As of December 26, 2024, the Enforcement of BOI Reporting Is Again Temporarily Halted Due To a Nationwide Injunction

On December 24, 2004 we posted 5th Court Reinstates BOI Registry and Extends Deadline to January 13th, Where we discussed that on Monday December 23, 2024 the court reinstated the enforceability of the Corporate Transparency Act and lifted the nationwide injunction issued by the district court judge earlier this month. In so doing, the court reinstated the Jan. 1, 2025, compliance deadline for most covered businesses to report their beneficial ownership information to the Financial Crimes Enforcement Network as required by the CTA. However, due to the period when the preliminary injunction was in effect, FinCEN delayed to Jan. 13 the deadline for most businesses to file their initial beneficial ownership information

As of December 26, 2024, the Enforcement of Beneficial Ownership Information (Boy) Reporting Requirements Is Temporarily Halted Due To a Nationwide Injunction (Again).

 

This means that businesses are not required to file BOI reports with the Financial Crimes Enforcement Network (FinCEN). However, businesses can still voluntarily submit BOI reports.  

The injunction was reinstated after a panel lifted it earlier in the week. The injunction will remain in place until the court decides the case, which could include a final determination by the U.S. Supreme Court. 

Need Help Filing Your BOI Report?

     Contact the Tax Lawyers at

Marini & Associates, P.A. 

for a FREE Tax HELP Contact us at:
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or Toll Free at 888 8TAXAID (888-882-9243)

 

 

Court Authorizes John Doe Summons For Identities of U.S. Taxpayers Who Participated in the “Gig Economy” Via a Digital Platform

According to DoJ, a federal court in California entered an order on Monday authorizing the IRS to serve a John Doe summons on JustAnswer LLC, seeking information about U.S. taxpayers who were paid for answering questions as “experts” during the years 2017-2020. The IRS is seeking the records of individuals who were paid by JustAnswer, which operates a digital platform through which members of the public can pay to have questions answered by professionals such as doctors, lawyers, veterinarians, engineers and tax professionals. JustAnswer is headquartered in Covina, California.

The “gig economy” is where people earn income providing on-demand work, services or goods through a digital platform like a website or an app. 

Well-known examples of such platforms include Airbnb, Uber, Lyft, DoorDash, Etsy, Handy and TaskRabbit. The gig economy is a recent phenomenon associated with the increased prevalence of smart phones and their applications, facilitating the development of online marketplaces and platforms in which individuals can connect to obtain and offer goods and services. Digital platforms commonly serve as intermediaries, connecting sellers or service providers with customers while also processing payments. 

In the court’s order, U.S. District Judge Dolly M. Gee for the Central District of California found that there is a reasonable basis for believing that U.S. taxpayers who were paid by JustAnswer to answer questions as experts may have failed to comply with federal tax laws.

The court’s order grants the IRS permission to serve what is known as a John Doe summons on JustAnswer. There is no indication that JustAnswer has engaged in any wrongdoing in connection with its digital platform business. Rather, the IRS uses John Doe summonses to obtain information about individuals whose identities are unknown and who possibly violated internal revenue laws, such as by not reporting income they received. This John Doe summons directs JustAnswer to produce records identifying U.S. taxpayers who have used its platform to earn income, along with other documents relating to their work.

“The gig economy has grown in recent years and with it, the concern for tax compliance issues has increased,” said Deputy Assistant Attorney General David Hubbert of the Justice Department’s Tax Division. 

“This John Doe Summons Demonstrates That Working With 
The IRS We Will Use All The Tools Available To Us To
Ensure That No Matter How U.S. Taxpayers Earn Income,
They Are Properly Reporting It And Paying Their Taxes.

Those who choose to be on the forefront of the gig economy must be aware of, and abide by, all their tax obligations.”

“Like their fellow Americans who earn income through traditional means, U.S. taxpayers who earn income from digital and other platforms that comprise the gig economy need to pay their fair share of taxes,” said IRS Commissioner Danny Werfel. 

“The World Is Getting Smaller For Tax Cheats,
And We Will Work Collaboratively With Our Partners
To Vigorously Enforce The Nation’s Tax Laws.”

Federal law requires U.S. individual taxpayers to pay taxes on all income earned worldwide. Individuals must report all income earned from the gig economy on a tax return. This includes income from part-time, temporary or “side work”; income not reported on an information return form (like a Form W-2 or 1099) or other income statement; or income paid in cash, property, goods or digital assets.

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)

5th Court Reinstates BOI Registry and Extends Deadline to January 13th

On December  , 2024 we posted DOJ Files an Appeal of The Nationwide Injunction Against CTA - What To Do? where we discussed that the government filed its notice of appeal of the decision of the U.S. District Court for the Eastern District of Texas in Texas Top Cop Shop Inc. v. Garland on December 5, 2024 and now according to the ABA Banking Journal, the U.S. Court of Appeals for the Fifth Circuit on Monday December 23, 2024 reinstated the enforceability of the Corporate Transparency Act and lifted the nationwide injunction issued by the district court judge earlier this month. In so doing, the court reinstated the Jan. 1, 2025, compliance deadline for most covered businesses to report their beneficial ownership information to the Financial Crimes Enforcement Network as required by the CTA.

However, due to the period when the preliminary injunction was in effect, FinCEN delayed to Jan. 13 the deadline for most businesses to file their initial beneficial ownership information. Businesses created or registered on or after Dec. 3, 2025, will have an additional 21 days from their deadline to file. Deadlines for companies created or registered on or after Jan. 1, 2025, are unchanged. (Banks are exempt from filing, but many of their business clients are covered.)

The lawsuit in Texas was filed by the National Federation of Independent Business and several of its members. The plaintiffs argued that the CTA exceeded Congress’ authority to regulate interstate commerce, that it violates the First Amendment by compelling speech and infringing freedom of association and that it violates the Fourth Amendment by forcing the disclosure of private information.

The appeals court said the U.S. Department of Justice “made a strong showing that it is likely to succeed on the merits in defending CTA’s constitutionality,” noting that the reporting requirement fell within Congress’ broad authority under the U.S. Constitution’s Commerce Clause to regulate economic activity that would affect interstate commerce.

Still exempt from the filing deadlines are members of the National Small Business Association, in which an injunction applying to its members in a separate lawsuit remains in place. The plaintiffs in the NFIB case could seek further review from the Fifth Circuit or seek relief from the U.S. Supreme Court. Several other federal courts are actively considering CTA challenges.

According to recent poll data from Wolters Kluwer, as of mid-November, only about a quarter of the estimated 32.5 million covered businesses had registered. Thirty-seven percent of firms were waiting until closer to the deadline and 12% said they had insufficient resources to do the filing. Meanwhile, 9% of businesses believed they were not covered by the rule, and 32% were unsure whether the rule applied to them.

Need Help Filing Your BOI Report?

     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)

 

 

IRS Recovers $4.7 Billion for U.S. Taxpayers as Part of New Initiatives

According to DoJ, the Internal Revenue Service provided the regular quarterly update to the Strategic Operating Plan, outlining key milestones in criminal investigations, improvements to taxpayer services and advancements in digital modernization that have transformed agency operations while protecting billions of taxpayer dollars.

The IRS has now recovered $4.7 billion from new initiatives underway. This includes: 

• More than $1.3 billion from high-income, high-wealth individuals who have not paid overdue tax debt or filed tax returns, 
• $2.9 billion related to IRS Criminal Investigation work into tax and financial crimes, including drug trafficking, cybercrime and terrorist financing, and 
• $475 million in proceeds from criminal and civil cases attributable to whistleblower information.

The IRS also announced new results from the focus on high-income non-filers who have not filed taxes since 2017. 

The IRS Has Now Collected An Initial $292 Million
From More Than 28,000 Non-Filers, An Increase
of $120 Million Since September 2024.

These are cases where IRS has received third party information, such as through Forms W-2 and 1099s, indicating these people received income between $400,000 and $1 million or more than $1 million, but failed to file a tax return. The non-filer program ran sporadically since 2016 due to severe budget and staff limitations that did not allow these cases to be pursued. With additional funding, the IRS had the capacity to resume this core tax administration work earlier this year.

“The IRS continues to show dramatic progress on a wide array of the agency’s transformation efforts, producing real-world improvements to help taxpayers and businesses while also taking important steps in the law-enforcement and compliance arena to protect billions from ongoing schemes, ensure high-income individuals file returns and pay their taxes and penalties, and battle everything from terrorist financing to drug traffickers,” said IRS Commissioner Danny Werfel.

Assistance from whistleblowers

Whistleblowers continue to provide valuable contributions in both criminal and civil cases. Whistleblower information has led to successful criminal investigations, prosecutions and the collection of tax, fines, penalties, interest and other amounts. 

In FY24, the IRS paid awards totaling $123.5 million to whistleblowers for aiding in the collection of $474.7 million in proceeds on cases that included unreported/underreported income, hidden offshore assets, overstated deductions, general allegations of tax fraud and abusive international transactions.

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)

In Landmark Bitcoin Case Investor Gets 2 Years For Tax Fraud

On September 13, 2004, we posted Early Bitcoin Investor Pleads Guilty to Filing Tax Return that Falsely Reported His Cryptocurrency Gains, where we discussed the first public indictment of an individual who underreported the capital gains from a nearly $4 million legal sale of bitcoin and his Guilty plea on   September 12, 2024. 

Now according to Law360, Frank Richard Ahlgren III was sentenced to two years in federal prison On December 12, 2024. He was also ordered by a Texas federal court to pay more than $1 million in restitution to the Internal Revenue Service for the lost tax dollars.

The Prison Sentence Is Just Shy of The 27 Months Prosecutors Requested When They Argued In A Sentencing Memo That It Would Serve As A Needed Warning To Virtual Currency
Users It Said Were "Watching This Case."

Ahlgren was indicted in February and accused of making false returns for 2017 through 2019 and violating structuring laws. He was held without bail as a flight risk, and in September he pled guilty to filing a false return for 2017. In October of that year he sold 640 bitcoins for $5,800 each, reaping gains after buying the bitcoins two years earlier for less than $500 each.

Instead of reporting the true gains on his returns, he claimed he had bought the bitcoins in 2015 for much higher prices. While the highest amount any of the bitcoins traded for in 2015 was $495, Ahlgren claimed he had paid up to $9,400, prosecutors said in a sentencing memo.

Prosecutors also accused Ahlgren of selling bitcoins for $650,000 in 2018 and 2019 and failing to report the sales at all. From 2017 through 2019, he either underreported or didn't report the sale of $4 million worth of bitcoins, the DOJ said. He took sophisticated steps to hide the transactions on the bitcoin blockchain, or public ledger, including disguising his identity using mixers and meeting someone in person to exchange bitcoins for cash.

Ahlgren, who blogged about the virtual currency, knew how to hide transactions on bitcoin's blockchain and exploited the anonymity the system provides, prosecutors said.

"Ahlgren will serve time because he believed his cryptocurrency transactions were untraceable," Acting Special Agent in Charge Lucy Tan of an IRS criminal investigation unit in Texas said in a statement.

Stuart M. Goldberg, acting deputy assistant attorney general of the DOJ's Tax Division, said Ahlgren had earned his sentence when he lied to his accountant about the gains and failed to pay his taxes. 

Have an Unreported Crypto Currency?

 Like Your Freedom? 

  Contact the Tax Lawyers at

Marini & Associates, P.A. 

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or Toll Free at 888 8TAXAID (888-882-9243)

FINCEN Advises That Entities Are Not Currently Required to File BOI Reports

In an Alert entitled "Impact of Ongoing Litigation – Deadlines Stay – Voluntary Submissions Only FinCEN has stated that:

In light of a recent federal court order, reporting companies are not currently required to file beneficial ownership information with FinCEN and are not subject to liability if they fail to do so while the order remains in force. However, reporting companies may continue to voluntarily submit beneficial ownership information reports.

The Corporate Transparency Act (CTA) plays a vital role in protecting the U.S. and international financial systems, as well as people across the country, from illicit finance threats like terrorist financing, drug trafficking, and money laundering.  The CTA levels the playing field for tens of millions of law-abiding small businesses across the United States and makes it harder for bad actors to exploit loopholes in order to gain an unfair advantage.

On Tuesday, December 3, 2024, in the case of Texas Top Cop Shop, Inc., et al. v. Garland, et al., No. 4:24-cv-00478 (E.D. Tex.), a federal district court in the Eastern District of Texas, Sherman Division, issued an order granting a nationwide preliminary injunction that: (1) enjoins the CTA, including enforcement of that statute and regulations implementing its beneficial ownership information reporting requirements, and, specifically, (2) stays all deadlines to comply with the CTA’s reporting requirements. The Department of Justice, on behalf of the Department of the Treasury, filed a Notice of Appeal on December 5, 2024.

Texas Top Cop Shop is only one of several cases in which plaintiffs have challenged the CTA that are pending before courts around the country. Several district courts have denied requests to enjoin the CTA, ruling in favor of the Department of the Treasury. The government continues to believe—consistent with the conclusions of the U.S. District Courts for the Eastern District of Virginia and the District of Oregon—that the CTA is constitutional.

While this litigation is ongoing, FinCEN will comply with the order issued by the U.S. District Court for the Eastern District of Texas for as long as it remains in effect. Therefore, reporting companies are not currently required to file their beneficial ownership information with FinCEN and will not be subject to liability if they fail to do so while the preliminary injunction remains in effect. Nevertheless, reporting companies may continue to voluntarily submit beneficial ownership information reports.

Need Help Filing Your BOI Report?

     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)

 

IRS Criminal Investigation Release It's 2024 Report Boasting A 90% Conviction Rate

The Internal Revenue Service Criminal Investigation (IRS-CI) released its Fiscal Year 2024 (FY24) Annual Report today that details significant cases involving crimes ranging from tax fraud to cybercrime, enhanced domestic and foreign partnerships and investigative statistics from FY24 that took place from Oct. 1, 2023, to Sept. 30, 2024.

This year’s report highlights several firsts for the agency:

• the first sentencings tied to syndicated conservation easement schemes, 
• the first indictment and guilty plea of a U.S. taxpayer solely for not paying taxes on gains from cryptocurrency sales, 
• the first time Treasury agencies have led a task force and public outreach series to combat fentanyl trafficking, and 
• a historic financial settlement by the world’s largest cryptocurrency exchange for violating anti-money laundering and sanctions laws.

In FY24, IRS-CI initiated more than 2,667 criminal investigations, obtained 1,571 convictions, and reclaimed its 90% conviction rate. The agency’s investigative work identified over $9.1 billion in fraud from tax and financial crimes, obtained court orders totaling $1.7 billion in restitution to the IRS and seized criminal assets totaling approximately $1.2 billion.

Other significant items in this year’s annual report include:

• IRS-CI extended the agency’s international footprint by launching a new attaché post in Nassau, Bahamas, and a Cyber attaché post in Singapore.
• The International Training Team delivered more than 30 trainings to over 930 participants from more than 70 countries. These trainings play a critical role in global partnerships and investigations.
• Combatting cybercrime continued to be a focus for the agency. In FY24 alone, IRS-CI initiated 111 new cybercrime investigations, and defendants in these cases continue to receive prison sentences averaging more than five years.

The report also includes case examples for each U.S. field office, details about the specialized services provided by IRS-CI, and additional statistics about the agency for FY24.

IRS-CI is the law enforcement arm of the IRS, responsible for conducting financial crime investigations, including tax fraud, narcotics trafficking, money laundering, public corruption, healthcare fraud, identity theft and more. IRS-CI special agents are the only federal law enforcement agents with investigative jurisdiction over violations of the Internal Revenue Code. The agency has 20 field offices located across the U.S. and 14 attaché posts abroad.

Have an IR Criminal Tax Problem?

 Like Your Freedom? 

  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)