Category Archives: criminal tax law

In U.S. v. Vettel, case number 4:21-cv-03099, in the U.S. District Court for the District of Nebraska, a Nebraska resident denied the U.S. government's claims that his failure to report holdings in a Swiss bank account that received money from a sham corporation in Belize constituted willful failure to file, according to filing in Nebraska federal court.

David L. Vettel's attorney admitted his client did not file a report of foreign bank and financial accounts for 2006 through 2011, but he should not be liable for almost $637,000 in penalties, interest and fees resulting from the maximum penalty being assessed, the attorney told the court.

Vettel also denied the allegations that he set up a corporation in Belize for the sole purpose of holding his account at the Swiss bank BSI SA, which U.S. attorneys in their complaint claim received deposits totaling more than $1.6 million from 2006 through 2010.

During the years in question, Vettel employed a certified public accountant to prepare his federal income tax returns but didn't disclose the bank account to the CPA, nor any of the money deposited into the account on his federal returns for those years, according to the government.  LOTS OF LUCK with this defense!!!

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The Treasury Inspector General for Tax Administration (TIGTA) has completed its annual review of IRS compliance with requirements of the Code when taxpayers exercise their rights to appeal the filing of a Notice of Federal Tax Lien or the issuance of a Notice of Intent to Levy. (Audit Report No. 2021-10-049)

The IRS Independent Office of Appeals (Appeals) properly provided taxpayers with only one hearing for the tax period(s) related to the unpaid tax and an impartial hearing officer for Collection Due Process and Equivalent Hearings. Appeals hearing officers verified applicable law or administrative procedures were met and allowed taxpayers to raise issues at the hearing related to the unpaid tax. They also made a determination on the proposed levy and/or filing of the Notice of Federal Tax Lien after considering whether the action(s) balanced efficient tax collection against the taxpayer’s concern that the action(s) be no more intrusive than necessary.

Similar To Prior Audits, TIGTA Identified Processing Errors
In 16 (20 Percent) of 81 Sampled Taxpayer Cases.

Processing errors related to proper classification of hearing requests and incorrect Collection Statute Expiration Dates (CSED) on the taxpayer’s accounts. For example, taxpayer accounts had CSED errors due to incorrectly input CSED suspension start and stop dates. 

• In some cases, the IRS incorrectly extended the time period, allowing the IRS additional time to collect delinquent taxes. 
• In other cases, the IRS incorrectly decreased the time to collect delinquent taxes. 

Based on our sample results, TIGTA estimates that Appeals misclassified 302 Collection Due Process or Equivalent Hearing cases, and 3,623 and 1,510 taxpayer accounts had their CSED overstated and understated, respectively, during Fiscal Year 2020. 

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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 (888-882-92

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According to Procedurally Taxing on August 27, 2021, the Tax Court issued a press released stating that it anticipates returning to in-person proceedings starting with the winter trial sessions for 2022.  In the announcement, the Tax Court also states that it will continue to hold trials remotely where appropriate.

All of the Tax Court calendars scheduled for the Fall 2021 calendars are remote. 

Until the August 27 announcement it was unknown when Tax Court judges would begin holding in-person trials again.  

It was also unknown if the Tax Court would continue to offer remote proceedings as an option.  In issuing Administrative Order 2021-1 the Tax Court terminated Administrative Order 2020-2 which replaced in-person proceedings with remote proceedings and set a path forward for post-pandemic trials at the Tax Court.  

By adopting a rule that allows for both in-person and remote proceedings, the Tax Court follows another Article 1 court, the Court of Veterans Appeals, and provides maximum flexibility for the parties and itself to conduct future proceedings.

Have IRS Tax Problems?

     Contact the Tax Lawyers at

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

In TIGTA's Report on IRS' efforts to address the compliance risk of underreporting of S Corporation officers’ compensation indicated that the audit was initiated because some S corporation owners may be motivated to underpay or not pay themselves in order to avoid paying employment taxes.

What TIGTA Found was that the issue of S corporations not paying salaries to officers and avoiding employment taxes has been reported for many years. IRS revenue agents have the opportunity to assess the issue when examining Forms 1120-S, U.S. Income Tax Return for an S corporation, in the field; addressing the issue more directly by examining it in the IRS’s Employment Tax function; or through Compliance Initiative Projects. 

The IRS is selecting less than 1 percent of all S corporations for examination. When the IRS does examine S corporations, nearly half of the revenue agents do not evaluate officer’s compensation during the examination even when single-shareholder owners may not have reported officer’s compensation and may have taken tax-free distributions in lieu of compensation. 

TIGTA’s analysis of all S corporation returns received between Processing Years 2016 through 2018 identified 266,095 returns with profits greater than $100,000, a single shareholder, and no officer’s compensation claimed that were not selected for a field examination. 

The Analysis Found That The Single-Shareholder Owners Had Profits Of $108 Billion And Took $69 Billion In The Form of
A Distribution, Without Reporting They Received
Officer’s Compensation For Which They Would
Have To Pay Social Security And Medicare Tax.

TIGTA estimated 266,095 returns may not have reported nearly $25 billion in compensation and may have avoided paying approximately $3.3 billion in Federal Insurance Contributions Act tax. 

Finally, TIGTA identified 151 S corporations with nonresident alien shareholders. S corporations are not permitted to have nonresident aliens as shareholders. If the IRS had identified these 151 S corporations and their 424 returns, it may have converted them to C corporations and assessed $5 million in corporate income taxes.

Have IRS Tax Problems?

     Contact the Tax Lawyers at

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