Monthly Archives: September 2022

Third-party payment networks, such as PayPal and Venmo, must report to the IRS any transactions for goods or services in excess of $600 starting this year. 

Beginning January 1, 2022, all third-party payment processors in the United States are required to report payments received for goods and services of more than $600 a year. 

This means if you’ve sold goods or conducted a business service and collected payment through Venmo, PayPal, Cash App, Square, Stripe, Etsy, or eBay, you will receive a 1099-K Payment Card and Third-Party Network Transactions Form, and that income will be reported to the Internal Revenue Service.

The change was made to capture income made by gig workers and entrepreneurs with a side hustle. In the past, companies were only required to send an IRS Form 1099-K for gross payments exceeding $20,000 and more than 200 transactions within a calendar year.

If you’re sending or receiving money through one of these apps, you need to be proactive in making sure you aren’t mistakenly sent a 1099-K.

The House’s Build Back Better Proposal would have separately required third-party payment networks to apply backup tax withholding to such payments. However, the Build Back Better Proposal did not pass in 2021. 

But the IRS is aware of this leakage or revenue from third-party payment networks, such as PayPal and Venmo and will continue enforcement efforts to ensure the taxpayers properly report income from these third-party payment networks.

Have an IRS Tax Problem?

 Contact the Tax Lawyers at
Marini & Associates, P.A. 

for a FREE Tax HELP Contact us at:
www.TaxAid.com or www.OVDPLaw.com
or Toll Free at 888 8TAXAID (888-882-9243) 

Read more at: Tax Times blog

On August we posted IRS Is Going After Tax Evaders, Not Honest Americans - Rettig Op-ed, where we discussed that IRS Commissioner Chuck Rettig published an op-ed on Yahoo Finance: IRS sets the record straight: We’re going after tax-evaders, not honest Americans.

One issue that politicians and others have not covered is what exactly IRS Criminal Investigation does and to that end, we refer you to the IRS CI’s 2021 Annual report, which explores CI’s unique role in tax administration and its relationship to law enforcement more generally.

The bulk of what CI does in terms of time and agent hours is work on general tax fraud investigations, as this shows:

According Procedurally Taxing, Building a fraud case is time intensive and can often involve high profile people and businesses. CI also assists on non tax investigations like its Illegal Source Financial Crimes Program. According to the CI Annual Report, in these cases, “special agents’ investigations focus on individuals who receive income from illegal sources, such as embezzlement, bribery, and fraud. They also focus on money-laundering schemes, where individuals launder their ill-gotten gains by making the money appear as if it came from legitimate source.”

There is lots more in the report, including solid numbers on investigations, prosecutions and employee numbers including that the IRS Criminal Investigation (CI) is comprised of nearly 3,500 employees worldwide, approximately 2,500 are Special Agents whose investigative jurisdiction includes tax, money laundering and Bank Secrecy Act laws. 

Not 87,000 New Special Agents, As Falsely Reported Concerning The Recently Passed Inflation Reduction Act 2022.

CI is a key part of our tax system, with its employees investigating and at times recommending prosecution of criminal tax violations and other related financial crimes to the Department of Justice. 

While most taxpayers will never interact with CI, it is an important part of a system that depends on the community at large respecting and complying with the law.

Have an IRS Tax Problem?

for a FREE Tax HELP Contact us at:
www.TaxAid.com or www.OVDPLaw.com
or Toll Free at 888 8TAXAID (888-882-9243)

Read more at: Tax Times blog

According to Law360, An Idaho widow faces $2.3 million in penalties and interest stemming from her husband's failure to report his foreign bank accounts to the Internal Revenue Service, the U.S. alleged in a complaint filed in federal court.

Patricia Leeds is the surviving spouse of Richard Leeds, who willfully neglected to report his two Swiss bank accounts from 2006 to 2012, the U.S. said in its its complaint, filed on August 30, 2022. She is named as a defendant in her capacity as a potential successor or personal representative to her deceased husband's estate, the U.S. said.

Richard Leeds opened one account with EFG Bank in 1980, the U.S. said in its complaint, and withdrew just over $157,000 from the account between 2006 and 2009. He initially denied to the IRS that he made the withdrawals, which is evidence that he knew he had an obligation to report them, the government said.

Richard Leeds closed the account and transferred the funds in 2009 to a second EFG account, which he had opened in 1997 and put under the name Asian Group for International Studies and Training, a foreign corporation he created in Turks and Caicos in 1997, the government said. Richard Leeds was the beneficial owner, the "director" and the "president/secretary" of the corporation, the U.S. said. He asked EFG to hold correspondence about the account at the bank, the U.S. said.

Cash withdrawals from the second account totaled almost $485,000 from 2006 to 2012, the U.S. alleged. As with the first account, Richard Leeds denied withdrawing the money, it said. He closed the account in 2012 and transferred the funds, $2.5 million, to a domestic account, the government said.

Richard Leeds did not disclose his accounts to an accountant hired for preparing his tax returns, the U.S. said. He admitted to a foreign source of income but did not take the accountant's advice to consult a tax attorney, it said.

The IRS started an examination and assessed penalties of $1.5 million against him in 2018. The amount has grown to $2.3 million as of Aug. 15, it said. Richard Leeds died in 2021, according to the complaint.

Have Un-Reported Foreign Income?

Want To Know Which
Voluntary Disclosure Program
Is Right For You?  

 Contact the Tax Lawyers at 

Marini& Associates, P.A. 

 

 

for a FREE Tax Consultation at: 

www.TaxAid.com or www.OVDPLaw.com 
or Toll Free at 888-8TaxAid (888) 882-9243

Read more at: Tax Times blog

According to Law360, a Swiss couple owe accuracy penalties totaling $500,000 for 2006 and 2007 because their amended returns were submitted after a summons, the U.S. Tax Court said on August 31, 2022 in the case of Johannes et ux. v. Commissioner, docket number 14410-15, in the U.S. Tax Court.

Have an FBAR Penalty Problem?  

 

 

 Contact the Tax Lawyers at 

Marini& Associates, P.A. 

 

 

for a FREE Tax Consultation at: 

www.TaxAid.com or www.OVDPLaw.com 
or Toll Free at 888-8TaxAid (888) 882-9243

Read more at: Tax Times blog