Wednesday, June 30, 2021

IRS ‘Dirty Dozen’ List Warns People About Offer in Compromise ‘Mills’ - Call M&A for Real & Experience Tax Attorneys!

WASHINGTON – The Internal Revenue Service continued its “Dirty Dozen” tax scams with a warning for people to watch out for predators using tax-related schemes ranging from fake charities to scams targeting seniors and immigrants.

The IRS continues to see a group of ruses by dishonest people who trick others into doing something illegal or which ultimately causes them harm. Predators encourage otherwise honest people to do things they don’t realize are illegal or prey on their good will to take something from them.

Here are five of this year’s “Dirty Dozen” scams. 1. Fake charities, 2. Immigrant/senior fraud 3. Seniors beware, 4. Offer In Compromise ‘Mills’ and 5. Unscrupulous Tax Return Preparers. 

Offer In Compromise ‘Mills’ 

Offer in Compromise mills contort the IRS program into something it’s not – misleading people with no chance of meeting the requirements while charging excessive fees, often thousands of dollars.

“We’re Increasingly Concerned That People Having Trouble Paying Their Taxes Are Being Duped Into Misleading Claims About Settling Their Tax Debts For ‘Pennies On The Dollar’,” Said IRS Commissioner Chuck Rettig. 

The IRS urges people to take a few minutes to review information on to see if they might be a good candidate for the program and Avoid Costly Promoters Who Advertise On Radio And Television.”

The IRS Reminds Taxpayers To Beware Of Promoters Claiming Their Services Are Needed To Settle With The IRS, That Their Tax Debts Can Be Settled For “Pennies On The Dollar” 
or That There Is A Limited Window Of Time To Resolve Tax Debts Through (OIC).

An “offer,” or OIC, is an agreement between a taxpayer and the IRS that resolves the taxpayer's tax debt. The IRS has the authority to settle, or "compromise," federal tax liabilities by accepting less than full payment under certain circumstances. However, some promoters are inappropriately advising indebted taxpayers to file an OIC application with the IRS, even though the promoters know the person won’t qualify. This costs honest taxpayers money and time.

Taxpayers should be especially wary of promoters who claim they can obtain larger offer settlements than others or who make misleading promises that the IRS will accept an offer for a small percentage. 

Companies Advertising On TV Or Radio
Frequently Can’t Do Anything For Taxpayers ...

For more information about Tax Relief Companies see the information on fake charity scams on the Federal Trade Commission web site detailing how Tax relief companies use the radio, television and the internet to advertise help for taxpayers in distress. If you pay them an upfront fee, which can be thousands of dollars, these companies claim they can reduce or even eliminate your tax debts and stop back-tax collection by applying for legitimate IRS hardship programs. 

The truth is that most taxpayers don't qualify for the programs these fraudsters hawk, their companies don't settle the tax debt, and in many cases don't even send the necessary paperwork to the IRS requesting participation in the programs that were mentioned. Adding insult to injury, some of these companies don't provide refunds, and leave people even further in debt.

The majority of tax settlement companies charge their clients an initial fee that can easily run anywhere between $3,000 to $6,000, depending on the size of the tax bill and proposed settlement. In most cases, this fee is completely nonrefundable. This fee quite often mysteriously mirrors the amount of free cash the client has available. This is generally the amount of cash the company says it will save the client in tax payments.

Clients have also complained to the Better Business Bureau (BBB) and the Federal Trade Commission (FTC) that some of these firms have not produced any of the promised results and, in fact, the organization was a scam. Many firms also materially misrepresent their fees to clients, perhaps charging them initially with a lower fee before coming back for more once they are deeply involved in the process.

Have a Tax Problem?    

Real Tax Problems Require
Real Tax Attorneys!

Contact the Tax Lawyers at 
Marini & Associates, P.A. 

 for a FREE Tax Consultation Contact US at
or Toll Free at 888-8TaxAid (888 882-9243).

IRS Announces ‘Dirty Dozen’ Tax Scams for 2021

The Internal Revenue Service today began its "Dirty Dozen" list for 2021 with a warning for taxpayers, tax professionals and financial institutions to be on the lookout for these 12 nefarious schemes and scams.

This year's "Dirty Dozen" will be separated into four separate categories:

  • pandemic-related scams like Economic Impact Payment theft;
  • personal information cons including phishing, ransomware and phone "vishing;"
  • ruses focusing on unsuspecting victims like fake charities and senior/immigrant fraud; and
  • schemes that persuade taxpayers into unscrupulous actions such as Offer In Compromise mills and syndicated conservation easements.

The agency compiled the list into these categories based on who perpetuates the schemes and who they impact. In addition to today's scams the IRS will highlight the other schemes over the next three days.

The IRS urges all taxpayers to be on guard, especially during the pandemic, not only for themselves, but also for other people in their lives.

"We continue to see scam artists use the pandemic to steal money and information from honest taxpayers in a time of crisis," said IRS Commissioner Chuck Rettig. "We provide this list to alert taxpayers about common scams that fraudsters use against their victims. At the IRS, we are dedicated to stopping these criminals, but it's up to all of us to remain vigilant to protect ourselves and our families."

Taxpayers are encouraged to review the "Dirty Dozen: list in a special section on and should be alert to these scams during tax filing season and throughout the year.

Economic Impact Payment theft

A continuing threat to individuals is from identity thieves who try to steal Economic Impact Payments (EIPs), also known as stimulus payments.

Taxpayers should remember that the IRS website,, is the agency's official website for information on payments, refunds and other tax information.

Unemployment fraud leading to inaccurate taxpayer 1099-Gs

Because of the COVID-19 pandemic, many taxpayers lost their jobs and received unemployment compensation from their state. However, scammers also took advantage of the pandemic by filing fraudulent claims for unemployment compensation using stolen personal information of individuals who had not filed claims. Payments made on these fraudulent claims went to the identity thieves.

The IRS reminds taxpayers to be on the lookout for receiving a Form 1099-G reporting unemployment compensation that they didn't receive.

Additional protection to help protect taxpayers

IRS makes IP PINs available to all taxpayers – adding another layer of security

To help taxpayers avoid identity theft, the IRS this year made its Identity Protection PIN (IP PIN) program available to all taxpayers. Previously it was available only to victims of ID theft or taxpayers in certain states. The IP PIN is a six-digit code known only to the taxpayer and to the IRS. It helps prevent identity thieves from filing fraudulent tax returns using a taxpayer's personally identifiable information.

Using an IP PIN is, in essence, a way to lock a tax account. The IP PIN serves as the key to opening that account. Electronic returns that do not contain the correct IP PIN will be rejected and paper returns will go through additional scrutiny for fraud.

Reducing fraud

The IRS and its Security Summit partners in the states and the private-sector tax community have made changes to help reduce identity theft-related refund fraud that are noticeable to the average person filing a return.

Multi-factor authentication can help

It is important for taxpayers filing in 2021 to know that online tax software products available to both taxpayers and tax professionals will contain options for multi-factor authentication. Multi-factor authentication allows users to better protect online accounts. One way this is accomplished is by requiring a security code sent to a mobile phone in addition to the username and password used to access the account.

Have a Tax Problem?    

Contact the Tax Lawyers at 
Marini & Associates, P.A. 

 for a FREE Tax Consultation Contact US at
or Toll Free at 888-8TaxAid (888 882-9243).

LB&I Extends Document Request Enforcement Suspension Through Sept. 30

In a memo LB&I-04-0621-0005 (6/16/2021)the IRS's Large Business & International division (LB&I) has said it is extending the suspension of information document request (IDR) enforcement procedures through September 30, 2021, and that other exam activities will continue under normal procedures (with some exceptions) through September 30, 2021. An IDR is issued on IRS Form 4564, Department of the Treasury/Internal Revenue Service Information Document Request. It is a form that the IRS uses during a tax audit to request information from the taxpayer.

  • In March 2020, LB&I said that IDR enforcement procedures would be suspended through July 15, 2020. (IRS memo: Approval for Deviation from IDR Process and Enforcement Control Number: LB&I-04-0320-0007 (3/25/2020))
  • In April 2020, LB&I clarified its compliance priorities for the period ending July 15, 2020. Generally, LB&I would not begin new return examinations before July 15, 2020. However, LB&I managers had the discretion to open an examination into prior year, subsequent year and related returns associated with an existing examination. 
  • In a December 2020 memo, LB&I said it was extending, in general, the suspension of IDR enforcement procedures through June 30, 2021.

In addition, in general, the LB&I exam activities would continue under normal procedures (with some exceptions) through June 30, 2021 "and thereafter." Exceptions to this rule were:

  1. Appointments (whether in person or virtual) could be scheduled depending upon the facts and circumstances of the taxpayer. While in-person contact was allowed, IRS would continue to support performing its work virtually to accommodate its employees or taxpayers who may have concerns with in-person contact, which may require the need for statue extensions. Virtual appointments would continue to be conducted by WebEx or teleconference. 
  2. The hold on new Discriminate Analysis Score (DAS, a computer model the IRS uses to score examination potential for corporate returns with total assets of $10 million or more) cases would continue. IRS managers would have discretion in approving prior, subsequent, and related returns associated with an existing DAS examination.
The IRS has extended the guidance in the December 2020 memo through September 30, 2021. While the December 2020 memo said that the LB&I exam activities would continue under normal procedures (with some exceptions) through June 30, 2021 "and thereafter," the new memo says that the LB&I exam activities will continue under normal procedures (with some exceptions) through September 30, 2021. It deletes the "and thereafter" language.

This memo extends the approval period to deviate from IDR enforcement procedures and applies to the IDR enforcement process for taxpayers who are unable, due to the COVID-19 pandemic, to respond timely to an IDR. Notwithstanding this deviation, managers retain the discretion to continue with the IDR enforcement process when in their judgment the interests of tax administration warrant, for example cases with short statues or fraud development. 

Have IRS Tax Problems?

 Contact the Tax Lawyers at
Marini & Associates, P.A. 

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

Tuesday, June 29, 2021

Understanding IRS Tax Audits - Part II

 On June 22, 2018 we posted Understanding IRS Tax Audits - Part I where we discussed that careful advance preparation can help reduce the scope of a tax audit or examination and can lead to a more favorable outcome. Although a thorough understanding of the underlying facts and applicable law is a must, understanding IRS procedures is critical to preserving a taxpayer’s rights.

Understanding IRS Tax Audits - Part II

We have summarize below and in Parts I & III some of the more important IRS procedural rules and guidelines governing civil IRS examinations and audits, including: how returns are selected for examination; a brief description of the types of civil examinations; an explanation of the tools available to IRS examining agents and revenue agents; dispositions in IRS audits or examinations and, if necessary, where to seek relief from an unfavorable result in an examination or audit.

Interacting with the IRS Agent

When possible, the taxpayer’s representative, not the taxpayer, should interact with the agent. Indeed, in most cases, the meetings should take place at the representative’s office, not the taxpayer’s place of business. Direct contact between the agent and the taxpayer (or taxpayer’s employees) should be minimized. Agents are trained in interviewing techniques designed to elicit information. They will ask open ended questions, and will listen carefully to the responses. Taxpayers who meet with an agent should be careful to answer only the question asked.

Absent having been served an administrative summons, a taxpayer has the right to refuse to be interviewed. Although, historically examining agents have been reluctant to press for taxpayer interviews, examining agents have become more aggressive in seeking taxpayer interviews and using summonses to compel them. If interviewed pursuant to a summons or otherwise, the taxpayer has a right to counsel and may assert appropriate privileges.

Care should be taken to create a complete record of all information provided to the examining agent. Maintain a detailed record of all documents and records provided to the examining agent. Maintain a record of any oral communication with the agent whether in person or by telephone. Confirm any material oral agreements in writing.
How Agents Gather Information
During the examination, the agent may request various types of documentation to verify items of income and expense on the return, including records, such as receipts, invoices, books, and worksheets. Revenue agents may also review prior or subsequent tax returns or the returns of related taxpayers.

Generally, agents have broad powers to compel production of relevant information. Nevertheless, certain types of information may be subject to privilege or otherwise not subject to compelled production. Once provided, the privilege is likely to have been waived. For example, an agent may ask to see invoices to substantiate a deduction claimed for professional services, such as accounting or legal fees. The descriptions of the services provided could contain information leading to another adjustment. If the descriptions of the services may be privileged, the taxpayer may be able to withhold the actual invoices in favor of some other proof of payment, or may be able to provide redacted invoices.

There has been much discussion about whether tax work papers can be so compelled. Tax work papers prepared in connection with the preparation of the tax return can be reviewed. However, audit accrual work papers, which may reflect opinions and estimates related to questionable items on the return, present a more complex question. Agents are cautioned in the Internal Revenue Manual to exercise restraint in this area, but the Service is becoming more aggressive, particularly where listed transactions are involved.

Keep in mind that the taxpayer’s books and records may contain confidential information of another taxpayer, such as IP or the terms of a contract. The taxpayer may be under a contractual obligation to keep this information confidential. If the agent can not be convinced to accept redacted documents, the taxpayer may want to decline to produce the document unless an administrative summons is issued compelling its disclosure.

An agent will typically request documents and other information by issuing an Information Document Request (Form 4564). Initial requests at the beginning of an examination are typically fairly broad with subsequent requests focusing on specific issues. Keep careful track of IDR requests and items produced. Always maintain a duplicate copy of any documents that are provided and include a transmittal letter with any response describing the documents produced.

If a taxpayer fails to produce requested items, the Service can summons a taxpayer or third party for books, records or testimony. Agents are directed to make an attempt to obtain information informally before issuing a summons. Agents are instructed to consider issuing a summons when a taxpayer fails to make requested records available within a reasonable period of time; where the records submitted are known or suspected to be incomplete and the examining agent believes that additional records containing relevant and material matter may be in the possession of the taxpayer or a third party; and when the examining agent is in doubt as to the availability of pertinent records and wishes to obtain oral testimony as to what records may exist and their location.

When an administrative summons is issued, the summoned person must personally appear at the time and place specified with any requested items. The summoned person has the right to counsel, the right to assert the attorney-client privilege, and the right to raise the self-incrimination privilege under the 5th Amendment. The IRS can issue administrative summonses to third parties believed to hold relevant information. Notice of summons issued to a third party must be given to the taxpayer within 3 days of the date on which service is made to the third party and no less than 23 days before the summons return date. This is to allow the taxpayer sufficient time to file a petition to quash.
If a summoned party ignores the summons or otherwise fails to fully comply, the Service may bring legal proceedings to enforce the summons in federal district court. A court will generally enforce a summons if there is a legitimate purpose for the examination; the information demanded may be relevant to that purpose; the information is not already in the possession of the Service; the information or document is not privileged and the Service has complied with the applicable administrative requirements of the Code and regulations.

To be continued... Understanding IRS Tax Audits - Part III

Have a IRS Tax Problem? 

Contact the Tax Lawyers at 
Marini& Associates, P.A. 
for FREE Tax HELP Contact Us at:
Toll Free at 888-8TaxAid (888) 882-9243

Advice For Attorneys - Using Your IOTA Trust Account to Hide Your Personal Income Is Not Tax Planning, It's Tax Evasion!

According to the DoJ, a Texas attorney and former member of the Idaho legislature, John O. Green, and his client, Texas inventor Thomas Selgas, were sentenced yesterday for conspiracy to defraud the United States and tax evasion. 

Selgas Was Sentenced To 18 Months In Prison And Green To 6 Months.

Selgas and Green were convicted by a jury in Federal District Court in Dallas on Jan. 15, 2020. According to the evidence presented at trial, Selgas conspired with Green, an attorney licensed to practice in Texas, to defraud the United States by obstructing the IRS’s efforts to assess and collect Selgas’s taxes. 

Selgas and his wife owed approximately $1.1 million in taxes that Selgas refused to pay. When the IRS sought to collect those taxes, Selgas concealed, with the assistance of Green, substantial funds by using Green’s Interest on Lawyers Trust Account (IOLTA) rather than using financial accounts in Selgas’s own name. 

An IOLTA is an escrow bank account used by a lawyer to hold money in trust for clients. 

From 2007 to 2017, Selgas deposited proceeds from the sale of gold coins and other income into Green’s IOLTA. At the direction of Selgas, Green would then use that escrow account to pay the personal expenses of Selgas and his wife, including their credit card bills. 

This use of the IOLTA concealed Selgas’s income from the IRS and thwarted its ability to identify funds he possessed, which could be used to offset the taxes owed. 

Selgas and Green also filed a false tax return on behalf of MyMail Ltd., an intellectual property development and licensing partnership Selgas co-founded, omitting a substantial portion of the partnership’s actual income. 

In addition to the term of imprisonment, U.S. District Judge Karen Gren Scholer ordered Selgas to serve three (3) years of supervised release and to pay approximately $1,323,776.92 in restitution to the United States. 

Judge Scholer ordered Green to serve three (3) years of supervised release and to pay approximately $679,501.50 in restitution to the United States. 

Have a Criminal Tax Problem?

Value Your Freedom?

Contact the Tax Lawyers at
Marini & Associates, P.A. 
 for a FREE Tax Consultation Contact US at or
or Toll Free at 888-8TaxAid (888 882-9243)

Friday, June 25, 2021

Your Bigger & Better IRS! - With MORE Enforcement in 2022!

The IRS has released details of its fiscal year 2022 (FY 2022) budget request. The request is for $13.16 billion, which is $1.24 billion (10.4%) more than the FY 2021 enacted level of $11.92 billion.

The request includes the following:

  1. Putting taxpayers first. ($176.09 million and an additional 294 full time employees (FTE)) This investment includes: $27 million to add increased security and flexibilities to how the IRS identity proofs and authenticates taxpayers to allow secure access to taxpayer online services such as Identity Protection (IP) PINs in accordance with National Institute of Standards and Technology (NIST) standards; and $149.09 million to develop and implement a Taxpayer Experience Strategy to improve the American taxpayer's experience with the IRS through expanded digital services, increased multilingual services, and an increased presence in hard to reach communities.

  2. Ensure fairness of the tax system. ($340.27 million, +1,833 FTE) Highlights of this investment include:

    • $154.87 million to increase the audit coverage rate of large corporations (with balance sheet assets > $10 million), pass through entities, and high wealth individuals with adjusted gross income of more than $10 million. Currently, this audit rate is half of what it was in FY 2010-2010;
    • $41.09 million to expand oversight of cyber-crimes and allow for applied data analytics which IRS can leverage to connect the most remote financial transaction between apparent disparate actors which can be the key piece of evidence to break open the most complex financial investigation;
    • $13.47 million to enhance taxpayer confidence in the tax-exempt sector which is essential to preserving and protecting charitable tax deductions and the retirement savings of everyday Americans;
    • $32.90 million to addresses pre-refund audit coverage;
    • $77.06 million for additional examination and collection employees to increase the individual audit and collection coverage rates; and
    • $20.87 million to enhance overall enforcement efforts, increase the number of convictions and expand the IRS's capabilities in core tax enforcement areas.

    3. Improve live assistance. ($318 million, +4,203 FTE).

    4. IT modernization. ($78.14 million, +18 FTE).

    5. Electrical vehicles. ($2.96 million, +0 FTE).

Have a IRS Tax Problem?

Like Your Freedom?

 Contact the Tax Lawyers at
Marini & Associates, P.A. 

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

US District Court Reinstates EB-5 Investment Amount to $500,000

On December 9, 2009 we posted EB-5 Investments Increased to $900,000 and $1.8 Million Starting November 21, 2019, where we discussed that the Final Rule was scheduled to be published on Wednesday, July 24, 2019, in the Federal Register is set to raise investment amounts for the EB-5 program from $500,000 to $900,000 for TEA investments and $1 million to $1.8 million for non-TEA investments. Other major program changes include the centralization of TEA's in the Department of Homeland Security (DHS) and a clarification of procedures for removing conditions on permanent residence. This is the first significant revision to the EB-5 program's regulations since 1993.

Now according to CBI The US District Court for the Northern District of California has ruled that Former Acting Homeland Security Secretary Kevin McAleenan was not following correct procedures while serving in his position under the Federal Vacancies Reform Act when he introduced the EB-5 Modernization Final Rule, and accordingly the Court has ruled that the new regulations which took effect on 21 November 2019 must be “set aside”. US Magistrate Judge Jacqueline Scott Corley made the ruling on June 22, 2021, in the case of Behring Regional Center LLC V. Chad Wolf, et al. 

She Also Ruled That The Ratification of The EB-5 Modernization Final Rule By Current Secretary Of Homeland Security Alejandro Mayorkas in March 2021 Did Not Fix The Fault Arising From McAleenan’s Improper Appointment.

The court declined to address the current US government’s request for a stay of action and remanded the matter to the Department of Homeland Security. The court stated: 

“While There Would Certainly Be Some Disruption
If The Rule Is Vacated Given The Length of Time
The Rule Has Been In Effect, The Government Has
Made No Specific Showing of Harm Beyond
Asserting That It Would Be ‘Extraordinarily Disruptive’.”

On the other hand, the court also declined to grant the Plaintiff’s injunction barring USCIS (US Citizenship and Immigration Services) from reinstating the EB-5 Modernization Rule absent compliance with the rule-making process governed by the Administrative Procedures Act. 

It is possible that USCIS will appeal the decision to the 9th Circuit Court of Appeals. It is also likely that Secretary Mayorkas will now seek to finalise the EB-5 Modernization Rule, but until then the old minimum investment amounts apply and revert back to $500,000 if in a Targeted Employment Area (TEA), otherwise $1m, and Targeted Employment Area standards go back to pre-November 2019.

You can view the case judgment HERE

Coming to America?
Need Pre-Immigration Tax Advice?
  Contact the Tax Lawyers at
Marini & Associates, P.A. 

 for a FREE Tax Consultation Contact US at or
or Toll Free at 888-8TaxAid (888 882-9243).