According to this Dakota County Criminal Complaint, a local construction company owner has been charged with tax evasion between 2003 and 2010 all because a tipster supposedly claimed he, “had been living the high life, driving expensive vehicles and going on nice vacations.”
From the complaint:
For the tax years of 2003 to 2007, tax assessment amounts were established for Langford by the Minnesota Department of Revenue after Langford failed to respond to MDOR requests that he file a delinquent return for those years. Total estimated delinquent taxes that Langford owes for tax years 2003 to 2007 equals approximately $91,217.00.
[...]
Audit staff obtained bank records for Langford, which showed considerable monetary deposits
for the tax years 2008, 2009 and 2010, and which equaled approximately $900,000.00 in unreported
gross income.[...]
Langford’s income tax for the years 2008-2010 were estimated as follows:
2008–$283,381.00 Gross Income – estimated tax due for this year, not including penalties and interest: $17,437.00
2009–$224,869.00 Gross Income – estimated tax due for this year, not including penalties and interest: $13,582.00
2010–$387,730.50 Gross Income – estimated tax due for this year, not including penalties and interest: $22,840.00
Now, tax evaders are lowdown and dirty people who deserve every fine and potential for jail time that’s coming to them. However, the entire reason this individual was supposedly under scrutiny was because some “tipster” was annoyed he owned nice cars and went on expensive trips. Neither of those things are illegal and neither should be cause for the Minnesota Department of Revenue to investigate anyone. However, even if he had been paying taxes, it’s very likely he would have been able to afford expensive cars and trips anyway being that he was pulling in an average of $300,000 in gross income a year between 2008 and 2010. Newsflash “tipster”, people making $300,000 are considered “rich” in our great nation, stop whining about it.
What is your cut off for “rich” people? If you saw a neighbor driving expensive cars and/or going on nice vacations would your first instinct be to contact the IRS or Minnesota Department of Revenue? Does this sound like a relationship gone bad to you and the need for revenge fulfilled by hanging him out to dry with the IRS and MNDOR? Whatever you have to say about this one go ahead and comment on as I’d love to hear your thoughts.
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November 16th, 2012 at 9:24 am
This is the result of decades of class warfare and the politics of envy. If someone else has something, obviously they don’t deserve it and it should be taken from them and given to me. I just had this discussion yesterday with someone about the fiscal cliff. They thought it was OK to take more money from “the rich” because “they can pay more.” When I asked why it was ethical to take someone else’s property just because you could the person could not answer. Nobody realizes that the implications of taking other’s property and/or freedoms will eventually come around to them.
Some one has a nice car and a nice house. They don’t deserve it. Take it from them and pay for my rent and tuition.
http://www.youtube.com/watch?v=DL-a-r7iJIU
November 16th, 2012 at 10:16 am
We get fraud calls all the time because someone is suspected to be on welfare and has “things.” Things like cars, phones, clothes, iPods, etc. We are required to investigate every fraud complaint, and I wouldn’t be surprised if DOR is required to do the same thing. Usually it is someone trying to get back at someone else.
In this case, I’m guessing there were rumors that they weren’t paying their taxes and someone got mad and called it in. DOR had to investigate, and this time it was actually fraud. People get really mad when people think someone isn’t paying their fair share or getting something they don’t deserve.
November 16th, 2012 at 10:28 am
Sean,
I agree with you to a point. My problem with the rich are that they are able to exploit loopholes due to their available disposable income that the majority of people do not have. If the rich actually paid their fair share, like the rest of us seem to, then I would not be asking anyone to pay more than another person.
This also exists for those who are poor. They need to pay their fair share too (see Kassie’s comment) and as long as they are and they’re paying an effective tax rate consistent with the rest of the nation, I’m cool w/it.
Basically what this comes down to are options available to those who have a lot of money that are borderline illegal which are not available to the rest of the people. Close the fucking loopholes and make everyone pay–this will not solve the problems which were the genesis of this discussion but it certainly will be much better in the long term IMO.
November 16th, 2012 at 10:34 am
Idiots exist everywhere. So no shock some construction company guy found a way to piss someone off such that they would report the person to the IRS. That’s my guess for the motivation, and the idea of nice cars and trips is just the evidence necessary to get the IRS to act.
I often look at the value of money today vs the 80′s. The 80′s were when my father was at his peak earning potential, and I have a sense of what his income may have been then (he and I don’t talk about our income). So if I figure he was around $50,000 in 1986 (probably a bit low) but a good benchmark. What would I need to earn to make that equivalent today?
Well 2012 numbers are not out yet, but looking at 2011 and using the Consumer Price index, to get the same value as my dad got with $50,000 I would need to have income of $103,000.00. Even with my Wife’s income, together, we’ve never hit that and I doubt we will. And if you’re at 85K today, that’s the same as around 45k in 1986.
Today I think someone who is rich is someone that can buy a home for $450,000. On such a home you’d be looking at payments (at 5% interest, 30 years) around $2,415.70 per month. Figure that is no more than 30% of your income which means your income would be around $8k per month for a net of 96,000 per year which would be a gross around $144,000 (48,000 in taxes).
So I guess for me, if you make $150k per year gross, you’re doing pretty darn well. Rich? well looking at the income distribution in the U.S., I’d say yeah, you’re right there at the cusp of rich at 150k. Should people at that level be taxed more vs the folks below that level? Probably, but when it comes to that, I think it is probably the 150k to 500k earners that provide the most jobs as small to mid size business owners. Once you get above that you’re onto folks that are just plain rich.
I agree something needs to be done with loopholes but what? Many loopholes are there to force spending by wealthy people in other areas. I.e. charities benefit dramatically from the ability of rich people to reduce their taxes by donating money to charities. Take that deduction away, what happens to the charities?
November 16th, 2012 at 12:46 pm
‘Rich’ is considered $250,000 based on all the political talk leading up to the election earlier this month.
November 16th, 2012 at 12:58 pm
You mean rich as in having money – or rich as in having time? Depends on how big your family is I guess. $100,000 a year for 4 people is different than $100,000 for 7 people. I think if you make 6 digits in this country – you’re better off than most people. That being said – most people making 6 digits have given up the valuable resource of time. To tax them to make things “equal” – you would have to give them some of their time back. When you have time – you can mow your own lawn, wash your own windows, etc. You have the ability to save money. Many times – people making more don’t have this luxury of time. So – if we are going to tax their increased earnings to make things “equal” – you have to figure time into it also or it will never be truly equal.
November 16th, 2012 at 6:28 pm
I’m no expert and could be wrong on this, but my understanding of sole proprietorships (which this guy had per the complaint) and tax law is that your business income is taxed as your personal income, i.e. what the complaint lists as his income is his company’s revenue. As such, his take-home income after business expenses was likely a lot less than that and he probably only made $200K to $300K on paper. It’s possible that led to the suspicion about his lifestyle, but who really knows.
Ben, I’ll grant you that people who make more money generally work longer hours, but there can be huge variations just among people who, say, work 40 hours a week, let alone other amounts. It’s not like someone who makes $50K works 50 hours, so a person that makes $100K works 100 and a person that makes $150K works 150 hours. It’s all over the place.
Regarding what amount of money makes someone rich, this gets tricky because there is definitely a difference between feeling rich in subjective terms and being rich in absolute terms. I’ve had single friends who really didn’t make much money, but had really low living expenses and no debt, and thus could buy things and go on trips whenever they wanted for the most part. And I’ve known couples with advanced degrees and excellent-paying jobs, but who also had children and lifestyles that cost a lot of money (a nice house, late-model cars, etc), making them feel a lot more stretched. A person’s peer group has a lot to do with it too — if everyone around you is well-off, you won’t notice being well-off yourself as much.
November 16th, 2012 at 7:05 pm
Bill I don’t disagree with that at all. The entire tax code should be scrapped and replaced with a flat tax or national sales tax. I was watching one cable news program where they printed out the entire current tax code and it was several feet tall! All of these “goodies” are written in for those who can afford lobbyists and buy “influence”, or by politicians that want to buy a certain segment of the electorate. Besides letting certain individuals gain unfair advantages, it also allows outrageous situations like the one where GE paid no taxes in 2010 on over $14.2 billion in profit. Good luck getting the laws changed though. The two parties are too entrenched in their ways and neither of them have the courage to attack the problem. All of this talk about “tax reform” is nothing more than reshuffling the deck chairs on the Titanic.
November 17th, 2012 at 8:35 am
what i get out of the complaint is,
operating several businesses under assumed names.
never filed tax returns.
failed to respond to inquires.
unreported gross income.
multiple business names changed often during the years.
never registered with the state.
and the best for last.
didn’t realize he had to file a tax return:)
rich or poor, 900 large or 90 large, this bum tried to game the system. AND, it wasn’t the lavish life style that got him in the end. he ‘bragged’ to the wrong person and got turned in.
lefty can park his bently or rolls in my driveway while he takes his G4 to dubai for lunch any time!!
bb
November 17th, 2012 at 12:58 pm
I wouldn’t be so sure that the “tipster” in this case was a jealous neighbor or an equity-redistribution zealot.
Dakota County District Court records (see Case No. 19HA-CV-10-6327) show Langford defaulted on a Citibank loan, apparently had it turned over to a collection agency, and then may have tried to duck service of a court summons related to the case in 2010.
I suspect that the discovery of Langford’s failure to file taxes stemmed more from pissing off a creditor than from class warfare.
November 17th, 2012 at 4:12 pm
Sole Proprietorship essentially means there is no company. All income and expenses flow through the owner and are reported on his individual taxes.
Rich for the purposes of income discussions has nothing to do with your individual expenses. Simply your net income. I’m sure there are multi-millionaires that put themselves in positions where they can’t make their mortgage payments, but that doesn’t make them poor.
Median income in Dakota County is 69,902. Seems high to me, but I guess we do lack multi-family housing compared to other counties. U.S. Median income is $50,054. My guess that means to many of us in MN, we see rich at a higher income level than the average American might.
http://www.co.dakota.mn.us/About/Facts/Pages/default.aspx
November 18th, 2012 at 7:33 am
Jim,
I can’t imagine a creditor being a “tipster” claiming he, “had been living the high life, driving expensive vehicles and going on nice vacations.” That just doesn’t seem like something they’d do. But I could certainly be wrong.