Long (618 F.2d 74,75)to validate that a zero return is still a valid return. Basically he is getting refunds of all monies paid in by using these referenced statutes w/out fabricating any deductions. Website says he has been in business since 1990. How is that even possible? Anyone think my former client can get into trouble by following his advice? Anyone familiar w/ the legality of this strategy? Sounds like a scam to me..............

Bushmaster (talk|edits) said:

29 August 2008
Well, filing a zero return IS valid, if it is an accurate depiction of what happened.


Somehow, I doubt that is the case. When your former client comes back, charge them triple to fix their mess. Wesley Snipes tried it, it didn't work out so well....

Sandysea (talk|edits) said:

29 August 2008
Why even file a zero tax return? If you earned no $$, paid in no $$, then what do zero's represent? Nothing from nothing is still nothing.

Why even spend a stamp on a return that has zero income?

Scammers are all around and they will continue unless someone stands up for what is right. I HATE to pay taxes just like anyone else, but come on now....if you have zero income and zero deductions, then who then paid for your living expenses?

Funny; client came to me wanted to file a zero return for a spouse to qualify for stimulus rebate???????????????????????????????

What nonsense this is. When asking client about any EARNED income; client stated spouse "may have had some $$ from craft sales". OK...so now it is subject to S/E taxes. Do you want to file a return when she owes money?

Answer....

"well most likely she didn't earn ANYTHING so lets forget about it, ok"?

Thank God the spouse is not my client.

hehehehe

Taoseno (talk|edits) said:

29 August 2008
Yes i don't understand it or condone these kinds of actions. The reason I am wondering is the former client is actually a good friend and I don't want to see him get into trouble. Can the client be held responsible for bad advice from the tax preparer? Thanks

Irsfixer (talk|edits) said:

29 August 2008
This is a tax protest scam and your friend is headed for many years of misery.

Mider (talk|edits) said:

29 August 2008
There has been a lot of refunds issued there but check out the frivolous penalties that are popping up there as well. $5,000 might be an eyeopener.

Sandysea (talk|edits) said:

29 August 2008
Tao....a good friend is one where you give your opinion and if the friendship is mutual, they will take you at your word.

UMMMM

Your "friend" signs the return under penalty of perjury...yes he can get in trouble.....

Frosty10 (talk|edits) said:

29 August 2008
Types of Fraudulent Activities - General Tax Fraud

Although not all inclusive, listed below are some of the criminal activities in violations of the tax law:

Deliberately underreporting or omitting income, Overstating the amount of deductions Keeping two sets of books Making false entries in books and records Claiming personal expenses as business expenses Claiming false deductions Hiding or transferring assets or income How do You Report Suspected Tax Fraud Activity? If you have information about an individual or company you suspect is not complying with the tax law, report this activity.



The above was copied from the IRS web site. If your friend had income and reports $0, is is going to be considered criminal fraud by the IRS.

Skasselea (talk|edits) said:

29 August 2008
Taoseno asks "Can the client be held responsible for bad advice from the tax preparer?"


You mean, "am I responsible for the tax return I sign?"


Uh, yeah.

Sandysea (talk|edits) said:

29 August 2008
"Perjury anyone"?????

JR1 (talk|edits) said:

August 29, 2008
Prison.

Taoseno (talk|edits) said:

29 August 2008
Yes that is what I thought and I told the guy to be very careful. What I don't understand is how could this guy have been in business since 1990 if this is illegal?

Sandysea (talk|edits) said:

29 August 2008
Website says in business since 1990...you can check that out too....he can say anything he wants.

But as well, if he did not get a nose up the arse by IRS doesn't mean it is NOT illegal. He flew under the radar but none the less, the entire thing is not legal...luckily statute of limitations applies so they will only put him in prison for the last few years and not the entire period...hehehe

Belle (talk|edits) said:

August 29, 2008
http://www.webcpa.com/article.cfm?articleid=28996&pg=ros

Taoseno (talk|edits) said:

29 August 2008
IRS needs to get off their arse and put people like this out of business............

Southparkcpa (talk|edits) said:

29 August 2008
I have never before heard of lost Horizons.

ANY client that would go to them you should be glad they did.

Who are they? I looked at the site a few minutes and can't seem to determine that they in fact prepare taxes?

Anybody ever hear of them before?

TheTinCook (talk|edits) said:

30 August 2008
Lost Horizons is a forum of crazy ass tax protestors. That particular scam, Cracking the Code, Pete Hendrickson (Factoid: He's also a convicted mail bomber) are reaching the end of the scam life span. The IRS has been getting better at cracking down on this style of returns.

Check out www.quatloos.com and their forum They spend a lot of time debunking that crap.

Mscash (talk|edits) said:

30 August 2008
YOU have lost a headache that has gone about three feet south. Now CYA!

I suggest that you write a letter firing the client stating that, in your opinion they are straying into frivolous territory and you want no part of it. Run off copies of a few Tax Court cases where a Section 6673 penalty was added and include them for bathroom reading.

Snowbird (talk|edits) said:

31 August 2008
I suspect they would claim selling educational material and not tax preparation. I have too much time on my hands since I am stuck at home due to my wife having total knee replacement ... so I looked at the website and found The Lost Horizons Forum. Did searches on the forum for "levy" and "seizure." It was like reading suicide notes, you just know what needless heartache they are letting themselves and families in for. Snipes is no big deal ... even after paying taxes, interest, penalties and lawyer fees, he is still richer than probably 100 of us put together ... not including Crow.

Taoseno (talk|edits) said:

1 September 2008
Thanks for all the help and I will keep everyone posted if my client receives all these giant refunds. From the looks of there forum many people are still waiting on refunds...........

Snowbird (talk|edits) said:

2 September 2008
"if my client receives all these giant refunds"

As long as the 1040X's are filed correctly, won't the IRS process and refund based on the 1040X? The fun starts when they audit the 1040X against W2'a and 1099's.

The only time I have had 1040X's rejected is when the information about the filed data was incorrect. Had a client amending for NOL carryback and thought the copy they had was the final copy ... should have ordered a transcript first :)

Death&Taxes (talk|edits) said:

2 September 2008
IRS can and will audit an amended return....but the only time I saw this, except in the case of one that was incorrect, was a Golden Parachute refund claim of 161,0000....and my client had dropped dead two days before the auditor came to my office.

Joanmcq (talk|edits) said:

5 September 2008
Ahhhh Lost Horizons! I found them through Quatloos and sometime peruse just to see how truly delusional people can be, in the face of even tax court. They will claim the judge is part of a widespread government conspiracy to deny them their rights, anything than to admit that just maybe, the book could be wrong.

Taocpa (talk|edits) said:

5 September 2008
You mean they aren't legit? Come on?! They have a report that says the WTC-7 mystery has been solved! They've cracked the IRC! They have to be legit! Image:smile.jpg

(Tongue firmly planted in cheek.)

Tom

Taoseno (talk|edits) said:

5 September 2008
It was not a big deal losing the client because he was a small tax client but the guy has become a good friend; and I really don't want to see him go to jail. I think he will probably get a $5,000 penalty and a letter w/ the word frivolous used frequently. Based on what the other people in the www.taxhorizons.com forum are saying recently; looks like the jig is up..............The guy is a local cowboy here that used to work on one of my clients ranches; he was laid off last year and could not keep up w/ the terms of his OIC agreement from two years ago so he is desperate I guess. I tried repeatedly to get the terms of the OIC changed but you guys/gals know how that goes. I will keep everyone posted. Thanks very much for all of your help.

Joanmcq (talk|edits) said:

5 September 2008
oh they (the CTC crackpots) are getting the 5k penalties and still claim they are illegal; claiming they are right all the way to prison, after all their assets have been seized. they will send in legal gobbledygook and then claim the IRS is ignoring their arguments...they are drinking whole gallons of the kool aid. All your friend has in his future is jails and destitution; jeez defaulting on an OIC and then going to protester status. He aint seen nothin' yet if he starts sending them CTC crap.

Taoseno (talk|edits) said:

5 September 2008
Yes the sad thing is he was 2/3 of the way through the OIC when he lost his job...........I tried to tell him!

Snowbird (talk|edits) said:

2 November 2009
I was doing a search to see if anyone else posted this link ...Federal jury finds tax protestor guilty

Tkelly911 (talk|edits) said:

2 November 2009
On Tuesday, October 27 I attended the 25th Annual UCLA Tax Controversy Conference, where this case was discussed. In attendance was the Deputy Chief Counsel, the Chief of Appeals, the Commissioner of SB/SE and the Chief and Deputy chief of Criminal Investigation (CI). They mentioned the conviction of the Lost Horizons founder with great satisfaction, and flat out said they are going to cherry pick his clients for criminal prosecution, not so much to single them out as to create publicity in order to discourage others. So while it may take time to root out these predators it is being done.

LiveFree (talk|edits) said:

5 November 2009
Post removed under the guidelines and policies of TaxAlmanac. For more information, refer to this page: TaxAlmanac, specifically the part about "TaxAlmanac is not a forum for fillibusters on the appropriateness nor the legality of the US tax system."

Kmarlin (talk|edits) said:

24 November 2009
I am not sure where to start this. Peter Hendricksen's interpretation are pretty correct. But he lost his case, how? Because it didn't matter even if he was incorrect. It is the relative aspect that he doesn't get. One, he did not even know who was his opponent. Two, he didn't know the area. Three, he did know the rules.

He was guilty and he doesn't know why. He calls it Judicial Tyranny but the court acted properly. He just does not get.

The people that are sending him checks are crazy for doing so. The IRS is going to come back and get the money returned. Those that are still getting checks think that some IRS worker is approving the refunds when most are done by computer. Now the IRS will take all of the one's that filed a substitue w4 to see if any of those have Hendricksen's Cracking the Code formula.

Hendricksen is now facing jail time. The Feds have gone after him for evasion. Once convicted they will be able to shut down his website.

I think that one of the main things that bother me about his website is that he is asking for people to donate money for his defense when he is boasting that his book is in it's eleventh printing. So, is it that he wants other people to pay for his defense while he pockets the money from his book? I just could not throw good money after a bad situation. He is going to lose.

As I stated above, his interpretations are pretty accurate. It is the relevance of when to apply those laws. That is the tricky part. The IRC cannot be used alone. You must place greater weight on what the Secretary's regulations to apply the IRC.

Snowbird (talk|edits) said:

5 July 2010
Update on this case ...

On June 29, 2010, Hendrickson began serving his current sentence at the Federal Correctional Institution at Milan, Michigan, inmate # 15406-039. His projected release date is November 18, 2012 link Also a note on LH board link 2

Every so often I will read the posts on LH because it shows how serious it can be to ignore IRS letters, etc.

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