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 →
Tax crimes
Gift cards make great presents for family and friends. The cards, however, cannot be used to pay taxes during the holiday season or any time. (Gift card wreath via Pinterest) Gift cards are a great last-minute gift or a present for that hard-to-shop-for person in your life. That’s why they are so popular, particularly during the holiday season. The plastic presents also are popular with crooks. They tamper with easily accessible gift cards in story displays, obtain card barcodes and other information, then put them back on the rack. When a card is purchased and activated, the criminals use it... 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 →
The modern wooden replica of the Trojan Horse, created in 1975 by the Turkish architect İzzet Senemoğlu, stands today at the ruins of Troy archaeological site in Turkey. (Photo: Turkish Archaeological News) Two Nigerian men, one living in North Dakota and the other in Mexico, have been charge with in connection with a scheme to allegedly steal client information from several Massachusetts tax preparation firms’ computer networks. Federal investigators allege that once the duo got the tax data, they filed fraudulent returns and had the associated false tax refunds deposited in bank accounts the pair controlled. In total, the scheme’s... 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 →
Sometimes, shelters don't work out as hoped. That's also the case with tax shelters set up to take, rather than save, your money. (Photo by Min An) Looking for a way to save tax dollars is not a crime. But setting up a bogus tax shelter is. That's what federal investigators accuse a Florida man of doing, along with a few other things, in a grand jury indictment. The document was unsealed by the U.S. Department of Justice on Sept. 26 in Gulfport, Mississippi. It charges the Sunshine State financial advisor, securities broker, and insurance salesman (whose name I’m not... Read more →
Photo by Francisco De Legarreta C. on Unsplash Owing a big tax bill is a terrible feeling. The only thing worse is not being able to come up with the money to pay Uncle Sam. The Internal Revenue Service offers some solutions. You can pay over time by setting up an installment plan with the tax agency. Sometimes, even spreading out payments isn’t enough. Dealing with a huge tax bill: If your tax debt is so large that you know you’ll never be able to pay it all, you can turn to an Offer in Compromise, or OIC. By submitting... Read more →
Treasury Secretary Janet L. Yellen speaking at the Austin, Texas, Internal Revenue Service campus Friday, Sept. 6. The Secretary's remarks included news of progress collecting unpaid taxes from rich nonfilers. (Screen capture from Treasury YouTube video) The U.S. Treasury’s balance has grown recently, thanks to Internal Revenue Service’s success in collecting from high-wealth individuals who neglected to file tax returns. Treasury Secretary Janet L. Yellen and IRS Commissioner Danny Werfel this morning announced that to date $1.3 billion has been recovered from wealthy nonfilers. The new collection effort, kicked off in 2023 and led by dozens of senior employees, focused... Read more →
Photo by Alesia Kozik The 2024 election features a lot of firsts. We’ve seen the first sitting president to withdraw from the race after securing enough delegates to win his party’s nomination. The first woman of color seeking the presidency. The first person convicted of (and facing more) felony charges running against her. It’s also the first presidential race in which crypto currency could play a major role. Blockchain companies have supplied 48 percent of the $248 million of corporate money donated to influence federal elections this cycle, according to research by the nonprofit watchdog group Public Citizen. To be... Read more →
Photo by Katt Yukawa on Unsplash Crowdfunding, a personal way of raising money that’s been supercharged by social media’s reach, has tax implications. Most of us are familiar with charitable crowdfunding. Expect to see a lot more of that in the wake of natural disasters, with solicitations by individuals and groups looking for help for themselves or others. In addition to charitable fundraising, there also are lots of online financial solicitations by and for businesses. Regardless of the crowdfunding reason, the Internal Revenue Service notes that distribution of the funds may be includible in the gross income of the person... Read more →
Yes, alligators, like this one enjoying an open water area of the everglades, are as much a cliché as Florida man escapades. But a gator seemed a good emblem for the IRS' persistence in going after a Florida man who evaded millions in taxes for around two decades. (Photo by Kay Bell) This Florida man story is much more serious that the Sunshine State memes you tend to see online. Aug. 13, Roger Whitman pleaded guilty to evading more than $2.4 million in taxes on income he earned from his business. The 76-year-old Ormond Beach, Florida, man’s business was manufacturing... Read more →
Both taxpayers and the Internal Revenue Service depend on tax professionals doing their jobs in, well, a professional manner. A crucial part of the job is ensuring the security of clients’ tax information. Security measures are particularly important as everyone — tax pros, taxpayers, and the IRS — increasingly rely on electronic methods to complete tax tasks. In fact, tax professionals are legally required to secure their clients’ data. The Financial Services Modernization Act of 1999, also known as the Gramm-Leach-Bliley Act after the names of its primary Congressional sponsors, mandates that financial institution companies ensure the security and confidentiality... Read more →
Update, Friday, Oct. 11, 2024 — Hurricane Milton's landfall Oct. 9 on the Florida' central Gulf Coast prompted the IRS to once again move previously announced disaster relief tax deadlines. Now all Sunshine State taxpayers have a May 1, 2025, deadline. Update, Wednesday, Oct. 2, 2024 — Deadly Hurricane Helene has changed deadlines for areas in four states — Florida, Georgia, North Carolina, and South Carolina — that earlier were in Hurricane Debby’s path. Instead of Debby’s Feb. 3, 2025, deadline, affected taxpayers in those states now have a later Helene-prompted deadline of May 1, 2025. Update, Wednesday, Sept. 18,... Read more →
Americans Evan Gershkovich (at center of back group, the back of his head visible) and Alsu Kurmasheva (hugging one family member and reaching for another), after arriving at Joint Base Andrews late Aug. 1. They were among those who were wrongfully imprisoned in Russia, and finally released following an historic prisoner swap. (White House photo via Facebook) I cannot image what goes through the mind of a person wrongfully imprisoned in a foreign country. I do know what they aren’t thinking about. Taxes. But when these United States citizens finally do get home, they must consider their tax situation. The... Read more →
Photo by Bermix Studio on Unsplash The New York Times, like many newspapers, runs a weekly quiz in which readers can test their knowledge of newsworthy events that happened the previous week. In the newspaper’s July 19 quiz, question number 4 (below) about U.S. Sen. Robert Menendez's recent federal trial conviction caught my eye. You’ll know why the minute you look at the multiple choice answers offered. The last multiple choice charge is the correct one. Menendez was not charged with nor convicted of tax evasion. He was convicted of participating in a vast international bribery scheme, steering aid and... Read more →
Photo by Alesia Kozik In the last 15 years, virtual currency has grown into a trillion-dollar industry. It’s exponential growth is reflected in the number of types of virtual currency. Since April 2020, the crypto options have jumped from 5,000 to more than 26,000 by July 2023. The Internal Revenue Service has faced digital currency tax compliance complications from the get-go. The challenges have increased as the sector and its advocates have grown. Evasive crypto transactions and how effectively the IRS deals with the taxpayers who employ them is the subject of a recent Treasury Inspector General for Tax Administration... Read more →
Sometimes the only way to catch wrongdoers and end abuse is by getting inside information. But whistleblowers often are fearful of coming forward, despite myriad laws designed to protect those who come forward. These protections were enacted for the most part in the Whistleblower Protection Act, enacted in 1989. While it focused on federal employees, the Occupations Safety and Health Administration (OSHA) created the Whistleblower Protection Program to enforce existing statutes that prevent employers from retaliating or discriminating against a whistleblower. Now some U.S. Senators are looking to update the 35-year-old law, specifically with regard to federal employee whistleblowers who... Read more →
I hope you’re having a great long July 4th holiday break. I’m catching up on some podcasts, and one is a good fit for this week's Tax Felon Friday feature. Guy Ficco, who took over as head of the IRS Criminal Investigation division in April, spoke with Bloomberg Tax reporter Erin Slowey in the latest edition of Talking Tax podcast. Ficco has spent his 29-year IRS career as part of CI, so he’s seen firsthand how the tax investigative component has changed over the years. Changing times: Some things have evolved for everyone in every job. Many can relate to... Read more →