Category Archives: criminal tax law

According to the DoJ, from 2010 through 2019, James M. Robar, of Colorado Springs, Colorado, did not timely file tax returns with the IRS. Beginning in approximately February 2012 James Robar was employed by a U.S. Department of Defense contracting company, eventually serving as its managing director starting in 2015. 

In 2019, after receiving a $1 million bonus from his employer, Robar purchased two properties at a total cost of slightly more than $1 million, and he titled both properties solely in his spouse’s name. 

In Total, Robar Did Not Report Approximately $5.5 Million
In Compensation He Earned From 2012 Through 2019, Causing A Tax Loss To The Government Of More Than $1.5 Million.

Robar is the second defendant associated with the defense contracting company to plead guilty. Charles Squires pleaded guilty to tax evasion in February 2022.

Robar is scheduled to be sentenced at a later date and faces a maximum penalty of five (5) years in prison. He also faces a period of supervised release, restitution and monetary penalties. 

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Even though the Internal Revenue Service issues most refunds in less than 21 days for taxpayers who filed electronically and chose direct deposit, some refunds may take longer.

Many different factors can affect the timing of a refund after the IRS receives a return. A  manual review may be necessary when a return has errors, is incomplete or is affected by identity theft or fraud.

Other returns can also take longer to process, including when a return needs a correction to the Child Tax Credit or Recovery Rebate Credit amount, includes a claim filed for an Earned Income Tax Credit or an Additional Child Tax Credit, or includes a Form 8379, Injured Spouse Allocation , which could take up to 14 weeks to process.

The fastest way to get a tax refund is by filing electronically and choosing direct deposit. Taxpayers who don’t have a bank account can find out more on how to open an account at an FDIC-Insured bank or the National Credit Union Locator Tool.

Some returns may require additional review and may take longer. Also, remember to take into consideration the time it takes for a financial institution to post the refund to an account or to receive it by mail.

To check the status of a refund, taxpayers should use the Where’s My Refund? tool on IRS.gov. Information for the most current tax year filed is generally available within 24 hours after the IRS acknowledges receipt of a taxpayer’s e-filed return. If they filed a paper return, taxpayers should allow four weeks before checking the status.

The IRS will contact taxpayers by mail when more information is needed to process a return. IRS phone and walk-in representatives can only research the status of a refund if it has been:

• 21 days or more since it was filed electronically (or since the IRS filing season start date – whichever is later),
• Six weeks or more since a return was mailed , or when
• Where's My Refund? tells the taxpayer to contact the IRS.

Before filing a return, taxpayers should make IRS.gov their first stop to find online tools to help get the information they need to file. The tools are easy-to-use and available anytime. Millions of people use them to help file and pay taxes, find information about their accounts, get answers to tax questions and get tips on filing a return.

Taxpayers should review the special instructions to validate an electronically filed 2021 tax return if their 2020 return has not been processed or they used the Non-Filers tool in 2021 to register for an advance Child Tax Credit payment or third Economic Impact Payment in 2021.

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In Rev Proc 2022-18, 2022-13 IRB 933, the IRS waived the residency and presence tests applicable for the 2021 Code Sec. 911 foreign earned income and foreign housing cost exclusions with respect to certain U.S. individuals in:

• Iraq, 
• Burma (Myanmar), 
• Chad, 
• Afghanistan, and 
• Ethiopia 

due to adverse conditions in those countries.

Code Sec. 911(a) and Code Sec. 911(c)(4) allow a "qualified individual" to exempt from taxation the individual's foreign earned income (up to the exclusion amount of $108,700 for 2021) and the housing cost amount.  

A qualified individual is an individual whose tax home is in a foreign country and who is either: (1) a U.S. citizen (or, in certain situations, U.S. resident alien) who satisfies the IRS that they have been a bona fide resident of one or more foreign countries for an uninterrupted period that includes an entire tax year (bona fide foreign residence test), or (2) a U.S. citizen or resident who, during a period of 12 consecutive months, is present in one or more foreign countries for at least 330 full days (foreign physical presence test). (Code Sec. 911(d)(1))

Under certain circumstances, the time requirements of the foreign residence test and the foreign presence test may be waived. If these requirements are waived, the taxpayer is treated as having met the foreign residence requirement for the period during which they were a bona fide resident of the foreign country, or the taxpayer will be treated as having met the foreign presence requirement for the period during which they were present in the foreign country.

Three conditions must be met for the waiver to apply: (1) the taxpayer must have been a bona fide resident of, or present in, a foreign country for a certain period; (2) before the taxpayer meets the time requirements for the foreign residence test or the foreign presence test, they must leave the foreign country during a period in which IRS determines, after consultation with the State Department, that individuals had to leave the foreign country because of war, civil unrest or similar adverse conditions in that country that prevented the normal conduct of business by those individuals; and (3) the taxpayer must establish to IRS's satisfaction that he could reasonably have been expected to meet the time requirements but for the war, civil unrest or similar adverse conditions. (Code Sec. 911(d)(4))

For 2021, the Treasury secretary, in consultation with the secretary of state, has determined that war, civil unrest, or similar adverse conditions precluded the normal conduct of business in the following countries beginning on the specified date:

Country	Date of Departure On or After
Iraq	January 19, 2021
Burma	March 30, 2021
Chad	April 17, 2021
Afghanistan	April 27, 202
Ethiopia	November 5, 2021

For example, for purposes of Code Sec. 911, an individual who left Iraq on or after January 19, 2021, will be treated as a qualified individual for the period during which that individual was present in, or was a bona fide resident of, Iraq if the individual establishes a reasonable expectation that he or she would have met the requirements of Code Sec. 911(d) but for those conditions.

To qualify for relief under section Code Sec. 911(d)(4), an individual must have established residency, or have been physically present, in the foreign country on or before the date that the Treasury secretary determines that individuals were required to leave the foreign country. Thus, for example, individuals who were first physically present or established residency in Iraq after January 19, 2021, are not eligible to qualify for the exception provided in Code Sec. 911(d)(4) for 2021.

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The IRS announced on March 21, 2022, that Money received through ‘crowdfunding’ may be taxable. 

Crowdfunding is a method of raising money through websites by soliciting contributions from a large number of people. The contributions may be solicited to fund businesses, for charitable donations, or for gifts. In some cases, the money raised through crowdfunding is solicited by crowdfunding organizers on behalf of other people or businesses. In other cases, people establish crowdfunding campaigns to raise money for themselves or their businesses.

he crowdfunding website or its payment processor may be required to report distributions of money raised if the amount distributed meets certain reporting thresholds by filing Form 1099-K, Payment Card and Third Party Network Transactions, with the IRS. If Form 1099-K is required to be filed with the IRS, the crowdfunding website or its payment processor must also furnish a copy of that form to the person to whom the distributions are made. The American Rescue Plan Act clarifies that the crowdfunding website or its payment processor is not required to file Form 1099-K with the IRS or furnish it to the person to whom the distributions are made if the contributors to the crowdfunding campaign do not receive goods or services for their contributions.

Prior to 2022, the threshold for a crowdfunding website or payment processor to file and furnish a Form 1099-K was met if, during a calendar year, the total of all payments distributed to a person exceeded $20,000 in gross payments resulting from more than 200 transactions or donations.

For Calendar Years Beginning After December 31, 2021,
The Threshold Is Lowered And Is Met If, During A
Calendar Year, The Total Of All Payments Distributed
To A Person Exceeds $600 In Gross Payments,
Regardless Of The Number Of Transactions Or Donations.

Accordingly, if a crowdfunding website or its payment processor makes distributions of money raised that meet the reporting threshold, and the contributors to the crowdfunding campaign received goods or services for their contributions, then a Form 1099-K is required to be filed with the IRS. Additionally, if the distributions of the money raised are made to the crowdfunding organizer, a copy of the Form 1099-K must be furnished to the organizer; alternatively, if the distributions of the money raised are made directly to individuals or businesses for whom the organizer solicited funds, the Form 1099-K must be furnished to those individuals or businesses that receive amounts that meet the reporting threshold.

A person receiving a Form 1099-K for distributions of money raised through crowdfunding may not recognize the filer's name on the form. Sometimes the payment processor used by the crowdfunding website, rather than the crowdfunding website itself, will issue the Form 1099-K and be included as the filer on the form. If the recipient of a Form 1099-K does not recognize the filer's name or the amounts included on the Form 1099-K, the recipient can use the filer's telephone number listed on the form to contact a person knowledgeable about the payments reported.

Box 1 on the Form 1099-K will show the gross amount of the distributions made to a person during the calendar year, but issuance of a Form 1099-K doesn't automatically mean the amount reported on the form is taxable to the person receiving the form. As discussed below, the income tax consequences depend on all the facts and circumstances. If the distributions reported on a Form 1099-K are not reported on the tax return of the recipient of the form, the IRS may contact the recipient for more information. The recipient will have the opportunity to explain why the crowdfunding distributions were not reported on the recipient's tax return.

See FS-2022-20 four more information regarding "Crowdfunding."

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