IRS: Hipster Day Trader Owes $172 Million In Back Taxes

[Andy Nguyen]

He failed as a day-trader and barely survived in New York on a beer budget, but Marcos Esparza Bofill has been hit with a $172 million tax bill by the IRS.

"Who's the IRS?" Esparza Bofill, a twentysomething Spanish émigré, asked a friend who alerted him to his astronomical back taxes.

Esparza Bofill moved to New York from his native Spain in 2006 to try his hand at day-trading. When he nearly went bust after a year, he moved back home.

"He lost money while he was here. He couldn't afford rent," said friend Adam Baruchowitz of Brooklyn.

Esparza Bofill didn't file an income tax return for the year he was here swapping stocks - and that's leading to big problems with Uncle Sam.

The feds tracked his every trade. But because Esparza Bofill never accounted for his losses or expenses in tax filings, the IRS presumed he made a pure profit - a staggering $500 million in income.

Read more: Trader nailed with $172 million bill in back taxes, asks
IRS: Hipster Day Trader Owes $172 Million In Back Taxes - Gothamist
IRS Claims Hipster Owes $172 Million | The Smoking Gun

 

[euroazn]

Hahaha... oh the morals in this story.

 

[Anthony DeAngelis]

Good luck collecting from a Spanish citizen lol. The IRS messed up a mutual fund sale of mine, I faxed them some documents and spoke to some people on the phone. Pretty pleasant experience actually.

 

[helpteye]

Yeah, they tried to hit me with a $11K bill from 08, despite the fact that my profit that yr was about half that; I had to send an explanation form with my actual trades showing my true profits. The online brokerage that I was using seems to send to the IRS only proceeds from sells, and not whether it was profit or loss. I sent them a long letter. lol.

 

[Andy Nguyen]

My advice is to use Quicken or Quickbook to keep track of your finance and have a really good accountant.
You pay a fraction of that for an accountant and avoid having unexpected bill for the next three years. NYS has three-year statute of limitations on tax audits but the IRS can go way back if it suspects tax fraud.