IRS Blasted for Seizing Assets of People who Deposit Cash Under $10,000

On February 11 Congress blasted the IRS Commissioner John Koskinen on the Service’s use of civil-asset forfeiture laws, demanding to know why innocent small business owners are being target when they have committed no crime. 

This issue is two fold: 1) whether IRS collection officers are under pressure to fill quotas on assets seizures, which is prohibited by law to reward these people based on the amount they have collected; and 2) the IRS practice of seizing the bank accounts of people suspected of "structuring," that is, of making cash deposits worth less than $10,000 to avoid reporting requirements, when in fact small business owners may make several deposits under $10,000 for a variety of reasons and none of them are illegal.

 

I can say with personal experience this is a real problem.  In fact, I was involved in case where the IRS/DOJ seized the funds of a small business owner from his bank account and prosecuted him for "structuring" when in fact that person paid all the taxes on the deposits associated with those funds.  He operated a cash business and the bank told him not to make deposits over $10,000 because that was "bad".   He made sure his deposits where under $10,000, but reports all the income from the deposits and paid all the taxes.  In this case, there was zero harm to the government because there was no tax loss.   Regardless, the IRS seized all his funds and prosecuted him for structuring in federal district court.

 

I am glad to know Congress is looking into these practices by the IRS/DOJ of seizing funds just because the person makes deposits under $10,000.  The person needs to intend to violate the Bank Secrecy Act.   I also believe their should be some harm to government, such as underreporting of taxes or other illegal activity, although this is not a requirement of "structuring."

 

You can contact Joe Wilson at the Wilson Tax Law Group if you have questions about structuring.   Our office phone number is 714-463-4430.

 

 

IRS Blasted for Seizing Assets of People who Deposit Cash Under $10,000

On February 11 Congress blasted the IRS Commissioner John Koskinen on the Service’s use of civil-asset forfeiture laws, demanding to know why innocent small business owners are being target when they have committed no crime. 

This issue is two fold: 1) whether IRS collection officers are under pressure to fill quotas on assets seizures, which is prohibited by law to reward these people based on the amount they have collected; and 2) the IRS practice of seizing the bank accounts of people suspected of "structuring," that is, of making cash deposits worth less than $10,000 to avoid reporting requirements, when in fact small business owners may make several deposits under $10,000 for a variety of reasons and none of them are illegal.

 

I can say with personal experience this is a real problem.  In fact, I was involved in case where the IRS/DOJ seized the funds of a small business owner from his bank account and prosecuted him for "structuring" when in fact that person paid all the taxes on the deposits associated with those funds.  He operated a cash business and the bank told him not to make deposits over $10,000 because that was "bad".   He made sure his deposits where under $10,000, but reports all the income from the deposits and paid all the taxes.  In this case, there was zero harm to the government because there was no tax loss.   Regardless, the IRS seized all his funds and prosecuted him for structuring in federal district court.

 

I am glad to know Congress is looking into these practices by the IRS/DOJ of seizing funds just because the person makes deposits under $10,000.  The person needs to intend to violate the Bank Secrecy Act.   I also believe their should be some harm to government, such as underreporting of taxes or other illegal activity, although this is not a requirement of "structuring."

 

You can contact Joe Wilson at the Wilson Tax Law Group if you have questions about structuring.   Our office phone number is 714-463-4430.

 

 

2015 Dirty Dozen Tax Scams

Each year the IRS posts the worst tax scams across America.   The IRS works with the Department of Justice and its criminal division to shut down these tax scams, but it’s a never ending saga and scammers steal billions of dollars each year of public funds.  Let’s take a look at this year's dirty dozen tax scam list:

 

1. Aggressive and threatening phone calls by criminals impersonating IRS agents. I have had numerous clients call me who received these phone calls.  Hang up on these people and let them know you are sending their information to the FBI.

 

2. Fake emails or websites looking to steal personal information (phishing).  If you get an email from what appears to be the IRS delete it and do not open it.  Call a tax attorney or the IRS for assistance to determine if you have a real tax issue.

 

3. Identity theft continues to be a problem especially around tax time. File your tax return early, the IRS typically accepts the first return filed.  So if you file your return before the scammer, it will be much easier to resolve.  

 

4. Return preparers who prepare bogus returns for clients to claim deductions and credits that they are not entitled to claim.

 

5. Offshore tax evasion and the financial organizations that advice people they no longer need to pay taxes if they move their money offshore.  Contact a tax attorney if you have undisclosed assets offshore and need assistance to resolve this.

 

6. Stating refund amounts before looking at documents, asking individuals to sign blank returns and fees based on a percentage of the refund are signs of a bad tax preparer.

 

7. Fake charitable organizations with names that are similar to familiar or nationally known to attract donations from unsuspecting contributors.

 

8. Hiding income by filing false Form 1099s or other fake documents.  This is a criminal act and the IRS will attempt to put you in jail.  

 

9. Using abusive tax structures to avoid paying taxes. When in doubt, clients should seek an independent opinion from a qualified tax attorney regarding complex products they are offered.

 

10. Inventing income to claim tax credits. Clients are best served by filing the most-accurate return possible because they are legally responsible for what is on their return.

 

11. Erroneously claiming the fuel tax credit. This credit is not available to most taxpayers. But yet each year a sizable group of clients erroneously claim the credit to inflate their refunds.

 

12. Using frivolous tax arguments to avoid paying taxes.

If you need assistance concerning a tax matter, do not hesitate to contact a tax lawyer in Orange County.   Tax scams are immune to the efforts being taken by the US government.  The Orange County Tax Attorneys at Wilson Tax Law Group have experience in federal tax audits, appeals, and criminal prosecutions and IRS matters. You can reach the Wilson Tax Law Group at 714-463-4430.

2015 Dirty Dozen Tax Scams

Each year the IRS posts the worst tax scams across America.   The IRS works with the Department of Justice and its criminal division to shut down these tax scams, but it’s a never ending saga and scammers steal billions of dollars each year of public funds.  Let’s take a look at this year's dirty dozen tax scam list:

 

1. Aggressive and threatening phone calls by criminals impersonating IRS agents. I have had numerous clients call me who received these phone calls.  Hang up on these people and let them know you are sending their information to the FBI.

 

2. Fake emails or websites looking to steal personal information (phishing).  If you get an email from what appears to be the IRS delete it and do not open it.  Call a tax attorney or the IRS for assistance to determine if you have a real tax issue.

 

3. Identity theft continues to be a problem especially around tax time. File your tax return early, the IRS typically accepts the first return filed.  So if you file your return before the scammer, it will be much easier to resolve.  

 

4. Return preparers who prepare bogus returns for clients to claim deductions and credits that they are not entitled to claim.

 

5. Offshore tax evasion and the financial organizations that advice people they no longer need to pay taxes if they move their money offshore.  Contact a tax attorney if you have undisclosed assets offshore and need assistance to resolve this.

 

6. Stating refund amounts before looking at documents, asking individuals to sign blank returns and fees based on a percentage of the refund are signs of a bad tax preparer.

 

7. Fake charitable organizations with names that are similar to familiar or nationally known to attract donations from unsuspecting contributors.

 

8. Hiding income by filing false Form 1099s or other fake documents.  This is a criminal act and the IRS will attempt to put you in jail.  

 

9. Using abusive tax structures to avoid paying taxes. When in doubt, clients should seek an independent opinion from a qualified tax attorney regarding complex products they are offered.

 

10. Inventing income to claim tax credits. Clients are best served by filing the most-accurate return possible because they are legally responsible for what is on their return.

 

11. Erroneously claiming the fuel tax credit. This credit is not available to most taxpayers. But yet each year a sizable group of clients erroneously claim the credit to inflate their refunds.

 

12. Using frivolous tax arguments to avoid paying taxes.

If you need assistance concerning a tax matter, do not hesitate to contact a tax lawyer in Orange County.   Tax scams are immune to the efforts being taken by the US government.  The Orange County Tax Attorneys at Wilson Tax Law Group have experience in federal tax audits, appeals, and criminal prosecutions and IRS matters. You can reach the Wilson Tax Law Group at 714-463-4430.

Groping Chiropractor Sentenced for Bribing IRS Agent

 

The United States Attorney's Office in MA announced that a Chiropractor, Stephen Jacobs, has been sentenced to 9 months in prison for bribing an IRS agent.  Before this happened, however, he kissed a woman's feet while he was treating her and admitted to other inappropriate contact when he was giving a second woman a massage.   So he paid them $5,000 each because he was concerned that they would report him to the police or to the chiropractic board.  Then when the IRS audited him and quested him about the two payments to these women that he had deducted as a business expenses, he paid the IRS auditor $5,000 to issue him a favorable audit letter showing no additional tax for one year and a refund for another year.  The IRS auditor was wearing a wire when he paid him $5,000.  That was the end game for this guy.  Not the brightest bulb in the room.

Contact Joseph Wilson at 714-463-4430 or at Wilson Tax Law Group at www.wilsontaxlaw.com.

 

 

SEE PRESS RELEASE BELOW

 

Department of Justice

U.S. Attorney’s Office

District of Massachusetts

---

FOR IMMEDIATE RELEASE

Tuesday, January 13, 2015

Chiropractor Sentenced for Bribing IRS Auditor

BOSTON – A Lowell chiropractor was sentenced today to nine months in prison for bribing an IRS agent.
Stephen Jacobs, 56, of Lowell, was sentenced to nine months in prison, two years of supervised release, and ordered to pay a $10,000 fine.  Jacobs must report to the custody of the Bureau of Prisons by Feb. 24, 2015.  In October 2014, Jacobs pleaded guilty before U.S. District Court Judge William G. Young to bribery of a public official.
In August 2013, an IRS auditor met with Jacobs, a chiropractor, to examine numerous issues with his federal income tax forms for 2011.  During the initial interview, the auditor advised Jacobs that two $5,000 payments were not allowable deductions after Jacobs admitted that each was a payment to two different women after they accused him of touching them inappropriately during medical treatments.  Jacobs told the auditor that he paid the women because he was concerned that they would report him to the police or to the chiropractic board.  Jacobs admitted that he had begun kissing one woman’s feet while he was treating her.  He also admitted to other inappropriate contact when he was giving the second woman a massage.
Jacobs asked the IRS auditor if there was anything he could do to “just deal with this…”  When the agent said he could not “just deal with this,” Jacobs became agitated and combative, ultimately threatening the agent that he would “ruin [his] career.”
The following month, after several electronically monitored discussions regarding his non-deductible expenses, Jacobs offered to bribe the auditor in exchange for terminating the examination, saying, “. . . you want a bribe? You want me to pay you?...”  The auditor, acting under the direction of law enforcement, then accepted Jacobs’s offer of $5,000 to give Jacobs a favorable audit letter showing no additional tax for one year and a small refund for the next year.  Jacobs paid the auditor $5,000 in cash for the favorable treatment.
United States Attorney Carmen M. Ortiz and Robert O’Malley, Special Agent in Charge of the Treasury Inspector General for Tax Administration, made the announcement today. The case was prosecuted by Eugenia M. Carris of Ortiz’s Public Corruption Unit

Groping Chiropractor Sentenced for Bribing IRS Agent

 

The United States Attorney's Office in MA announced that a Chiropractor, Stephen Jacobs, has been sentenced to 9 months in prison for bribing an IRS agent.  Before this happened, however, he kissed a woman's feet while he was treating her and admitted to other inappropriate contact when he was giving a second woman a massage.   So he paid them $5,000 each because he was concerned that they would report him to the police or to the chiropractic board.  Then when the IRS audited him and quested him about the two payments to these women that he had deducted as a business expenses, he paid the IRS auditor $5,000 to issue him a favorable audit letter showing no additional tax for one year and a refund for another year.  The IRS auditor was wearing a wire when he paid him $5,000.  That was the end game for this guy.  Not the brightest bulb in the room.

Contact Joseph Wilson at 714-463-4430 or at Wilson Tax Law Group at www.wilsontaxlaw.com.

 

 

SEE PRESS RELEASE BELOW

 

Department of Justice

U.S. Attorney’s Office

District of Massachusetts

---

FOR IMMEDIATE RELEASE

Tuesday, January 13, 2015

Chiropractor Sentenced for Bribing IRS Auditor

BOSTON – A Lowell chiropractor was sentenced today to nine months in prison for bribing an IRS agent.
Stephen Jacobs, 56, of Lowell, was sentenced to nine months in prison, two years of supervised release, and ordered to pay a $10,000 fine.  Jacobs must report to the custody of the Bureau of Prisons by Feb. 24, 2015.  In October 2014, Jacobs pleaded guilty before U.S. District Court Judge William G. Young to bribery of a public official.
In August 2013, an IRS auditor met with Jacobs, a chiropractor, to examine numerous issues with his federal income tax forms for 2011.  During the initial interview, the auditor advised Jacobs that two $5,000 payments were not allowable deductions after Jacobs admitted that each was a payment to two different women after they accused him of touching them inappropriately during medical treatments.  Jacobs told the auditor that he paid the women because he was concerned that they would report him to the police or to the chiropractic board.  Jacobs admitted that he had begun kissing one woman’s feet while he was treating her.  He also admitted to other inappropriate contact when he was giving the second woman a massage.
Jacobs asked the IRS auditor if there was anything he could do to “just deal with this…”  When the agent said he could not “just deal with this,” Jacobs became agitated and combative, ultimately threatening the agent that he would “ruin [his] career.”
The following month, after several electronically monitored discussions regarding his non-deductible expenses, Jacobs offered to bribe the auditor in exchange for terminating the examination, saying, “. . . you want a bribe? You want me to pay you?...”  The auditor, acting under the direction of law enforcement, then accepted Jacobs’s offer of $5,000 to give Jacobs a favorable audit letter showing no additional tax for one year and a small refund for the next year.  Jacobs paid the auditor $5,000 in cash for the favorable treatment.
United States Attorney Carmen M. Ortiz and Robert O’Malley, Special Agent in Charge of the Treasury Inspector General for Tax Administration, made the announcement today. The case was prosecuted by Eugenia M. Carris of Ortiz’s Public Corruption Unit

Foreign Banks Blacklisted by the IRS

As part of the IRS' billion dollar effort to combat the war on offshore tax evasion the IRS has blacklisted certain Foreign Financial Institutions or Facilitators.   Thus, anyone who has assets at these foreign banks and who fails to properly report and account for these assets will pay 50% of the offshore penalty within the IRS Offshore Voluntary Disclosure Program and have a higher chance of criminal prosecution if they do not participate in the Offshore Voluntary Disclosure Program.

Click here to view the list of bad boy foreign banks

If you want to speak to a Tax Attorney who knows the offshore and foreign asset reporting rules and ways to minimize the exposure related to these offshore activities, feel free to contact the Wilson Tax Law Group at 714-463-4430.