'Who’s the IRS?' Spanish former day trader about to find out

When Marcos Esparza Bofill got a tax bill from the Internal Revenue Service for more than $172 million, he asked a friend, “Who’s the IRS?” He’d spent more than a year working as a day trader in New York. Yet, he never heard about a little ritual we call: paying income tax.

Known to friends as Esparza, in 2006 he emigrated from Barcelona, Spain, when he was in his late twenties. He started with $20,000 and ended up having to borrow money just to pay the rent on his walk-up apartment in a Manhattan neighborhood known as Alphabet City.
 
Over a year later, Esparza gave up and returned to Spain broke. Unfortunately for him, the IRS had tracked every trade he made. When no tax return was filed, the tax agency assumed he’d made 100 percent profit – in this case, a profit of $500 million – and they sent him a bill for $172,101,056.
 
Esparza already was back in Spain when the tax lien notice was mailed to his former residence. So his friend, Adam Baruchowitz of Brooklyn, broke the news. That’s when Esparza asked the question, “Who’s the IRS?”
 
“He definitely wasn’t a $500 million-a-year earner. He lives a very modest life. So just to think that all of a sudden he owes $172million is pretty ridiculous," an unidentified friend told the New York Daily News. The friend, who described Esparza as a garage musician, added, “He doesn’t know what’s going on, ya know. Like, he’s not an American native.”
 
So, does that get him off the hook?
 
Marc Albaum, a CPA practicing in Manhattan, did not seem surprised this happened. He told the Daily News, "If you don't file, the IRS assumes that you have 100 percent profit; basically it's as if you bought the stock at no cost. Now, the remedy for this is simply to file. He could wipe out anything he owes.”
 
What does Esparza, now 32 years old, have to say? He’s not worried. After discovering that he can now Google his name and find he’s suddenly a hot topic, he said the incident has brought him fame. On Facebook he describes himself in Spanish this way: I’m a fugitive. Catch me if you can.
 
"It's all a mistake," Esparza told the Daily News. "I only have to fill [out] the correct forms and everything will be solved. I do have people taking care of this."
 
Chances are he will not end up paying much if anything. But, it still might have been a bit brazen to let himself be photographed for the newspapers giving the IRS the finger. All of this might have been a mistake, but it was his mistake, not the fed’s.
 
Related articles:
 

You may like these other stories...

Many senior US tax professionals believe that a streamlined audit process will be the top benefit resulting from the IRS Transfer Pricing Audit Roadmap, a new toolkit organized around a notional 24-month audit timeline,...
Tax accounting to be simplified for money-market fundsThe US Securities and Exchange Commission (SEC) voted 3-2 on Wednesday for sweeping changes to institutional money-market funds, Emily Chasan, senior editor of...
By Cathy Stopyra and Todd SimmensUnderpayment interest, refund interest, and penalties charged to businesses are just a few of the considerations the IRS calculates when determining taxation for a given company. Though...

Upcoming CPE Webinars

Jul 31
In this session Excel expert David Ringstrom helps beginners get up to speed in Microsoft Excel. However, even experienced Excel users will learn some new tricks, particularly when David discusses under-utilized aspects of Excel.
Aug 5
This webcast will focus on accounting and disclosure policies for various types of consolidations and business combinations.
Aug 20
In this session we'll review best practices for how to generate interest in your firm’s services.