More than 22 million U.S. workers lost their jobs during the early stages of the COVID-19 pandemic. Crooks took advantage of their misfortune to file fraudulent unemployment insurance claims. COVID-19 has to be one of the most persistent illnesses ever, from both medical and financial perspectives. While federal health agencies debate COVID vaccine recommendations and warnings, Uncle Sam’s law enforcement officers, including those with the Internal Revenue Service’s Criminal Investigation unit, continue their efforts to prosecute those who abused coronavirus relief programs. On June 24, officials notched another win when David Godin was sentenced by a federal judge in Baltimore... Read more →
Tax crimes
Justice Department façade photo by JSquish/Wikimedia Commons It’s not a particularly good time to be a federal employee looking to ensure tax compliance. Already this year, the Internal Revenue Service has lost almost a third of its tax auditors thanks to Department of Government Efficiency, or DOGE, cuts. Now the Department of Justice’s (DoJ) special tax crimes unit is being eliminated. The DoJ personnel moves, however, aren’t as drastic as the IRS staff reductions. The jobs won’t be lost, just reallocated to other areas in the Justice Department. Tax division absorbed into other units: The end of the DoJ’s Tax... Read more →
Facebook Real estate can be a good way to increase your personal wealth. However, some property investments aren’t as good as advertised. That was the very costly lesson learned by individuals persuaded by a popular social media financial influencer to let him use their money in what they were told was a property flipping venture that would net them returns of 30 percent or more. Instead, federal investigators and prosecutors alleged it was all a real estate Ponzi scheme concocted by Tyler Bossetti. As the scheme unraveled, investors ended up defrauded out of more than $11 million. Today, it formally... Read more →
It’s not clear what these two pigs are looking at, but cyber criminals are looking for crypto scam victims for their so-called pig butchering schemes. One company U.S. officials say facilitated such schemes has been sanctioned by the U.S. Treasury’s Office of Foreign Assets Control. (Image by Herbert from Pixabay) And the U.S. Treasury sanctioned this no-so-little pig butcher all the way home. My liberty with the old nursery rhyme was prompted by the Treasury Department’s announcement on May 29 that its Office of Foreign Assets Control (OFAC) has sanctioned a Philippines-based company that provides computer infrastructure for hundreds of... Read more →
This long holiday weekend offers us Americans an opportunity to officially, and in as unified a way as we can nowadays, remember and honor those who fought and died for the freedoms we hold sacred. That somber acknowledgment also is why I’m a bit ticked off today. Last week, a man who was part of the private sectors that’s supposed to support our troops pleaded guilty to tax crimes. And he used the military defense firm to which he formerly belonged to commit the felonies. Douglas Edelman founded and owned half of Mina Corp. and Red Star Enterprises (Mina/Red Star),... Read more →
Much attention on federal agencies this year has been on ways to prevent fraud and save Uncle Sam money, with mixed results. But such efforts have always have been a focus of the Internal Revenue Service Criminal Investigation (IRS-CI). This week, IRS-CI and the Department of Justice (DoJ) announced the judicial payoff from one case that cost the U.S. Treasury more than $3 million. Fake claims on false tax returns: Diandre Mentor of Miami pleaded guilty before a Florida magistrate to conspiring to defraud the United States by filing false tax returns for clients. According to court documents and statements... Read more →
Spoiler: Tax cheating is not going away, and likely will increase thanks to recent Trump administration/DOGE actions. Roman portraiture fresco of a young man with a papyrus scroll, from Herculaneum, 1st century AD (Image by Olivierw/own work, Public Domain/Wikimedia) Tax cheating is a big topic every filing season. This year it got added attention. Many in the tax world are worried that cuts to the Internal Revenue Service by the Department of Government Efficiency (DOGE), championed by the Trump administration, will hamper the agency’s ability to effectively enforce tax laws. But tax cheating is not new. It’s been around as... Read more →
This month, we hit the five-year mark since the COVID-19 global pandemic was declared. Here in the United States, the medical situation has stabilized or gotten better in most states. Internal Revenue Service law enforcement agents, however, are still dealing with the coronavirus’ tax aftermath. The Coronavirus Aid, Relief, and Economic Security (CARES) Act was designed to help Americans cope with the pandemic’s economic impact. Donald J. Trump signed the $2.2 trillion economic stimulus bill into law on March 27, 2020. The CARES Act was known primarily for the first round of cash payments sent to individuals and families during... Read more →
Some victims report losing more than $10,000 to more sophisticated tax cons. Photo by Nataliya Vaitkevich With Tax Day less than a month away, taxpayers are getting busy. So are the scammers who are hoping that they can intercept some of the money or personal data that filers meant to send to the Internal Revenue Service. Such deceptive activity isn’t anything new. What is different this tax season is that tax crooks are taking advantage of artificial intelligence (AI) to create even more convincing schemes. AI upping tax scammers' games: Sure, some tax crooks on a budget still send out... Read more →
It’s the main tax filing season, so that means it’s also tax scam season. The Internal Revenue Service has been keeping track of the year’s most prevalent schemes for more than two decades and alerting us in its annual list of the 12 scams it has found to be the most egregious over the last year. The Dirty Dozen for 2025 includes some repeat [dis]honorees. A few are new or have been tweaked. But they share one characteristic. They target taxpayers, businesses, and the tax professional community, and all too often end in the loss by victims of personal information,... Read more →
Agents with Internal Revenue Service Criminal Investigation (IRS-CI), the tax agency's law enforcement arm, regularly work with other officers to bring financial and tax criminals to justice. IRS-CI agents are responsible for conducting financial crime investigations, including tax fraud, narcotics trafficking, money-laundering, public corruption, healthcare fraud, identity theft, and more. While we wait to see how things shake out at the Internal Revenue Service under the second Donald J. Trump term, I thought it worth taking a look back at some recent tax agency activity. Notably, the IRS’ law enforcement arm, the IRS Criminal Investigation unit, has over the years... Read more →
A federal court this week granted the Internal Revenue Service a John Doe summons to get information on individuals who answered client questions via a digital platform. (Photo by Olha Ruskykh) Some individuals who worked for an online site providing answers as experts in various fields soon could be hearing from the Internal Revenue Service. On Monday, Dec. 23, a federal court in California authorized the IRS to serve a John Doe summons on JustAnswer LLC. The federal tax agency is seeking information about U.S. taxpayers who were paid for answering questions during the years 2017-2020 on the Covina, California-based... Read more →
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 →
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 →
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 store 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 →