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Category Archives: criminal tax law

IRS CONTINUES to Criminally Prosecutes Employers For Failure To Pay Withheld Payroll Taxes – As Promised!

 On Febuary 11, 2022 we posted IRS CONTINUES to Criminally Prosecutes Employers For Failure To Pay Withheld Payroll Taxes - As Promised! which lists multiple recent cases where the IRS Criminally prosecutes Employers for Failure To Pay Withheld Payroll Taxes.

Now According To The DoJ, A N.Y. Man Plead Guilty To
Willful Failing To Collect And Pay Over Employment Taxes
on Behalf Of His Spa Companies.

According to court documents and statements made in court, Sung Soo Chon, 63, aka Steve Chon, was the CEO, president and majority owner of Spa Castle Queens in College Point, New York, and Spa Castle Texas, in Carrolton, Texas. 

Chon oversaw daily operations at the two spas and related businesses, and directed subordinates to pay cash wages to some employees, many of whom were not legally permitted to work in the United States.

From the first quarter of 2014 through the first quarter of 2017, Chon did not withhold all of the legally required federal payroll taxes from the wages of some of the spa employees and filed false employment tax returns with the IRS. 

During This Period, Chon Caused The Businesses To Conceal
More Than $1.3 Million In Cash Wages.

In Total, The Spa Companies Did Not Pay $199,238
In Payroll Taxes Due To The IRS.

Chon is scheduled to be sentenced on Dec. 6. He faces a maximum penalty of five (5) years in prison, as well as a period of supervised release, restitution and monetary penalties. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

  Thinking of Borrowing From Your Company's
Payroll Tax Withholdings?

You Better Thank Again, if You Like Your Freedom!

Have Payroll Tax Problems?
 Contact the Tax Lawyers at 
Marini & Associates, P.A.  

for a FREE Tax HELP Contact Us at:
or Toll Free at 888-8TaxAid (888-882-9243) 

Read more at: Tax Times blog

Comm'r Disagrees With Criticism of IRS Audit Rates & IRS' Additional Funding Needs

On May 19, 2022 we posted IRS Audits Have Plummeted in the Last Decade - According to GAOwhere we discussed that the GAO published a report on trends in IRS audit rates, audit results, and resources used for audits across individual taxpayer income levels. (GAO-22-104960) and that IRS examining or auditing a decreasing proportion of individual tax returns, concern has been raised over "the potential for declining taxpayer compliance, as well as whether IRS is equitably selecting taxpayers for audit, as audit rates for higher-income taxpayers have decreased more than audit rates for lower-income taxpayers." 

Now according to Law360, IRS Commissioner Chuck Rettig said on Thursday, June 23, 2022, that claims the agency audits more poor people than wealthy ones are wrong and harmful to tax administration, renewing his pushback against criticism of the agency's audit rates.

When Audit Rates Of Earned Income Tax Credit Claims
Are Compared Against Those For Taxpayers With Incomes
Over $1 Million, 

Audit Rates For The Wealthy Are In Fact Higher,

Rettig said during the New York University School of Professional Studies Tax Controversy Forum held in New York City and online. Claims to the contrary are damaging to tax administration, he said.

He also said anyone looking at data objectively and "not with a narrative trying to take down the IRS or tax administration" would see the agency historically audits about 7% to 8% of taxpayers with incomes over $10 million. 

Rettig's Comments Follow The IRS Saying In May
That It Audited 5.8% Of Returns Reporting $10 Million
Or More In Income For The 2017 Tax Year, 
Compared With 21.5% Of Such Returns For 2010. 

The agency said at the time that resource constraints hindered its ability to monitor the wealthy. 

The Transactional Records Access Clearinghouse, a data research organization based at Syracuse University, also said in a report that the IRS audits low-income taxpayers five times higher than everyone else based on fiscal year 2021 data. 

Rettig Was Asked About That Research During A
House Ways And Means Subcommittee Hearing In
March And Called The Findings Completely False.

The data research organization asked Rettig to retract his statement that the organization's findings were totally false, and said the organization bases its reporting on data the agency provides. 

Just as Rettig blasted criticism of the agency's audit rates Thursday, he ripped people who say the agency doesn't need more money.

"Those who say IRS doesn't need additional funding, they have a different agenda," he said. "Their agenda should be for this country."

The agency needs sustained multiyear funding, Rettig said. Although lawmakers passed legislation that provided the agency a $675 million increase through September, about $350 million of that will be used for "maintaining current status" for the agency and contracts, he said.

"So we got let's say a $375 million boost, try to take $375 million and fill the holes in a ship that have existed for more than 10 years because there was not adequate funding," he said. "Why do we have trouble providing consistent, significant multiyear flexible funding to the Internal Revenue Service?" 


Have an IRS Tax Problem?

     Contact the Tax Lawyers at

Marini & Associates, P.A. 

for a FREE Tax HELP Contact us at:
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Toll Free at 888 8TAXAID (888-882-9243)



Read more at: Tax Times blog

Author of Tax-Dodging Guides Agrees To $540K Judgment In FBAR Case

According to
Law360, the author of several tax-dodging guides agreed to pay more than half a million dollars in penalties for failing to report overseas bank accounts he maintained in Asia, according to documents filed in federal court i
n the case of U.S. v. Kelly, case number 3:21-cv-03043, in the U.S. District Court for the Northern District of Texas.

The author, Nickolas J. Kelly, will pay $540,000 plus
late payment penalties, collection costs and interest for his willful failure to report at least five (5) accounts under his
company's name, Superdrive Publishing Ltd.,

according to documents filed on June 21, 2022.

In 2014, Kelly maintained interest in three accounts at HSBC in Hong Kong, one account at Kasikorn Bank in Thailand and one at the Bank of China in mainland China that had an aggregate balance exceeding $10,000, the government alleged in court documents. 

By January 2021, Kelly Owed Nearly $540,000 In
FBAR Penalties, According To The Complaint.

On Superdrive's website, articles written by Kelly advise on how to avoid reporting assets to the government, with titles including "The Hong Kong Offshore Business Guide," "How to Own Your House and Car Anonymously" and "How to Be a Free Man," according to court documents.

Have an FBAR Penalty Problem?  

 Contact the Tax Lawyers at 

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Toll Free at 888-8TaxAid (888) 882-9243

Read more at: Tax Times blog

Return Processing Backlog Addressed by Taxpayer Advocate's Mid-Year Report To Congress

National Taxpayer Advocate Erin M. Collins today released her statutorily mandated mid-year report to Congress. The report expresses concern about continuing delays in the processing of paper-filed tax returns and the consequent impact on taxpayer refunds. At the end of May, the agency had a backlog of 21.3 million unprocessed paper tax returns, an increase of 1.3 million over the same time last year.

“The IRS has said it is aiming to crush the backlogged inventory this year, and I hope it succeeds,” Collins wrote. 

“Unfortunately, At This Point The Backlog Is Still Crushing
The IRS, Its Employees, And Most Importantly, Taxpayers.
As Such, The Agency Is Continuing To Explore
Additional Processing Strategies.” 

More than 90% of individual income taxpayers e-file their returns, yet last year, about 17 million taxpayers filed their returns on paper. Some choose to file on paper. Some have no choice because they encounter e-filing barriers, such as when they are required to file a tax form or schedule the IRS cannot accept electronically. Before the pandemic, the IRS typically delivered refunds to paper-filers within four to six weeks. Over the past year, refund delays on paper-filed returns have generally exceeded six months, with delays of 10 months or more common for many taxpayers.

Forms 1040 are just one component of the paper tax returns processing backlog. Millions of business tax returns and amended tax returns (both individual and business) are also filed on paper. The overall backlog has increased by 7% over the past year as shown in the Figure 1.

Figure 1: Status of Unprocessed Paper Tax Returns Comparing Weeks Ending May 22, 2021, and May 27, 2022

Figure 1

The IRS Has Publicly Committed To Reducing Its
Paper Tax Return Backlog To A “Healthy” Level
By The End Of The Year, But It Has Not Provided
A Definition Of “Healthy.”

“Historically, the IRS has paid refunds resulting from paper-filed returns within four to six weeks,” Collins wrote. “From a taxpayer perspective, returning to a four-to-six-week refund delivery period is a reasonable definition of ‘healthy.’”

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
Toll Free at 888 8TAXAID (888-882-9243)



Read more at: Tax Times blog