Washington DC Tax Law Blog

80 Individuals Indicted for Conspiracy to Steal and Launder Millions Via Online Fraud Schemes

On August 22, 2019, the United States Attorney's Office for the Central District of California reported the unsealing of a 252-count federal grand jury indictment charging 80 defendants, mostly Nigerian nationals, with conspiracy to steal and launder millions of dollars via multiple online fraud schemes. The report emphasizes that the "FBI is committed to working with our partner agencies worldwide," and that "[t]his indictment sends a message that we will identify perpetrators - no matter where they reside - and we will cut off the flow of ill-gotten gains."

Fail to meet estimated 2018 tax payment? IRS may waive fees.

The Tax Cuts and Jobs Act (TCJA) meant big tax changes for 2018 tax filings. For some, the changes impacted tax withholdings. As a result, the Internal Revenue Service (IRS) encouraged taxpayers to conduct a paycheck checkup to make sure they were withholding enough funds to cover their tax obligations. Those who failed to cover at least 90% of their tax bill through withholdings found themselves facing the potential for big financial penalties.

Reality Television Stars and Accountant Indicted on Tax Evasion Charges

On August 13, 2019, the U.S. Attorney's Office for the Northern District of Georgia issued a release reporting the federal grand jury indictment of reality television stars, Todd and Julie Chrisley. These Chrisley Knows Best stars face multiple counts of conspiracy, bank fraud, wire fraud, and tax evasion. Additionally, the Chrisleys' accountant, Peter Tarantino, has been charged with tax-related offenses.

Regarding the tax allegations, the indictment alleges that the Chrisleys failed to timely file income tax returns and timely pay the IRS for tax years 2013-2016. Additionally, it is alleged that the Chrisleys and Tarantino conspired to defraud the IRS. Specifically, all three individuals are charged with obstructing IRS collection efforts by hiding income and lying about their tax returns. Tarantino is further accused of lying to FBI and IRS-CI Special Agents.

3 tax questions to ask before claiming a hobby as a business

What happens if a hobby becomes more than a hobby? Maybe a brewing hobby has led to a passion and some great brews that you want to branch out and pursue brewing as a full-time career. Maybe a farming hobby brought in more of a profit than you expected and you want to shift more resources into making it your life’s work. Or perhaps you have chosen to increase a pastime spent woodworking into your profession.

Anyone that finds themselves making this transition has a number of questions. A wise entrepreneur will set up a business plan and look into business formation options for liability protection and tax savings. The thought of taxes may trigger another question — can you shift what the Internal Revenue Service (IRS) views as a hobby into a business for tax purposes?

Former Offshore Voluntary Disclosure Program Participants and Expats Targeted in IRS Compliance Campaigns

On July 19, 2019, the IRS Large Business and International Division (LB&I) announced six newly approved compliance campaigns. In the Announcement, the IRS clarified that it identified the campaigns "through LB&I data analysis and suggestions from IRS employees." One of these campaigns, Post OVDP Compliance, targets taxpayers who previously went through the Offshore Voluntary Disclosure Program (OVDP). While another campaign, Expatriation, is aimed at U.S. citizens and long-term residents who expatriated on or after June 17, 2008.1

IRS takes aggressive stance on cryptocurrency reporting

Cryptocurrency, or digital currency, is a fairly new way to conduct financial transactions. Although relatively novel, taxpayers have used digital currency like Bitcoins to purchase real estate and other tangible items, and the Internal Revenue Service (IRS) has taken notice.

In response to the growing rate of these transactions, the IRS recently announced it is sending out letters to those who hold digital currency with reporting information.

IRS Targets Taxpayers Suspected of Virtual Currency Non-Compliance

On July 26, 2019, the IRS released IR-2019-132, stating that it has started sending out warning letters to taxpayers suspected of incorrectly reporting virtual currency transactions. The IRS noted that by the end of August, more than 10,000 taxpayers will receive these letters.

The IRS clarified that these are "educational letters" which come in three variations: Letter 6173, Letter 6174, and Letter 6174-A. All three versions are supposed to assist taxpayers in getting compliant and correcting errors.

Judge sentences family to jail after inheriting hidden account

Going through an inheritance after a loved one dies is a difficult and emotional time. In addition to the emotional turmoil, those who are left behind must also deal with the logistics that come with the estate.

In some cases, these logistics can come with unexpected legal questions.

Does the IRS tax lawsuit awards?

Whenever a relatively large financial transaction occurs, it is very likely that the Internal Revenue Service (IRS) will be involved. Getting divorced? The IRS will look over the property division determination and check for errors. If so, the agency may apply applicable taxes. Win the lottery? The IRS will expect a share of the winnings? Going through a lawsuit? Yes, even during your legal woes the IRS may determine that you owe a tax bill.

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