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 →
Tax crimes
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 →
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 →
Photo by Nick Night on Unsplash All taxpayers are supposed to be guaranteed privacy when it comes to their tax information filed with the Internal Revenue Service. Unfortunately, the IRS’ system is not immune to security breaches. Most of the time, it’s regular taxpayers like you and me whose personal data is of interest to crooks who want it to file fraudulent tax returns. But from 2018 to 2020, an IRS contractor stole years of tax returns and filing information related to thousands of the United States' wealthiest people. The contractor, Charles Littlejohn, then disclosed that tax info to the... Read more →
A good working relationship can make a boss and employee a great team. But sometimes, greed gets the better of one of them. (Photo by SEO Galaxy on Unsplash) One of my previous jobs was assistant to an executive in a multinational corporation. Among my duties was helping my boss draft our department’s annual budget. I also was her surrogate in reviewing and processing expenses for our area’s employees, as well as making payments for other expenditures. My boss and I worked closely on these and other projects, and over the years we also became good friends. We shared years... 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 →
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 →
Scenic Georgetown is one of the most popular neighborhoods in Washington, D.C. It’s where the D.C. Office of the Attorney General (OAG) alleged a bitcoin billionaire lived for years, but did not pay District income taxes. (Photo courtesy GeorgetownDC.com) Where you live affects your taxes, says the woman who’s spent most of her life in two states, Texas and Florida, without a personal income tax. For a while, though, I did live in two tax collecting jurisdictions, Washington, D.C., and Maryland. Fortunately for the hubby and me, when we resided in the national capital, we weren’t on the District of... Read more →
No, not that guy. However, this month's federal tax trial in a North Texas courtroom does have a connection to Donald J. Trump and some interesting similarities to his falsification of business records trial just concluded in New York City state court. In the Texas trial, John Anthony Castro, who briefly sought nomination as the GOP’s 2024 presidential candidate and pestered the Party's presumptive nominee with lawsuits, was convicted on May 24 on 33 counts of federal tax fraud. Federal prosecutors said Castro’s scheme resulted in more than $15.5 million in tax losses to Uncle Sam. Global marketer of tax... 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 →
Shortly after MLB superstar Shohei Ohtani joined the Los Angeles Dodgers, a federal sports gambling scandal involving his now-former translator Ippei Mizuhara broke. This week, Mizuhara (below left), agreed to a plea deal. (Mizuhara photo by Moto "Club4AG" Miwa from USA - Angels vs Mariners 2019-6-8 Anaheim Stadium, CC BY 2.0. Ohtani photo by All-Pro Reels from District of Columbia, USA - Dodgers at Nationals, CC BY-SA 2.0.) Sports and courts too often coincide outside the usual tennis venues. Leagues are sued by competitors. Broadcasting rights battles are litigated. Players’ union grievances are heard by various judges. Individual players sometimes... Read more →
Almost a year ago, the man dubbed Bitcoin Jesus because he made a fortune as an early advocate of the digital currency, was indicted on mail fraud, tax evasion, and filing false tax return charges. We found out about the $48 million tax evasion and other charges this week when the Department of Justice (DoJ) unsealed the June 2023 indictment naming Roger Keith Ver. He was arrested in Spain based on the criminal charges, and U.S. law enforcement officials are seeking Ver’s extradition. The indictment, announced by DoJ on April 30, alleges that Ver formerly of Santa Clara, California, owned... 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 →
Yelena Blinovskaya and Alexei Blinovsky in happier times shared on her Instagram account. I'm confident that the hubby loves me. But does he love me enough to head off to war? I don't ever want to find out that answer for many reasons, including the "what the what?" follow-up questions it would raise. But that startling scenario just played out in Russia. And yes, it involves taxes. Influencer tax evasion charges: Yelena Blinovskaya, a self-help coach and Instagram influencer, was arrested at the Russian-Belarus border in April 2023 for allegedly trying to flee her native country to avoid paying a... 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 →
Today's post on the second half of the 2024 Internal Revenue Service's Dirty Dozen tax scams looks at a wide range of schemes and potential victims. Tax pros are targets, as are high income earners in schemes 7 through 12. Together with the Dirty Dozen's first six scams posted last week, there's a scam for almost all of us taxpayers. Take notice and don't become a Dirty Dozen victim. Last Friday, I shared the first six of the Internal Revenue Service's annual Dirty Dozen list. As promised, this post wraps up schemes, cons, and scams 7 through 12. This compilation... Read more →
Perennial tax schemes, some tweaked ones, and a few new scams, make the 2024 version of the IRS Dirty Dozen. And these featured today are just the first six of the 12 cons the IRS calls out in 2024. The final 7 through 12 on the annual infamy list will be posted next week is posted here. This week, as it does every week, the Department of Justice's Tax Division announced civil and criminal actions against several businesses and individuals accused of betraying taxpayer trust and cheating the Treasury Department out of tax dollars. Some of those who were part... 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 →