Photo by cottonbro studio Last week, the Internal Revenue Service Criminal Investigation unit released its fiscal year 2024 annual report that touted the success the agency’s law enforcement branch had in taking down tax criminals. Yes, Al Capone’s name was mentioned. This week it’s the overall IRS’ turn to brag. In its quarterly update on Dec. 12 to its Strategic Operating Plan, the IRS detailed accomplishments that have, among other things, allowed the IRS to recovered $4.7 billion in taxpayer dollars. More than $1.3 billion of that total comes from wealthy, high-income individuals who have not filed taxes or paid... Read more →
Law
The holiday most associated with Al Capone is Valentine’s Day, but the Internal Revenue Service’s top law enforcement officer has invoked the legendary gangster in this most festive of seasons. “FY24 was one for the history books. For years, IRS-CI has been known as the agency that took down Al Capone, but this year, our cases hold their own place in U.S. history,” said IRS-CI Chief Guy Ficco in announcing the release of IRS Criminal Investigation’s (IRS CI’s) latest fiscal year (FY) report on Thursday, Dec. 5. “As with Al Capone, financial trails eventually lead to criminals’ downfall,” said Ficco.... Read more →
You don't get the World's Best Boss title if you don't understand, and comply with, employment tax requirements. (Photo: Steve Carell as Michael Scott in The Office; NBC Universal Television Studios) Every worker is aware of payroll taxes. These amounts are taken out of paychecks and then sent by your boss to the various appropriate state and federal tax agencies. At the federal level, the primary payroll reductions cover income taxes, as well as Federal Insurance Contributions Act (FICA) amounts that are paid by both employees and employers to fund Social Security and Medicare. While it’s our earnings that are... Read more →
iStock Texas’ unofficial motto has always been go big or go home. Or, in the case of one former tax professional, go out of business. The U.S. District Court for the Northern District of Texas on Nov. 1 entered permanent injunctions against Charles Dombek and The Optimal Financial Group LLC barring both from promoting any tax plan that involves creating or using sham management companies, deducting personal non-deductible expenses as business expenses, or assisting in the creation of “captive” insurance companies. The injunctions also prohibit Dombek from preparing any federal tax returns for anyone other than himself and Optimal from... Read more →
The Internal Revenue Service does more that issue red cards for tax penalties. Filing mistakes, unintentional or otherwise, could mean costly penalties, some of which increase due to inflation. (Photo by BOOM 💥) The United States' tax system depends on voluntary compliance by taxpayers. But Uncle Sam is no fool. He and his tax collectors are believers of the adage "trust, but verify." The Internal Revenue Service also follows up on that verification with penalties when it finds taxpayers — and the professionals we pay to take care of our taxes — aren't fulfilling our tax responsibilities on our own.... Read more →
Water & Land Solutions A conservation easement is a way for landowners to retain ownership and use of their property, while also ensuring that the property’s resources are protected for future generations. In many cases, the easements are donated to nonprofit organizations, providing a nice tax break. Conservation easements also are sometimes used to evade taxes. In fact, bogus arrangements are regularly included in the Internal Revenue Service’s annual Dirty Dozen list of tax scams. In addition to warning taxpayers about abusive conservation easements, the IRS also is intent on stopping, and bringing to justice, those who promote these tax... Read more →
The tax community’s focus this year initially was on what the U.S. Supreme Court would decide in Moore v. United States. That case dealt with the Tax Cuts and Jobs Act’s Mandatory Repatriation Tax on corporations’ foreign earnings. There was concern that if the justices invalidated the tax, which attributes the realized and undistributed income of an American-controlled foreign corporation to the entity’s American shareholders, the entire U.S. tax code could unravel. Those fears were alleviated on June 20 when the Supreme Court of the United States (SCOTUS) upheld the repatriation tax. But a new tax worry popped up in... Read more →
Photo by cottonbro studio The Internal Revenue Service's whistleblower program helped the agency collect $338 million in fiscal year 2023. The IRS Whistleblower Office also noted in its 2023 report, issued on June 24, that it paid whistleblowers 121 awards, totaling $88.8 million, for the revenue-increasing information. That awards total was more than double the $37.8 million the office paid in fiscal 2022. But the total number of whistleblower awards for FY23 dropped, going from 132 in 2022 to 121 the following fiscal year. And to keep the Whistleblower Office on pace to help with tax compliance, the latest report... Read more →
Update, Friday, Oct. 11, 2024: Following the devastation of Hurricane Milton across central Florida on Oct. 9, the Internal Revenue Service today granted tax relief to those affected taxpayers, giving them until May 1, 2025, to meet a variety of tax filing and payment obligations. In addition, it granted this relief and new May due date to all Florida taxpayers. You can find details in my post on the IRS move. Update, Thursday, June 27, 2024: The Internal Revenue Service today granted tax relief to Mississippi taxpayers in major disaster areas from early-April severe weather in that state. You can... Read more →
Paul Baxendale-Walker, a former tax advisor and attorney, or solicitor as the profession is known in the United Kingdom, has had his share of run-ins with British officials. Most recently, Baxendale-Walker was facing a £14 million penalty ($17.7 million U.S.) sought by His Majesty's Revenue & Customs, or HMRC, the British version of our Internal Revenue Service. HMRC filings against the Baxendale-Walker estimate his schemes have cost the exchequer some £1 billion ($1.27 billion U.S.) in lost taxes. Now, however, Baxendale-Walker is off the hook for the fine. But what's probably more frustrating for U.K. tax officials that losing out... Read more →
Unsplash+ in collaboration with Leire Cavia Juneteenth commemorates a key stage in the end of slavery, June, 19, 1865. That’s the day when official word arrived in Galveston, Texas, that President Abraham Lincoln had signed the Emancipation Proclamation 2½ years earlier. But even as we celebrate the newest U.S. federal holiday, we are aware that work remains to ensure fairness throughout the country. The latest challenge involves Fearless Funds, an Atlanta-based venture capital (VC) firm's nonprofit grant program. Grant issuance was halted this month by a federal appeals court panel ruling. Grants program, lawsuit background: Fearless Funds was sued last... Read more →
Photo by Ben White on Unsplash Remember the Paradise Papers? They are part of the alliterative financial revelations by the International Consortium of Investigative Journalists (ICIJ). Per the ICIJ’s blurb, the Paradise Papers reveal in 2017 exposed the “secrets of the global elite” hidden in the files of “prestigious offshore law firms, a specialized trust company and 19 company registries in secrecy jurisdictions.” That ICIJ financial scoop was preceded in 2013 by the Panama Papers, and followed in 2021 by the Pandora Papers. Now, best-selling Swedish author Håkan Nesser, whose name appeared in the Paradise Papers, has been sentenced to... Read more →
Alcatraz Island's federal penitentiary once housed the most infamous tax evader, Al Capone. This particular Big House is no longer used to house felons, but the U.S. legal system has plenty more facilities where it can send those convicted of tax crimes. (Photo by Chris6d - Own work, CC BY-SA 4.0) Being a Big Law attorney has its benefits. Working for one of the most prestigious law firms in the United States, usually in one of the country’s major metropolises, means prestige and money. But one such attorney apparently didn’t properly report his income to the Internal Revenue Service. And... Read more →
Unsplash+ in collaboration with George Dagerotip President Joe Biden last week endorsed the Department of Justice's (DoJ) move to reclassify marijuana from a Schedule I drug to a Schedule III drug. Biden said in social media posts — X (aka Twitter) and YouTube — that the move would reverse “long-standing inequities” under the current criminalization of cannabis. "Look folks, no one should be in jail merely for using or possessing marijuana," the president said in his video statement. Not legalization, but lowering federal interest: The Justice Department move would not legalize marijuana outright for recreational use, which currently is the... Read more →
Those who enter the New York Criminal Courts building are greeted by Thomas Jefferson's words engraved on the façade. The third U.S. president cited "equal and exact justice to all men of whatever state or persuasion" as one of the essential principles of American democracy. (Photo by Carl Mikoy, Flickr Creative Commons) In September 2019, Donald J. Trump changed his official residence from New York to Florida. The then-president gave no official reason for the paperwork move. However, one reason likely was the Sunshine State’s lack of a personal income tax. Though Trump refused to release his federal or state... Read more →
You don’t like the taxes being withheld from your paychecks, but at least you know your tax money is going to fund government services. Most of the time. In some cases, those responsible for getting income and other payroll taxes to Uncle Sam don’t comply with their legal responsibility to collect and deliver the funds to the Internal Revenue Service. Nearly $2.7M unremitted tax: It’s that delivery portion that’s usually the bigger issue. And that’s what a Maryland woman pleaded guilty to today. The woman, whose name is in the official Department of Justice complaint filed back in January, but... Read more →
With the expansion of the white-collar crime of money laundering into financial adviser sectors, federal officials are looking to extend regulations to those areas. (Photo via Unsplash+ in collaboration with Getty Images) The Treasury Department's Financial Crimes Enforcement Network, typically referred to as FinCEN, has in recent months amped up efforts to stop money laundering. FinCEN's latest proposals are designed to close loopholes that officials say foreign and domestic criminals use to launder money through U.S. financial sectors. This week, the changes got support from Capitol Hill and beyond. Seven U.S. Senators sent a letter to Treasury Secretary Janet Yellen... Read more →
Unsplash+ in collaboration with Getty Images The smartest tax move often if hiring a good tax professional. Unfortunately, the tax community is not immune to bad actors. Every year, the Internal Revenue Service warns taxpayers to thoroughly vet the person they want to hire to handle their taxes. Every year, the IRS also issues warning about unscrupulous tax preparers who take advantage of trusting taxpayers and take their money. These alerts also are routinely part of the IRS annual Dirty Dozen scam list; dishonest tax pros is #6 on the 2023 list. (Preview: the 2024 list is on its way... Read more →
Ill-gotten gains used to fund a lavish lifestyle. For 10 years, a Rhode Island man ran a Ponzi scheme that ultimately left conned investors empty handed, while he used the funds to pay for his own lavish lifestyle. At the same time, Thomas Huling, 58, of West Warwick, also was ripping off the U.S. Treasury. On March 19, Huling was sentenced to eight years in federal prison for those crimes. The jail term comes 18 months after he pleaded guilty, back in September 2022, to wire fraud and tax evasion. Under the plea deal, the government agreed to the dismissal... Read more →
The Internal Revenue Service's law enforcement arm is getting a new chief next month. Guy Ficco, current Deputy Chief of Internal Revenue Service Criminal Investigation (IRS-CI), will take the reins from current IRS CI Chief James Lee on April 1. Lee, who took over as the tax agency's top law enforcement officer in October 2020, is retiring. As head of IRS CI, Ficco will oversee a worldwide staff of more than 3,200 employees, including 2,200 special agents who investigate crimes involving tax, money laundering, public corruption, human trafficking, drug trafficking, cybercrime, and terrorism-financing. Long-time IRS member: Ficco, pictured at left,... Read more →