Category Archives: criminal tax law

According to the DoJ, a federal grand jury in Alexandria, Virginia, returned an indictment, unsealed today, charging a Virginia man with income tax evasion and failure to pay employment taxes.

According to the indictment, Rick Tariq Rahim of Great Falls owned and operated two businesses, BV Management LLC, an Amazon reseller, and BusinessVentures.com LLC, an umbrella company over other businesses including laser tag facilities. 

Starting In At Least 2012, Rahim Allegedly Took Steps To
Evade IRS Efforts To Collect More Than $1 Million In Federal Income Taxes He Allegedly Owed For Tax Years 2004 And 2011.

The indictment charges that in November 2016, Rahim submitted a false form to the IRS that omitted valuable assets he owned, including:

• 

  a helicopter, 
  

• a 2006 Bentley, 
• a 2008 Lamborghini and 
• real property, the ownership of which he allegedly transferred to his wife two weeks after submitting the form. 

The indictment further alleges that Rahim also withdrew a total of more than $1.1 million in cash in amounts less than $10,000 to avoid triggering currency transaction reports from the bank and paid personal expenses from his businesses’ bank accounts, including more than $889,000 toward his mortgages and more than $669,000 to purchase or lease cars, including three different Lamborghinis. 

In addition, the indictment charges that from 2015 to 2021, Rahim also did not pay to the IRS the taxes that his businesses withheld from employee paychecks or file quarterly tax returns reporting those withholdings.

If convicted, Rahim faces a maximum penalty of five (5) years in prison for the tax evasion count and five (5) years in prison for each count of failing to pay over employment tax withholdings. 

Have An IRS Tax Problem?

Marini & Associates, P.A. 

Read more at: Tax Times blog

The Internal Revenue Service has collected $122 million in back taxes from high-income, high-wealth individuals in a new enforcement initiative, the agency said on Friday October 20, 2023.

The back taxes were collected from 100 high-income individuals the agency targeted in its effort to ramp up enforcement against people with more than $1 million in income who haven't filed taxes and those who have failed to pay more than $250,000 in tax debt, the IRS said in a statement. 

Senate Finance Committee Chairman Ron Wyden, D-Ore., applauded the agency's enforcement and customer service accomplishments.

"Investing in the IRS is already paying off with better customer service for taxpayers and a real plan to crack down on the worst wealthy and corporate tax cheats," Wyden said in a statement Friday, later adding, "I'll continue to defend these enforcement efforts against the far-right's effort to roll back these plans and protect corporate malfeasance."

Lawmakers are still working to determine the agency's funding levels for the upcoming year. The IRS funding bill passed by the Republican-led House Appropriations Committee in July would give the agency $11.2 billion for fiscal 2024, a $1.1 billion drop compared with the agency's fiscal 2023 budget. The Senate Appropriations Committee's IRS funding bill would give the agency $12.3 billion, which is in line with the agency's current-year funding.

The Agency Also Had $21.4 Billion Of The $80 Billion Funding Boost It Received Under The Inflation Reduction Act Clawed Back Under The Fiscal Responsibility Act In June.

Werfel has warned repeatedly that if the agency has its annual funding cut in spending bills, it will need to use Inflation Reduction Act money to run day-to-day operations, which will exhaust resources intended to make improvements for taxpayers.

"We know that implementing such an ambitious plan is challenging, and we understand that our challenges are made even more stark by ongoing budget uncertainty," Werfel said Thursday. "That's why it's so important to continue reporting on the strides we're making to modernize and improve our service so that Congress and the American people know that we are investing our resources wisely and in ways that will help everyone and ensure fairness of the tax system."

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 7, 2023 we posted New Beneficial Ownership Information Requirement for Most Businesses Beginning January 1, 2024, where we discussed that beginning on January 1, 2024, many corporations, limited liability companies, and other entities created or registered to do business in the United States must report information about their beneficial owners—the persons who ultimately own or control the company, to the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN).

The Financial Crimes Enforcement Network (FinCEN) has issued a Notice of Proposed Rulemaking (NPRM) that would extend the initial beneficial ownership information (BOI) reporting deadline from 30 to 90 days for reporting companies created or registered in 2024. (FinCEN Press Release, 9/27/2023)

The Corporate Transparency Act (CTA) established beneficial ownership information (BOI) reporting requirements for certain types of corporations, limited liability companies, and other similar entities created in or registered to do business in the U.S. FinCEN issued final rules implementing the BOI reporting requirements in September 2022. 

The final rule establishes a database of beneficial ownership information reported by a "reporting entity" (a corporation or similar legal entity) including the full legal names, dates of birth, and addresses for all individuals who have "substantial control" over the entity or who own at least 25% of it. 

Under the final rule, companies created or registered before January 1, 2024, would have until January 1, 2025, to file their initial BOI reports with FinCEN. Entities created or registered on or after January 1, 2025, would have 30 days to file their initial BOI reports. The new proposal would not change these deadlines. Only newly created or registered companies would get an extension to file their initial BOI reports. 

FinCEN believes that the proposed extension of the BOI reporting deadline for the first year of implementation will increase compliance, reduce burden on reporting companies, and promote the creation of a highly useful database.

FinCEN believes the proposed extension from 30 to 90 days will give reporting companies created or registered in 2024 additional time to understand their regulatory obligations under the BOI reporting rule and obtain the required information. They will also have additional time to become familiar with FinCEN's guidance and educational materials and resolve questions that may arise when completing their initial BOI reports.

Have A Beneficial Ownership 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, the Tax Court ruled that estate of actor James Caan, who played Sonny Corleone in "The Godfather," owes income taxes on $1.5 million from a retirement account that was emptied early and then liquidated while being overseen by Caan's advisers.

An individual retirement account belonging to Caan, who died in July 2022, included a non-publicly traded partnership interest that was held in custody by UBS and which is taxable after unanswered letters from the bank triggered its full distribution to Caan in 2015.

The estate is also ineligible for a waiver of the 60-day deadline for rolling the distribution into another IRA, the court said, upholding a determination by the Internal Revenue Service. A year after UBS distributed the account, one of Caan's advisers ordered the asset liquidated and then transferred its cash value into another IRA, making it ineligible for tax-free treatment under Internal Revenue Code Section 408.

"This Case Is A Quintessential Example Of The Pitfalls
Of Holding Nontraditional, Non-Publicly Traded Assets
In An IRA," Tax Court Judge Elizabeth A.

Copeland wrote for the court. "Failure to follow the labyrinth of rules surrounding these assets can mean forfeiting their tax-advantaged status."

According to Caan's custodial agreement with UBS, he was required to provide the bank with the fair market value of the partnership interest every year or the bank would drop its custody and distribute its contents back to him. When Caan failed to give the bank the 2014 value by the due date in January 2015, the bank tried to obtain the value from the hedge fund and then sent two letters, in August and October, to the California firm that served as Caan's business manager. The final letter warned that the account was about to be distributed and outlined the tax implications, the decision said.

Caan's advisers testified that they never saw the letters, that UBS must not have sent them, and that they didn't know about the distribution, according to the decision. The bank made a so-called phantom distribution by resigning as custodian and purportedly distributing the interest without telling Caan, the advisers said.

Judge Copeland found the advisers' testimony lacked credibility, pointing out that they had received all previous mail for Caan from UBS and would have noticed when suddenly account statements stopped coming, according to the decision.

"It Seems Far More Likely That There Was Simply A Lack
Of Communication And Coordination Between The Professionals Overseeing Mr. Caan's Affairs,"
Judge Copeland Said.

Caan reported the partnership interest distribution for 2015 on his tax return but claimed it was nontaxable. Based on the bank's initial value of the partnership interest at nearly $2 million, rather than the $1.5 million both Caan and the IRS eventually agreed was more accurate, the IRS issued a notice of deficiency for $780,000 for 2015 and an accuracy-related penalty of $156,000, according to the decision.

In addition to petitioning the Tax Court for a redetermination of the deficiency, Caan asked the agency to issue a private letter ruling giving him an extension on the 60-day rollover period. One of Caan's advisers liquidated the partnership interest to move it to a different financial institution after realizing it couldn't be transferred through a national automated account transfer service, according to the decision.

Have An IRS Tax Problem?

Marini & Associates, P.A. 

Read more at: Tax Times blog