Tag: irs

Gun-Toting Wing of IRS Wants to ‘Put the Fear of God in People’: Ex-Agent

As the Internal Revenue Service seeks to bolster the ranks of its weapon-carrying Criminal Investigation unit, a former special agent described the inner workings of the division and said its key function is “to put the fear of God in people” and intimidate Americans into tax compliance.

Former IRS Special Agent Robert Nordlander told Accounting Today, in a wide-ranging interview published on Feb. 20, that while most Americans have a sense of what IRS tax audits look like, the work of the IRS Criminal Investigation (IRS-CI) unit is shrouded in some mystery.

Dubbed “gun-toters,” the armed special agents in the unit are responsible for enforcing those parts of tax code whose violations amount to crimes, he said. “When crimes are committed, the IRS-CI are the ones that actually enforce” the law, Nordlander said.

The IRS-CI examines potential criminal activity related to tax crimes and makes recommendations for prosecution to the tax division of the Department of Justice (DOJ).

There are now around 2,100 “gun-toters” in the criminal investigations division, and the IRS—flush with funds from a new cash injection—is looking to hire more special agents.

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IRS Targeting Fantasy Sports (and much more) with New Tax Code Change: “Most Americans are about to get run over, and they have no idea.”

The IRS continues to be in the news cycle due to a continuous back and forth about how much power it will continue to have, and whether or not it will be weaponized even further against the average American. Even with the current delay of the onerous attempt to hit gig workers with a $600 threshold for reporting, they forge ahead, empowered by an $80 billion investment under the Inflation Reduction Act and some new code changes.

First it was reported that a new IRS alert went out to explain that there would be a new question to answer regarding “digital assets” and how to stay in compliance. Failure to answer accurately could spark and audit and attendant consequences.

“All taxpayers must answer the question regardless of whether they engaged in any transactions involving digital assets,” the agency cautioned.

It is a legal requirement to accurately report all income, including income from digital assets, on federal income tax returns. Failure to do so could result in non-compliance with tax laws and possible penalties. – Source:  The Epoch Times

Now there is a new target for tax oversight: your friendly fantasy sports league. Clearly not intending to wage war against billionaire tax cheats as advertised, this latest code change is set to “cause a sizable increase in audits and taxes on Americans, especially those using transaction services like Venmo and PayPal for fantasy sports, according to tax experts,” reports Fox News.

One tax expert, Bruce Willey, even likened it to being put in the path of an oncoming truck.

“Most Americans are about to get run over, and they have no idea. If they’re not prepared for it, things could get pretty ugly for people,” he said.

The same previously mentioned mechanism for gig workers is finding its way into fantasy sports for those who use online apps as their payment systems. Additional scenarios and specifics were described by BakerHostetler Nationwide Tax Chair Jeff Paravano. As one should quickly see, it’s vague, extremely burdensome on all parties involved, and will likely do nothing except drive up the numbers of audits and extortion that will result.

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In 2022, The IRS Went After The Very Poorest Taxpayers

On Wednesday, Syracuse University’s Transactional Records Access Clearinghouse (TRAC) released data provided to it by the Internal Revenue Service (IRS) on audits performed by the agency in fiscal year 2022. Despite the infusion of new funding earmarked for the IRS via last year’s Inflation Reduction Act, the agency continued historic trends of hassling primarily low-income taxpayers, with relatively few millionaires and billionaires getting caught up in the audit sweep.

“The taxpayer class with unbelievably high audit rates—five and a half times virtually everyone else—were low-income wage-earners taking the earned income tax credit,” reported TRAC, noting that the poorest taxpayers are “easy marks in an era when IRS increasingly relies upon correspondence audits yet doesn’t have the resources to assist taxpayers or answer their questions.”

In fact, “if one ignores the fiction of auditing a millionaire through simply sending a letter through the mail, the odds that millionaires received a regular audit by a revenue agent (1.1%) was actually less than the audit rate of the targeted lowest income wage-earners whose audit rate was 1.27 percent!”

The Inflation Reduction Act, passed in August 2022, directed $80 billion worth of new funding over the next decade to the IRS so it could hire 87,000 new workers, purportedly to better target millionaire and billionaire scofflaws. The Biden administration and credulous journalists claimed that this would in no way increase audits for those making under $400,000 annually—suspect assurances not provided within the text of the actual bill. This increased capacity meant only those at the top would be targeted, supporters insisted. But this ignores how the IRS’s incentives work and how agencywide reform might be too heavy of a lift.

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IRS Warning Americans to Report $600 Transactions From Payment Processors or Risk Facing Audit

The Internal Revenue Service reminds taxpayers to report transactions of at least $600 made through payment networks like Venmo, Paypal, and Cash App as the agency seeks to obtain data regarding part-time employment and side gigs, a move that critics have termed government overreach.

In a recent explainer posted online, the IRS said that according to the American Rescue Plan Act of 2021, any payment made after March 11, 2021, that exceeds $600 must be reported. The target of the new reporting rule is small business owners, and people working side hustles or part-time gigs for extra income. Earlier the reporting threshold was $20,000 and more than 200 transactions within a calendar year. But, the amended rule applies to a single transaction.

“You should receive Form 1099-K by January 31 if, in the prior calendar year, you received payments from all payment card transactions (e.g., debit, credit, or stored-value cards), and in settlement of third-party payment network transactions above the minimum reporting thresholds,” said the agency.

The reporting guidelines do not apply to noncommercial payments such rent, vacation, food, or one-time transactions like selling something online. The Form 1099-K will be sent by the payment platforms through which the transaction was done.

If a form is received by mistake, “contact the Payment Settlement Entity (PSE) listed on the Form 1099-K” or provide an explanation in the tax return, according to the agency.

Failure to report transactions on Form 1099-K could trigger an audit by the IRS since the agency receives a copy of the form.

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Current, Former IRS Employees Took Thousands In Fraudulent COVID Relief, Spent It On Gucci, A Mercedes, And Trips To Vegas

Five current or former employees of the IRS have been charged with scheming to defraud hundreds of thousands of dollars in COVID relief.

The Department of Justice announced in a press release Tuesday that the five individuals had each been charged with separate counts of wire fraud after they defrauded the federal Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL) program, which provided economic relief to small business owners and individuals affected by the COVID pandemic. The fraudulent loans ranged from as little as $11,000 to more than $170,000.

“These individuals – acting out of pure greed – abused their positions by taking government funds meant for citizens and businesses who desperately needed it,” U.S. Attorney for the Western District of Tennessee, Kevin G. Ritz, said in a statement. “I thank our law enforcement partners for rooting out this fraud. Our office will not hesitate to pursue and charge individuals who steal from our nation’s taxpayers.”

The first suspect was employed by the IRS as a Program Evaluation and Risk Analyst in the Human Capital Office. According to the criminal indictment, the suspect filed four fraudulent EIDL applications, seeking more than $500,000 in funds; he received a total of $171,400 in funds. The suspect allegedly spent the relief money on a Mercedes-Benz and placed the rest of his funds into a personal investment account. He is charged with two counts of wire fraud and an additional two counts of money laundering.

The second suspect worked for the IRS as a contact representative in the Wage and Investment Service Centers Department. According to the indictment, she allegedly sought at least $32,500 in loans from multiple PPP and EIDL applications; she received $11,500 in funds. She spent the funds on manicures, massages, and luxury clothing. She also obtained more than $16,050 in fraudulent unemployment insurance benefits from the Tennessee Department of Labor. She is charged with three counts of wire fraud.

The third suspect worked as a Management and Program Assistant in Information Technology. According to the DOJ, she allegedly submitted EIDL applications for a fashion business, seeking more than $300,000 in loans and obtaining $28,900. She allegedly spent the loan funds on Gucci apparel and a vacation in Las Vegas. She plead guilty to one count of wire fraud Tuesday.

The fourth suspect worked as a Contact Representative in the Wage and Investment Service Centers Department. He allegedly applied for four PPP and EIDL loans, seeking more than $113,000; he received $66,666 in funds. He allegedly spent the money on a Gucci satchel and other personal items. He plead guilty to a single count of wire fraud in August.

The fifth suspect worked as a Lead Management and Program Assistant in the Human Capital Office. She allegedly applied for four PPP and EIDL loans, seeking more than $133,000 in loans; she received more than $123,000. She then allegedly spent the funds on jewelry and trips to Las Vegas. She also plead guilty to one count of wire fraud in July.

Each wire fraud count carries a maximum penalty of 20 years in prison. The first suspect could also face up to 10 years in prison for each money laundering charge.

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IRS unmasked: Away from politics, America’s tax agency has lots of warts, and ammunition

The Internal Revenue Service has long been a political football. Democrats alleged that in the 1960s it was used by Lyndon B. Johnson and Richard Nixon to subvert civil rights and anti-Vietnam War activists, while Republicans alleged a decade ago it wrongly targeted Tea Party and other conservative groups.

More recently, Democrats have argued the tax agency needs $80 billion in new enforcement to end tax cheating and ease budget deficits, while Republicans say the new spending signed by President Joe Biden will only create an army of 87,000 armed agents intent on wreaking havoc on the middle and working classes.

With so much emotion, scandal and political rhetoric, it’s sometimes hard for everyday Americans to sort fact from fiction. So the team here at Just the News did a deep dive to put together a list of facts about the IRS that aren’t in dispute, from whom it audits to why it buys ammunition and arms its agents.

IRS Publishes Confidential Information of 120,000 Taxpayers Online, Then Blames ‘Human Coding Error’

On Friday, officials from Treasury Department announced that the Internal Revenue Service (IRS) had accidentally published confidential information pertaining to approximately 120,000 taxpayers’ retirement accounts on its website.

“This letter provides notice that the Internal Revenue Service recently identified an inadvertent and now-corrected disclosure of a subset of Forms 990-T,” Acting Secretary Anna Canfield Roth wrote in a letter addressed to Homeland Security Chairman Thompson.

“Federal Information Security Modernization Act (FISMA) requires this report to Congress “not later than seven days after the date on which there is reasonable basis to conclude that a major incident has occurred.” The IRS determined on Friday, August 26, that the inadvertent disclosure met this threshold,” the letter stated.

“Form 990-T is the business tax return used by tax-exempt entities, including tax-exempt organizations, government entities and retirement accounts, to report and pay income tax on income that is generated from certain investments or income unrelated to their exempt purpose,” the letter explained.

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82-Year-Old Grandma Hand-Filed Taxes for Years – 1 Small Mistake Has the IRS Demanding $2.1M

The Internal Revenue Service is going after an 82-year-old woman for an outrageous $2.1 million in “penalties” because she didn’t use the right form to file her taxes.

The grandmother from the Boston area had spent decades going to her local library and diligently filling out her IRS forms by hand and sending them in. But eventually she made a serious error, though it was one she had no way of knowing that she was making, according to Reason Magazine.

After Monica Toth’s family left Germany in the 1930s to escape Hitler’s fascist empire, they landed in Argentina, where Monica was born in 1940. By age 22, she had moved to the U.S. to start a family. Ultimately, in the 80s she became a naturalized American citizen.

In 1999, Toth’s father left her $4.2 million in a Swiss Bank account. Not being a tax accountant or tax preparer, Monica was not aware of the arcane rule that Americans who own bank accounts in foreign countries must file an annual one-page form known as the Foreign Bank and Financial Accounts report (FBAR). This form basically alerts the federal government to the existence of the bank account and lists the assets therein, the New York Post reported.

Toth had no clue that this form even existed and so, she spent years neglecting to file the form.

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