Special agents with the Internal Revenue Service Criminal Investigation have an impressive conviction rate on their case. (Photo by Unsplash+ in collaboration with Getty Images) Fiscal 2023 was a good year for the Internal Revenue Service Criminal Investigation division. The law enforcement unit initiated more than 2,676 criminal investigations, identified $37.1 billion from tax and financial crimes, and obtained an 88.4 percent conviction rate on prosecuted cases. Those figures were part of IRS CI's Fiscal Year 23 Annual Report released this week. They were attained by following the money, which is a key technique of the only federal law enforcement... Read more →
Tax crimes
Unsplash+ in collaboration with Getty Images The Internal Revenue Service and its Security Summit partners today wrapped up the eighth annual National Tax Security Awareness Week with a warning for everyone, individual taxpayers and tax pros, to stay alert to emerging tax scams. It's a message the group issues regularly throughout the year because con artists work year-round to steal our money and, in many cases, our identities. Once they get that personal data, they can file fake tax returns to try to collect fraudulent refunds. By now, most of us are well aware of the warning signs of scams... Read more →
Tax mistakes, unintentional or otherwise, mean penalties when discovered by the IRS. And the amounts could add up. (Photo by Polina Tankilevitch) 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. The most severe punishments come via criminal tax prosecutions. The IRS... Read more →
People are increasingly falling for a new scam known as pig butchering. The scheme involves cryptocurrency purchases, and the promised outcome is as reliable as flying pigs. (Photo by Daniel Novykov on Unsplash) The Internal Revenue Service Criminal Investigation (CI) unit has some advice as the holiday season nears. Don't be a pig. No, the warning has nothing to do with over-eating, starting with next week's Thanksgiving spreads. Rather, IRS CI says crooks are reaching out on social media, typically seeking those looking for romantic partners, to get the targeted victims' help in cryptocurrency schemes. These targets, whom the fraudsters... Read more →
Tax crimes that happen in Vegas, don't stay in Vegas. They end up with the convicted felon heading to federal prison. That's what happened to Scott H. Lawrence. The Las Vegas man pleaded guilty in July to more than $1.9 million in federal tax evasion. On Nov. 3, he was sentenced to one year and one day in jail. Growing tax evasion scheme: The tax troubles that finally landed Lawrence in jail grew out of an attempt to keep the Internal Revenue Service from collecting an earlier tax bill. And the criminal effort was years in the making, according to... Read more →
I get alerts every day from search engines, the U.S. Department of Justice, and emails from my unpaid tax researcher, also known as the hubby, on tax crimes. Many of the tales of tax offenders end up in the weekly Tax Felon Friday feature. Today, however, I'm focusing on official efforts to facilitate such felonious tax actions. Taking from the IRS: The U.S. House this week approved financial aid for Israel. The GOP bill to provide Israel $14.3 billion calls for that amount to be offset by taking funds, once again, from the Internal Revenue Service. The vote is latest... Read more →
Unsplash+ in collaboration with Allison Saeng Ghost sightings are common this time of year. Some companies, however, find that ghost employees haunt their businesses year-round. Ghoulish tax tricks are also played on workers by some ghost employers. In both cases, the actions are not just criminal, but also are costly to all, including Uncle Sam, who are victims of these scary tax evasion tactics. Haunted by ghost workers: A ghost employee is a fictitious employee set up in a company's human resource and/or payroll system that receives paychecks. Basically, ghost workers are a form of embezzlement, as the nonexistent employees... Read more →
The rich and famous frequent Monaco's glamorous casinos. The European principality also was the base for a U.S. taxpayer who didn't report all his taxable income to the IRS. The lesson, for him and an unconnected counterpart in the prime U.S. gambling destination of Nevada, is that the house — in this case, Uncle Sam's tax agency — usually wins. (Photo by Kaja Sariwating on Unsplash) Many people liken dealing with the U.S. tax code to wagering. You try to follow the casino rules and common sense, but the temptation to push your luck is often too enticing. Sometimes those... Read more →
Photo by Brett Jordan on Unsplash The Internal Revenue Service relies on taxpayers voluntarily filing correct tax returns and paying the tax amount shown on those forms. Millions will be doing just that tomorrow, Oct. 16, to comply with the extended filing deadline. Unfortunately, however, too many people find ways to avoid paying the U.S. Treasury what they legitimately owe. They are why the latest update on the Tax Gap shows it has grown. A lot. The Tax Gap is the amount of money the IRS is owed, but which it hasn't been able to collect. The agency's latest estimates... Read more →
Update, Friday, Oct. 13, 2023: Former IRS contractor Charles Littlejohn pleaded guilty on Oct. 12 in federal court to disclosing tax return information without authorization. As noted in the post below, the compromised tax data was that filed by former president Donald J. Trump, and billionaires Jeff Bezos, Elon Musk, and Warren Buffett, among others. The tax material was given to two separate media organizations, which published stories based on the information. Littlejohn's sentencing hearing is scheduled for Jan. 29, 2024. He faces a maximum penalty of five years in prison. The eighth article of the Internal Revenue Service’s Taxpayer... Read more →
This summer, the Internal Revenue Service warned us of a surge of tax scams. Identity thieves were sending a barrage of email and text messages promising tax refunds or offers to help fix tax problems. Apparently, the scammers are continuing into the fall. Fake IRS text: I got the fake IRS text at left this week. This crook apparently was trying to convince me to click on the StatementClaim.pdf document. I was curious, but not that curious. However, I did like how the crook tried to pique my interest by annotating the fake text as an internal tax agency message.... Read more →
The sentencing of the two Fort Myers businessmen this week comes as the Internal Revenue Service ramps up its compliance efforts on flow-through entities. Photo by Raze Solar on Unsplash Reliable contractors are worth a fortune in Florida. The Sunshine State has its share of overcast and worse days, as made disastrously clear by major Hurricanes Ian in 2022 and Idalia this fall. That's why it's so discouraging when home repair experts break bad. Like a pair of roofing contractors who cheated the Internal Revenue Service out of more than $1 million. And more companies like theirs, a pass-through entity,... Read more →
The scheme involved false W-9 information, which meant the payor wasn't able to provide the owner of the artificial turf company, or the Internal Revenue Service, with the proper third-party report, allowing the man to evade nearly a million in federal tax. Until tax investigators caught up to him. Artificial grass has been dividing sports fans and players since its installation in Houston's iconic Astrodome in 1966. But fake grass is gaining ground among residential and smaller commercial customers. The market is forecast to reach $7 billion by 2025, as we deal with hotter temperatures, drought, and water sources literally... Read more →
IRS Commissioner Daniel Werfel, pictured at a Senate Finance Committee hearing in February, today announced the agency's new, expansive plans to enforce federal tax laws in a more equitable way. Artificial intelligence (AI) has been part of the Internal Revenue Service's arsenal for a while. Now, thanks to more money from the Inflation Reduction Act, the tax agency is going to use more AI to expand its examinations of high-dollar earners. That includes not only individuals, but also partnerships and corporations. This shift of compliance efforts will shift the IRS' focus from working-class to wealthy taxpayers, noted IRS Commissioner Danny... Read more →
Remember when these types of signs were popping up across the country? Also prevalent were fraudulent efforts to get COVID-19 relief money. Federal investigations are starting to show results, with guilty pleas and convictions of those who illegally got the funds. (Photo by Anastasiia Chepinska on Unsplash) When I was a newspaper reporter back in Lubbock, Texas, my beats were police and courts, so I know firsthand that criminals are part of the Hub City's population. Still, I was disappointed to learn this week that a Lubbock man defrauded COVID pandemic financial programs out nearly $4 million. But I was... Read more →
Deputy U.S. Attorney General Lisa O. Monaco, right at top of table, and at left Michael Galdo, Acting Director of the COVID Fraud Enforcement Task Force, lead a roundtable meeting of senior Justice Department officials and investigative partners in conjunction with the announcement of the results of a coordinated, nationwide enforcement action to combat COVID-19 fraud. The COVID-19 public health emergency may have ended, but the Justice Department's work to identify and prosecute those who stole pandemic relief funds is far from over. That was the message from U.S. Attorney General Merrick Garland this week, as the Department of Justice... Read more →
What a fun Monday. The hubby and I spent much of the morning setting up free credit monitoring accounts related to recent healthcare data breaches. Then we each ordered a free credit report to see if miscreants had been pretending to be either of us. I suspect we are not alone in taking identity theft precautions. The HIPAA Journal reports there was a 261 percent month-over-month increase in breached healthcare records in July. More than 18 million records were exposed in 56 reported incidents. The incredibly high total was due to a major data breach at HCA Healthcare that saw... Read more →
Ristorante Piccolo in the Georgetown section of the nation's capital offers al fresco dining, when it's open. Currently the business is closed, but not because of its owners tax- and COVID-related guilty pleas this week. It sustained fire damage back in June. (Photo from Piccolo's Facebook page) The restaurant sector was particularly hard hit during the height of the COVID-19 pandemic. Many were able to survive in part thanks to federal emergency relief programs. But some eateries took criminal advantage of Uncle Sam's help. And one such couple this week pleaded guilty to using $738,000 in coronavirus assistance money for... Read more →
Unsplash+ in collaboration with Getty Images One construction workers' union calls it the industry's "dirty little secret." Tax officials call it a crime. Both are talking about payroll tax evasion. Today, the Financial Crimes Enforcement Network (FinCEN), in coordination with IRS Criminal Investigation (IRS-CI), jointly issued a formal notice to financial institutions alerting them to increases in state and federal payroll tax evasion and workers' compensation insurance fraud in the both residential and commercial construction industries. Every year, state and federal tax authorities lose hundreds of millions of dollars to these schemes, which are perpetrated by illicit actors primarily through... Read more →
IVIX says its artificial intelligence (AI) software, which was designed with input from tax authorities, helps illuminate shadow economies. It does that, according to the company, by collecting publicly available business activity data and turning that information into credible leads for tax authorities to follow. IVIX, an Israeli venture with offices in New York, was founded in 2020, and touts itself as "the first AI-powered platform designed to address tax evasion in the shadow economy." Several former top Internal Revenue Service officials were and are among its advisors. Don Fort, former IRS Criminal Investigation (CI) chief, currently is IVIX's chief... Read more →