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Articles Posted in Tax Fraud

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The IRS has just announced that Operation Hidden Treasure will seek to find taxpayers with unreported income from currency transactions.  Did you notice the new question on page 1 of the Tax Form 1040?  It states, “At any time during 2020 did you receive any financial interest in virtual currency?”  Last year this question was only on Schedule 1.

The IRS Criminal Investigation Division (“CID”) will look for typical “flags” in money transactions.  That may include “structuring” (transactions in increments of less than $10,000 to avoid reporting requirements), “the use of nominees, shell corps” (entities used solely for moving money around) or “getting on and off the chain.” (On chain transactions – blockchain is modified to reflect the transaction on a public ledger. Off chain transactions are those that that go off the blockchain.  They work by swapping private keys to an existing wallet instead of transferring funds.)

The IRS identifies and investigates these tax evasion flags.  Operation Hidden Treasure is “all about finding, tracing, and attributing crypto to U.S. Taxpayers.” Do not be fooled into thinking that since it’s cryptocurrency the government does not have the know how to investigate.   Charges for tax evasion, false information on a tax return or even money laundering or structuring can be forthcoming.  Call Conaway & Strickler, PC if you have had a friendly visit from an IRS CID Agent or if you think you might be facing some issues with the IRS.  Carolyn Schenck, national fraud counsel in the IRS Office of Chief Counsel states, “Operation Hidden Treasure is designed to find, trace and attribute such transactions to taxpayers. These transactions are not anonymous.  We see you.”

Tax Fraud: Being charged with a serious crime can be an emotionally challenging experience for many people. This is particularly true if a conviction can result in significant time behind bars. This seems to be what one woman is experiencing during her recent trial surrounding state tax fraud charges in Georgia.  (You can be charged at the state level or the federal level for these type of charges, although it is more commonly charged at the federal level)

According to reports by the media, the woman appeared visibly upset before the court proceedings began. The woman required removal from the courtroom and was later brought back in.  

A judge recently decided to push back the trial following the woman’s outburst in court. The trial will address multiple counts of tax fraud and other related crimes that the woman is now facing. The woman had allegedly been operating a tax preparation business when arrested for a tax fraud scheme in which she had allegedly filed thousands of fraudulent tax returns in order to obtain larger tax return payments for her customers.

Tax Fraud: Elected public officials are an integral part of democracy in the United States. Typically, these individuals are held to higher ethical and legal standards. However, even elected officials can make mistakes which can result in legal problems. This is what is happening with former Georgia State Rep. Tyrone Brooks Jr. who was charged with various white collar crimes.

Brooks was charged in federal court with filing false tax returns, tax fraud, wire fraud and mail fraud. He was indicted in May 2013. The representative had been accused of misappropriation of funds which were supposed to go to charity. Instead, the man allegedly used the funds to pay for family and personal expenses.

Reportedly, he had allegedly solicited over $1 million worth of contributions during the period between the mid-1990s and 2012. He told individual and corporate donors that the funds would be used to help combat illiteracy in under-served communities as well as various other causes. The allegations involved the defendant’s relationship with a tax-exempt charity which Brooks had founded in 1990. Also, the allegations involved his role as president of the Georgia Association of Black Elected Officials.

The United States tax system is designed for the benefit of all citizens and taxpayers. The funds collected from taxes help to pay for many social services and the infrastructure necessary to maintain society. There are a number of laws aimed at maintaining the integrity of the tax system, and violating tax laws can result in criminal charges. This is what one couple is facing after they were charged with tax fraud in  federal court inGeorgia.

The two defendants, a man and his wife, were accused of conspiring to commit wire fraud by filing fraudulent tax returns during the period beginning in Jan. 2011 and ending in Feb. 2013. The 44-year-old man and his wife were charged with one count of aggravated identity theft and one count of conspiracy to commit wire fraud. Federal prosecutors indicated that the couple filed more than 1,100 fraudulent tax returns electronically.

The couple allegedly obtained nearly $1.2 million in funds from fraudulent tax refunds. The authorities have determined that 114 calls were made to the Internal Revenue Service from the wife’s cell phone. Both of the defendants are now facing as many as 20 years behind bars and fines of as much as $250,000. Both defendants have decided to plead guilty to specified charges, likely in hopes of obtaining some leniency at sentencing.

There is a significant distinction between state and federal charges, but for many people in Georgia, there may be a significant amount of confusion between the two. Before a person accused of any crime can proceed, understanding the differences between these two types of charges can be crucial to a favorable outcome. Those dealing with federal charges such as insurance or tax fraud may have extra considerations to take into account.

If you’re accused of committing a federal crime, your case will be handled by the federal courts rather than the court local to your state. The idea of standing before a federal judge can be understandably overwhelming, but no matter what court you appear in, you still retain the same rights and protections. Most importantly, you are still presumed innocent throughout the entirety of court proceedings.

Tax fraud: Allegations that could potentially place your case in federal rather than state court can vary. For instance, committing a crime that would usually be handled by the state can immediately become a federal issue simply by occurring on federal property. Others face federal charges for supposedly committing certain crimes in multiple states.

White collar crimes can affect individuals both legally and personally if they are convicted of the charges. Some of the most common infractions for which Georgia prosecutors seek convictions are tax fraud and identity theft. Throughout the years, millions of people have become victims of fraudulent tax filings, which has led to the arrest of suspects involved in tax rings. However, just because someone has been formally charged does not necessarily mean that are automatically guilty.

According to reports, authorities arrested 13 individuals who are accused of being involved with tax fraud and identity theft. Prosecutors believe that two more suspects are involved with the alleged fraud organization, but they have not yet been arrested. Reports indicate that over 50 suspects allegedly stole identities of other individuals for the purpose of filing fraudulent tax returns. The suspects would then reportedly steal the refunds.

Please see this blog on FATCA

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