Category Archives: criminal tax law

On August 16, 2022 we posted Inflation Reduction Act of 2022 Is Law, where we discussed what's in the Inflation Reduction Act allocates $80 billion to increase enforcement by the IRS.

Now according to Law360, the Internal Revenue Service is on track to deliver the spending plan for the Inflation Reduction Act's nearly $80 billion funding boost to the Treasury Department by the Feb. 17, 2023 deadline, according to a Treasury Inspector General for Tax Administration report released on Monday, January 16, 2023.

The IRS is taking actions to develop the spending plan detailing how the agency wants to spend Inflation Reduction Act funding over a decade on technology, workers and service improvement, according to the report. The plan, requested by Treasury Secretary Janet Yellen, must also include metrics for focus areas and goals the agency will strive to reach.

The IRS is working to monitor the implementation of Inflation Reduction Act tax provisions, coordinate organizational transformation efforts and track funding and spending, TIGTA said. According to the report, the agency is on track to timely implement all provisions before the filing season begins.

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

A taxpayer who bought cryptocurrency in 2022 and saw its value plummet to less than a cent, but retained ownership over it at the end of the year, can't take a loss on the steep decline in value, the Internal Revenue Service's Office of Chief Counsel said in memorandum released Friday.

In Chief Counsel Advice Memorandum 202302011, dated January 17, 2023, the IRS said that such a taxpayer hasn't actually suffered a loss yet for the purposes of a deduction under Internal Revenue Code Section 165. Even if the decline in value had been a loss, the taxpayer still couldn't take the deduction because it would be categorized as miscellaneous and blocked under IRC Section 67(g), the agency said.

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

According to Law360, as a result of a Floridian who moving his assets offshore in the wake of an $18 million penalty for failing to report foreign bank accounts, the U.S. should be allowed to seize the overseas funds, the U.S. told a Florida federal court on January 6, 2023 in U.S. v. Isac Schwarzbaum, case number 9:18-cv-81147, in the U.S. District Court for the Southern District of Florida.

Isac Schwarzbaum has not paid any amount he owes, forcing the U.S. to repatriate the funds he has deposited in several Swiss banks, the U.S. said in a motion to repatriate foreign assets.

"Schwarzbaum's blatant refusal to pay the judgment deprives the United States of funds to which it is legally entitled, and it also undermines the authority of the court," the U.S. said. 

"Schwarzbaum's Actions May Encourage Others To Simply Refuse To Pay, Or Move Assets Offshore, Unless The United States Pursues Enforced Collection Efforts." 

The Internal Revenue Service penalized Schwarzbaum in 2013 and 2014 for his willful failure to file Reports of Foreign Bank and Financial Accounts, or FBARs, for 2006 through 2009 on his Swiss accounts, according to court documents. The U.S. government sued in 2018 after he failed to pay the penalties, and a Florida federal district court found in March 2020 that he willfully failed to file.

However, the Eleventh Circuit found that the IRS erroneously used the highest balances of his foreign bank accounts to compute the penalties rather than their balances as of June 30, the deadline for filing FBARs, and made its own calculations of the penalty amount. The IRS should have redone the calculations, the Eleventh Circuit said in remanding the case. This remand did not vacate the entire judgment, the Florida court later ruled.

The IRS Recalculated Schwarzbaum's Penalties At 

$17.9 Million As Of Sept. 12, 2022.

Schwarzbaum has no intention of paying the money he owes, the U.S. said in its motion. He sold his home in Florida and moved the proceeds overseas, it said. Schwarzbaum also has fled the country for Switzerland, the U.S. added, and has no intention of returning.

The Question Now Is How Does The IRS Levy On Assets
Outside The US or Against a Taxpayer
Who Is No Longer AUS Resident?

Can't Wait To See The Answer To This One!

Do You Have Undeclared Offshore Income?

Contact the Tax Lawyers at 

Marini & Associates, P.A.   

for a FREE Tax Consultation 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 March 1, 2022 we posted IRS Reminds Taxpayers To Report Gig Economy Income & Virtual Currency Transactions, where we discussed that in IR-2022-45 the Internal Revenue Service reminded taxpayers of their reporting and potential tax obligations from working in the gig economy & making virtual currency transactions.

Now the Internal Revenue Service announced on December 23, 2022, a delay in reporting thresholds for third-party settlement organizations set to take effect for the upcoming tax filing season.

As a result of this delay, third-party settlement organizations will not be required to report tax year 2022 transactions on a Form 1099-K to the IRS or the payee for the lower, $600 threshold amount enacted as part of the American Rescue Plan of 2021.

As part of this, the IRS released guidance today outlining that calendar year 2022 will be a transition period for implementation of the lowered threshold reporting for third-party settlement organizations (TPSOs) including Venmo, PayPal and CashApp that would have generated Form 1099-Ks for taxpayers.

“The IRS and Treasury heard a number of concerns regarding the timeline of implementation of these changes under the American Rescue Plan,” said Acting IRS Commissioner Doug O’Donnell. 

The additional time will help reduce confusion during the upcoming 2023 tax filing season and provide more time for taxpayers to prepare and understand the new reporting requirements.”

The American Rescue Plan of 2021 changed the reporting threshold for TPSOs. The new threshold for business transactions is $600 per year; changed from the previous threshold of more than 200 transactions per year, exceeding an aggregate amount of $20,000. The law is not intended to track personal transactions such as sharing the cost of a car ride or meal, birthday or holiday gifts, or paying a family member or another for a household bill.

Under the law, beginning Jan. 1, 2023, a TPSO is required to report third-party network transactions paid in 2022 with any participating payee that exceed a minimum threshold of $600 in aggregate payments, regardless of the number of transactions. TPSOs report these transactions by providing individual payee’s an IRS Form 1099K, Payment Card and Third-Party Network Transactions.

The transition period described in Notice 2023-10, delays the reporting of transactions in excess of $600 to transactions that occur after calendar year 2022. The transition period is intended to facilitate an orderly transition for TPSO tax compliance, as well as individual payee compliance with income tax reporting. A participating payee, in the case of a third-party network transaction, is any person who accepts payment from a third-party settlement organization for a business transaction.

Additional details on the delay will be available in the near future along with additional information to help taxpayers and the industry. For taxpayers who may have already received a 1099-K as a result of the statutory changes, the IRS is working rapidly to provide instructions and clarity so that taxpayers understand what to do.

The IRS also noted that the existing 1099-K reporting threshold of $20,000 in payments from over 200 transactions will remain in effect.

Have an IRS Tax Problem?

Read more at: Tax Times blog