Tag Archives: IRS

Owner of Professional Employer Organization Pleads Guilty to Employment Tax Charge

On Jan. 6, 2017, Janis Edwards, the owner of a professional employer organization, pleaded guilty to tax evasion arising from failing to pay over to the IRS between $3.5 million and $25 million in withholdings that her organization had collected from the paychecks of her clients’ employees. Professional employer organizations, often called “PEOs,” have presented … Continue Reading

Digital Currency Exchange Customers Targeted in IRS Information-Gathering Sweep

Coinbase, one of the largest digital currency exchange companies in the world, will likely be asked to provide the Internal Revenue Service (IRS) with transactional data and other information on all U.S. customers who used its services over a three-year period. Using what is known as a “John Doe” summons, the IRS has formally requested … Continue Reading

Heat Rises on Indicted Former Tax Court Judge Diane Kroupa as Husband-Codefendant Pleads Guilty

On September 23, 2016, Robert Fackler, the husband and now co-defendant of former Tax Court Judge Diane Kroupa, pleaded guilty to corruptly impeding the IRS, a felony that carries a maximum three-year prison sentence. It is unclear whether the plea agreement calls for Fackler to cooperate with the government’s prosecution of his wife. Considering that … Continue Reading

Asset Forfeiture Reform Bill Moving Through Congress

The “Restraining Excessive Seizure of Property through the Exploitation of Civil Asset Forfeiture Tools Act” (tortuously abbreviated as the RESPECT Act) (H.R. 5523) continues to make its way through Congress, with a markup  session held on July 7, 2016. The bill follows an IRS change of policy in October 2014 to correct perceived abuses in … Continue Reading

IRS and DOJ Use a New Method to Defeat Taxpayers’ Fifth Amendment Argument Against Turning Over Foreign Account Records

At virtually every turn, courts have ruled against taxpayers who have asserted their Fifth Amendment privilege against self-incrimination to avoid turning over foreign account records to the government, citing the “Required Records Doctrine.” In a recent enforcement action in the U.S. District Court for the District of Oregon, the taxpayers tacked differently. In Cheri LaRue … Continue Reading

Congress Passes Law Revoking Passports of Those with “Seriously Delinquent Tax Debt”

On December 3, 2015, Congress passed a bill requiring the IRS to notify the State Department of any taxpayer with “seriously delinquent tax debt” and requiring the State Department to revoke that taxpayer’s passport until the debt is resolved.  President Obama signed the bill into law on December 4.  The new law defines seriously delinquent … Continue Reading

IRS Publishes Proposed Regulations for Hedge Fund Reinsurance Arrangements

In April 24’s Federal Register, the IRS released proposed regulations (REG-108214-15) to restrict when a foreign insurance company’s income can be excluded as passive income by giving a more strict definition for the “active conduct of an insurance business” exemption under IRC section 1297(b)(2)(B). The U.S. Treasury and Internal Revenue Service (IRS) state that the … Continue Reading

Hong Kong Signs FATCA IGA

On November 13, 2014, Hong Kong announced that it had signed a Model 2 FATCA IGA.  Under the agreement Hong Kong financial institutions will enter into separate FFI agreements with the IRS and will report information on U.S. account holders directly to the IRS.  Hong Kong indicated its intention to sign a Model 2 IGA … Continue Reading

Brazil Signs Reciprocal Model 1 FATCA IGA

On September 23, 2014, Brazil signed a FATCA IGA. The agreement is a Model 1 agreement, meaning that Brazilian financial institutions will report information about U.S. customers’ accounts to the Secretariat of the Federal Revenue of Brazil, which will then send that information to the IRS.  The agreement is reciprocal, meaning that the IRS will … Continue Reading

Former Head of DOJ Tax Division Warns Taxpayers to Think Twice Before Choosing New Streamlined Procedures

Former DOJ Tax Division AAG Kathy Keneally warned on June 24, 2014, that taxpayers should think carefully before signing a certification of non-willfulness and entering the IRS’s new Streamlined Filing Compliance Procedures.  The certification is under penalties of perjury.  Importantly, the streamlined procedures provide no protection from criminal prosecution if the IRS decides that a … Continue Reading

IRS Announces Major Changes to OVDP

On June 18, 2014, the IRS announced major changes to the OVDP, including a major expansion of the so-called Streamlined Program and an increased penalties for taxpayers who held accounts at banks that are under criminal investigation.  Taxpayers who are willing to certify that their past non-compliance was not willful can avoid the offshore penalty … Continue Reading

IRS Fighting Hard to Avoid Tea Party Class Action Claims

The IRS recently filed a motion to dismiss class action claims brought by Tea Party groups.  In NorCal Tea Party Patriots, et. al. v. IRS, et. al., S.D. Ohio, Case No. 1:13-cv-00341, Tea Party groups asserted that the IRS singled out their organizations when those organizations sought exemption from taxation pursuant to Section 501(c)(4) of … Continue Reading

Beanie Babies Creator Seeks Probation for $107 Million UBS Account

The Chicago Tribune reports that Beanie Babies creator Ty Warner, who pleaded guilty last year to one of the largest tax frauds in Chicago-area history, has asked the federal court to sentence him to probation. His sentencing is scheduled for January 14, 2014.  In 1996, Warner opened a Swiss bank account at UBS, which held … Continue Reading

Cayman Islands and U.S. Sign FATCA IGA

On November 29, 2013, the Cayman Islands and the U.S. Signed a FATCA IGA.  The Cayman Islands IGA is a Model 1B agreement, meaning that FFIs in the Cayman Islands will be required to report tax information about U.S. account holders directly to the Cayman Islands Tax Information Authority.  The Cayman Islands Tax Information Authority … Continue Reading

Voluntary Disclosures Lead to John Doe Summonses for Information about U.S. Accounts at Zurcher Kantonalbank and Bank of Butterfield

In a sign that the U.S. government continues to aggressively seek information on U.S. taxpayers with non-U.S. bank accounts, the government announced on November 12, 2013, that it had obtained a court order authorizing the government to issue so-called “John Doe summonses” for information on U.S. account holders at Zurcher Kantonalbank in Switzerland and Bank … Continue Reading

IRS Official Announces Crackdown on U.S. Taxpayers with Unreported Indian Accounts

Tax Analysts Tax Notes reports that the IRS Small Business/Self-Employed Division’s special enforcement program (SEP) will soon begin examining U.S. taxpayers suspected of holding undeclared accounts in Indian banks.  An IRS official announced on November 9, 2013, that the SEP team is preparing for the next phase of the IRS’s offshore compliance crackdown.  After receiving … Continue Reading

Federal Court Shuts Down Instant Tax Service

Tax Analysts Tax Notes reports that on November 6, 2013, Judge Timothy S. Black of the Southern District of Ohio permanently shut down Instant Tax Service, which claims to be the fourth largest tax return preparation firm in the nation.  The order said that Instant Tax Service cheated largely low-income customers by marketing fraudulent loan … Continue Reading

IRS Announces New Mandatory IDR Procedures

Tax Analysts Tax Notes reports that the IRS Large Business and International Division (LBI) released mandatory, stringent new procedures for enforcing information document requests (IDRs) and issuing summonses, minimizing examiners’ discretion even at the manager level. Under the new process effective January 2, if information requested in an IDR isn’t received by the IDR response … Continue Reading

Nevada Businessman Sentenced to Nine Years in Prison

Multiple outlets are reporting that on October 15, 2013, William Reed, a Nevada businessman, was sentenced to nine years in federal prison after pleading guilty to conspiracy to defraud the United States, tax evasion, and aggravated identity theft.  Reed was listed as the corporate officer for more than 1,000 companies purportedly headquartered in a lone … Continue Reading
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