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Today's tax tip is simple: If you owe the IRS money and an agent comes knocking at your door, there are a number of ways to handle the matter. Offering the agent free pizza and cash in exchange for reducing your tax liability? Probably not the best approach.

Ramesh G. Khilnani, 51, a Houston-area resident and a native of India, offered an IRS agent free pizza and "work" after he was told he owed $49,000 in back taxes for the years 2004-2007 as the result of an audit.

WebCPA reports that after the auditor reported the incident to her supervisor, "Agents from the Treasury Inspector General for Tax Administration arranged for the recording of subsequent meetings – via telephone and in person -- between the agent and Khilnani. During the course of these contacts, Khilnani offered the agent $2,500 and delivered $2,000 in exchange for having his tax liability reduced from $49,000 to around $500. In addition to financial compensation, Khilnani repeatedly offered the agent pizza from his restaurant as part of the deal."

Khilnani pled guilty to bribery charges and was sentenced to two years in federal prison and could face deportation once he is released.

Taxes in the News

    WASHINGTON - MAY 28: Dan Danner (L), Independent Business President and Chief Executive Officer, and Ron Williams (C), Aetna Inc. Chairman and Chief Executive Officer look over their papers while Ron Pollack (R), Families USA Executive Director speaks during a press conference at the National Press Club May 28, 2009 in Washington, DC. Ron Williams, Aetna Inc. Chairman and Chief Executive Officer, was joined by Ron Pollack, Families USA Executive Director, and Federation of Dan Danner, Independent Business President and Chief Executive Officer, to speak about hidden costs in healthcare caused by cost shifting to pay for treatment of uninsured patients. (Photo by Brendan Smialowski/Getty Images) *** Local Caption *** Ron Pollack;Ron Williams;Dan Danner

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    WASHINGTON - MAY 28: Ron Pollack, Families USA Executive Director speaks during a press conference at the National Press Club May 28, 2009 in Washington, DC. Ron Williams, Aetna Inc. Chairman and Chief Executive Officer, was joined by Ron Pollack, Families USA Executive Director, and Dan Danner, Federation of Independent Business President and Chief Executive Officer, to speak about hidden costs in healthcare caused by cost shifting to pay for treatment of uninsured patients. (Photo by Brendan Smialowski/Getty Images) *** Local Caption *** Ron Pollack

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    WASHINGTON - MAY 28: Ron Williams (L), Aetna Inc. Chairman and Chief Executive Officer and Ron Pollack (R), Families USA Executive Director listen to Dan Danner (C), Federation of Independent Business President and Chief Executive Officer speak during a press conference at the National Press Club May 28, 2009 in Washington, DC. Ron Williams, Aetna Inc. Chairman and Chief Executive Officer, was joined by Ron Pollack, Families USA Executive Director, and Dan Danner, Federation of Independent Business President and Chief Executive Officer, to speak about hidden costs in healthcare caused by cost shifting to pay for treatment of uninsured patients. (Photo by Brendan Smialowski/Getty Images) *** Local Caption *** Dan Danner;Ron Pollack;Ron Williams

    Getty Images

    WASHINGTON - MAY 28: Dan Danner (L), Federation of Independent Business President and Chief Executive Officer and Ron Pollack, Families USA Executive Director, listen to Ron Williams, Aetna Inc. Chairman and Chief Executive Officer speak at the National Press Club May 28, 2009 in Washington, DC. Ron Williams, Aetna Inc. Chairman and Chief Executive Officer, was joined by Ron Pollack, Families USA Executive Director, and Dan Danner, Federation of Independent Business President and Chief Executive Officer, to speak about hidden costs in healthcare caused by cost shifting to pay for treatment of uninsured patients. (Photo by Brendan Smialowski/Getty Images) *** Local Caption *** Ron Williams;Ron Pollack;Dan Danner

    Getty Images

    WASHINGTON - MAY 28: Ron Williams, Aetna Inc. Chairman and Chief Executive Officer listens during a press conference at the National Press Club May 28, 2009 in Washington, DC. Ron Williams, Aetna Inc. Chairman and Chief Executive Officer, was joined by Ron Pollack, Families USA Executive Director, and Dan Danner, Federation of Independent Business President and Chief Executive Officer, to speak about hidden costs in healthcare caused by cost shifting to pay for treatment of uninsured patients. (Photo by Brendan Smialowski/Getty Images) *** Local Caption *** Ron Williams

    Getty Images

    WASHINGTON - MAY 28: Dan Danner (L), Federation of Independent Business President and Chief Executive Officer and Ron Pollack, Families USA Executive Director, listen to Ron Williams, Aetna Inc. Chairman and Chief Executive Officer speak at the National Press Club May 28, 2009 in Washington, DC. Ron Williams, Aetna Inc. Chairman and Chief Executive Officer, was joined by Ron Pollack, Families USA Executive Director, and Dan Danner, Federation of Independent Business President and Chief Executive Officer, to speak about hidden costs in healthcare caused by cost shifting to pay for treatment of uninsured patients. (Photo by Brendan Smialowski/Getty Images) *** Local Caption *** Ron Williams;Ron Pollack;Dan Danner

    Getty Images

    WASHINGTON - MAY 28: Dan Danner (L), Federation of Independent Business President and Chief Executive Officer listens to Ron Pollack (R), Families USA Executive Director speak at the National Press Club May 28, 2009 in Washington, DC. Ron Williams, Aetna Inc. Chairman and Chief Executive Officer, was joined by Ron Pollack, Families USA Executive Director, and Dan Danner, Federation of Independent Business President and Chief Executive Officer, to speak about hidden costs in healthcare caused by cost shifting to pay for treatment of uninsured patients. (Photo by Brendan Smialowski/Getty Images) *** Local Caption *** Ron Pollack;Dan Danner

    Getty Images

    WASHINGTON - MAY 28: Dan Danner, Federation of Independent Business President and Chief Executive Officer listens during a press conference at the National Press Club May 28, 2009 in Washington, DC. Ron Williams, Aetna Inc. Chairman and Chief Executive Officer, was joined by Ron Pollack, Families USA Executive Director, and Dan Danner, Federation of Independent Business President and Chief Executive Officer, to speak about hidden costs in healthcare caused by cost shifting to pay for treatment of uninsured patients. (Photo by Brendan Smialowski/Getty Images) *** Local Caption *** Dan Danner

    Getty Images

    WASHINGTON - MAY 28: Ron Williams, Aetna Inc. Chairman and Chief Executive Officer waits to speak at the National Press Club May 28, 2009 in Washington, DC. Ron Williams, Aetna Inc. Chairman and Chief Executive Officer, was joined by Ron Pollack, Families USA Executive Director, and Dan Danner, Federation of Independent Business President and Chief Executive Officer, to speak about hidden costs in healthcare caused by cost shifting to pay for treatment of uninsured patients. (Photo by Brendan Smialowski/Getty Images) *** Local Caption *** Ron Williams

    Getty Images

    WASHINGTON - MAY 28: Ron Williams, Aetna Inc. Chairman and Chief Executive Officer speaks at the National Press Club May 28, 2009 in Washington, DC. Ron Williams, Aetna Inc. Chairman and Chief Executive Officer, was joined by Ron Pollack, Families USA Executive Director, and Dan Danner, Federation of Independent Business President and Chief Executive Officer, to speak about hidden costs in healthcare caused by cost shifting to pay for treatment of uninsured patients. (Photo by Brendan Smialowski/Getty Images) *** Local Caption *** Ron Williams

    Getty Images


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How to Write Off Sales Taxes

For the years 2005 through 2013, the Internal Revenue Service (IRS) permits you to write off either your state and local income tax or sales taxes when itemizing your deductions. People who live in a state that does not impose income taxes often benefit most from this deduction. However, you might also be better off deducting sales taxes instead of income taxes if you make large purchases during the year and your total sales tax payments exceed those for state income tax. You can use either the actual sales taxes you paid or the IRS optional sales tax tables.

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