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Tax Fraud Archives

Federal judge finds Sam Wyly knew system of tax shelters was improper

The latest chapter in a years-long legal saga between the IRS, the SEC, and once-prominent businessman Sam Wyly (and the estate of his late brother Charles) came this week in the form of a 459-page verdict from U.S. Bankruptcy Judge Barbara Houser. The Court found that there is "clear and convincing evidence" that Sam and Charles Wyly knew that their extremely complex and convoluted system of offshore trusts and shell corporations was designed for the sole purpose of hiding profits and other business transactions from the IRS to avoid paying taxes.

Avoiding tax fraud by return preparers: be sure to review the return

The IRS comes out every year with a list of tax schemes it seeks to warn people about. It goes by the rather melodramatic name of "the dirty dozen." But it is instructive to review which topics the agency chooses to include. One of them is what the IRS calls "return preparer fraud."

Identity theft victims and tax refunds: IRS still warning of delays

Identity theft that leads to tax refund fraud has been a significant problem for quite some time. The IRS says it is working on the issue. In our December 3 post we wrote about the agency's intention to use new software filters to do a better job at flagging fraudulent tax returns that are the product of identity theft.

IRS disciplines tax preparer for alleged tax fraud

The IRS is tightening its regulation of professional tax preparers. The new requirements overseen by the agency start with an electronic registration system in which each preparer must apply for or new a Preparer Tax Identification Number or PTIN. But they also include other components, such as competency testing and continuing professional education.

Tax fraud charges and sufficiency of the evidence

The IRS doesn't always get it right - and neither do federal prosecutors who bring charges of tax fraud. Fortunately, taxpayers or tax professionals accused of wrongdoing have the right defend themselves against criminal tax evasion charges.

Identity thieves mimic IRS to capture taxpayer information

Taxpayers in Southern California may dread receiving communications from the Internal Revenue Service because they often contain the announcement of an audit or a tax deficiency. But people here and around the country have a new reason to be wary of potential communications from the IRS: identity theft.

Tax fraud and identity theft could be higher than suspected

In the past few months, we have talked a few times about the rise in taxpayer identity theft that has been behind a growing wave of tax fraud across the country. While nearly everyone has acknowledged that this is a grave problem, a recently released report from the Treasury Inspector General for Tax Administration says that it could be much worse than people had first thought.

California FTB to focus on falsely claimed tax credits

When filing a federal or a California income tax return, people are always on the hunt for deductions and credits that can reduce their tax liability. While deductions are useful, credits are even more valuable because they reduce a person's tax owed dollar for dollar. Some credits are even refundable, meaning the taxpayer will get money back if the credits exceed a person's tax liability. California and the federal government offer a wide variety of credits designed to create incentives for certain taxpayer behavior while others are meant to help lower-income individuals.