|
|
|
IRS offers guidance on tax preparer penalties
Lawyer News |
2008/01/03 14:02
|
The U.S. Internal Revenue Service has issued temporary guidance about tax return preparer penalties until the agency completes an overhaul of the regulations later this year. The notice, issued by the IRS on Monday, provides guidance about the standards of conduct that must be met by a tax return preparer to avoid a penalty for an understatement of tax that may result from a position taken on a tax return. "It is important to note that the regulations expected to be finalized in 2008 may be substantially different from the rules described in this notice, and in some cases more stringent," the IRS notice said. The IRS guidance applies to large companies such as Jackson Hewitt Tax Service and H&R Block Inc as well as to private attorneys and accountants who prepare tax returns. A tax preparer may rely in good faith upon information furnished by the taxpayer or another adviser or third party, and is not required to independently verify or review the items reported on tax returns to determine if they are likely to be upheld if challenged by the IRS, the agency said. However, the tax return preparer must make "reasonable inquiries" if the information appears to be incorrect or incomplete, it said. The IRS notice also asked accountants, industry groups, consumer groups and the public to submit comments by March 24 on how the agency should define "tax return preparer" in its overhaul of regulations. |
|
|
|
|
|
Rabbi, 5 Others Plead Not Guilty To Tax Fraud
Lawyer News |
2007/12/30 23:55
|
The leader of an Orthodox Jewish sect and five other men accused of tax fraud and money laundering pleaded not guilty Monday in U.S. District Court in downtown Los Angeles.
Brooklyn, N.Y., resident Naftali Tzi Weisz, the 59-year-old Grand Rabbi of Spinka, was indicted by a federal grand jury Dec. 18 for allegedly taking part in a scheme that cheated the Internal Revenue Service out of at least $33 million in donations to Spinka charities.
Spinka is the name of a Hasidic sect within Orthodox Judaism. The group is named for the European town along the border of Romania and Hungary where it originated.
The six men were accompanied in court by their attorneys and about five supporters at this morning's hearing before U.S. Magistrate Judge Alicia Rosenberg.
Their trial is scheduled for Feb. 12.
According to the indictment, donors to Spinka charities were paid illegal kickbacks, refunding up to 95 percent of the donations, which were laundered through the Israel-based Mizrahi Bank and businesses in downtown Los Angeles' jewelry district.
The donors then claimed a tax deduction on the full amount, prosecutors said.
Weisz is currently free on $2 million bond.
Other named defendants are Gabbai Moshe Zigelman, 60, also of Brooklyn, N.Y.; Joseph Roth, 66, of Tel Aviv, Israel; Yaacov Zeivald, 43, of Valley Village; Los Angeles residents Alan Jay Friedman, 43, and Yosef Nachum Naiman, 55; as well as five Spinka charities.
All six men face lengthy terms in federal prison if convicted on all charges.
Zigelman and the other defendants are free on bond except for Roth, an assistant manager at Mizrahi Bank, who remains in custody. On Friday, U.S. Magistrate Judge Stephen Tillman granted Roth $1.9 million bond, but stayed his decision so prosecutors could appeal it to another judge. |
|
|
|
|
|
IRS says Fedex owes $319 mln in back taxes
Lawyer News |
2007/12/22 15:06
|
Fedex Corp said on Friday that the U.S. Internal Revenue Service found that its FedEx Ground independent contractors should be reclassified as employees for tax purposes and that the company faced related taxes and penalties of more than $319 million for 2002. The IRS is auditing similar issues for 2004 through 2006, the package delivery company said in the filing with the U.S. Securities and Exchange Commission. "Given the preliminary status of this matter, we cannot yet determine the amount or a reasonable range of potential loss. However, we do not believe that any loss is probable," Fedex said in the filing. The International Brotherhood of Teamsters, which has asserted FedEx Ground workers are in fact employees and which is campaigning to unionize FedEx Ground drivers, welcomed the IRS decision. "It's game over for FedEx's independent contractor scam," union President Jim Hoffa said in a statement. The union said penalties against FedEx could eventually top $1 billion, since the current penalty only covers the year 2002. FedEx said that it has "strong defenses to the IRS's tentative assessment and will vigorously defend" its position that FedEx Ground's owner-operators are independent contractors. The filing came a day after Memphis, Tenn.-based FedEx warned that it faces "increase regulatory and legal uncertainty" over the independent contractor model it uses at FedEx Ground, which could result in higher costs.. FedEx Ground uses 15,000 drivers who are paid as independent contractors. Under this system, FedEx Ground drivers can own multiple routes, employing other drivers to deliver packages. Investors like the model because it helps FedEx save money and compete against main rival United Parcel Service Inc and its unionized work force. |
|
|
|
|
|
IRS says Fedex owes $319 mln in back taxes
Lawyer News |
2007/12/22 15:06
|
Fedex Corp said on Friday that the U.S. Internal Revenue Service found that its FedEx Ground independent contractors should be reclassified as employees for tax purposes and that the company faced related taxes and penalties of more than $319 million for 2002. The IRS is auditing similar issues for 2004 through 2006, the package delivery company said in the filing with the U.S. Securities and Exchange Commission. "Given the preliminary status of this matter, we cannot yet determine the amount or a reasonable range of potential loss. However, we do not believe that any loss is probable," Fedex said in the filing. The International Brotherhood of Teamsters, which has asserted FedEx Ground workers are in fact employees and which is campaigning to unionize FedEx Ground drivers, welcomed the IRS decision. "It's game over for FedEx's independent contractor scam," union President Jim Hoffa said in a statement. The union said penalties against FedEx could eventually top $1 billion, since the current penalty only covers the year 2002. FedEx said that it has "strong defenses to the IRS's tentative assessment and will vigorously defend" its position that FedEx Ground's owner-operators are independent contractors. The filing came a day after Memphis, Tenn.-based FedEx warned that it faces "increase regulatory and legal uncertainty" over the independent contractor model it uses at FedEx Ground, which could result in higher costs.. FedEx Ground uses 15,000 drivers who are paid as independent contractors. Under this system, FedEx Ground drivers can own multiple routes, employing other drivers to deliver packages. Investors like the model because it helps FedEx save money and compete against main rival United Parcel Service Inc and its unionized work force. |
|
|
|
|
|
IRS warns of abusive tax scheme
Lawyer News |
2007/12/18 10:39
|
The IRS is warning taxpayers about the emergence of a tax scheme related to the Telephone Excise Tax Refund that individuals were allowed to request on their 2006 tax returns.
IRS Spokeswoman Dee Harris said some unscrupulous tax-return preparers are advising their clients to file tax returns requesting much more in Telephone Excise Refunds than they're entitled to.
The problem with erroneous filings has been on the increase as other well-meaning individuals have perpetuated the problem by passing on this bad advice to friends and neighbors. Some of the erroneous refund requests appear to be for the entire amount of the phone bill, rather than just the 3 percent tax charged on long-distance services.
The IRS is urging taxpayers to follow procedures described on the IRS Web site at IRS.gov to make accurate requests for the one-time telephone excise tax refund. The service is taking steps to prevent abuse by tax preparers.
The IRS has monitored telephone excise tax refund requests for potential problems since taxpayers began submitting their 2006 tax returns in January 2007.
Taxpayers who request more of a refund than they are entitled to receive will have their refunds held and they may be subject to an audit.
If you think you have been a victim of a tax scam, you should immediately:
File an amended tax return to reverse each false return filed.
Be prepared to pay back any refund you received as a result of a false return, plus penalties and interest.
Return scam-related refund checks that you have not cashed to the IRS immediately.
Harris said the IRS reminds all taxpayers to avoid any tax preparer who claims to know about "secret" tax breaks or loopholes.If you have any doubt as the legality of any tax deduction, credit or refund claim, contact the IRS before you use it. Knowingly filing a false federal tax return can lead to civil penalties or, in some cases, to criminal charges.
|
|
|
|
|
|
Kid-Care founders settle debt with IRS
Lawyer News |
2007/12/15 10:44
|
The Internal Revenue Service has settled a claim against the founders of Houston's Kid-Care for about $1,000 — a tiny fraction of the hundreds of thousands that Texas Attorney General Greg Abbott claimed the couple had stolen from the charity. The agreement, dated Nov. 7, says Carol Porter owes $938.93 in unpaid taxes from 2001 and 2002, while her husband, Hurt Porter, owes $37 from 2002. The document stipulates that the Porters have not acknowledged any improper expenditures. In a lawsuit filed in April 2003, Abbott said the Porters had used some of the charity's funds for personal expenses such as airline trips and lavish meals. Abbott settled the case with the Porters' insurance company for $495,000 in August 2004. Abbott's investigation identified almost $500,000 in questionable expenses the Porters billed to Kid-Care's credit cards from 1999 through 2002. The IRS case involves the Porters' tax returns from 2001, 2002 and 2003. "The expenses laid out by the attorney general seemed to be the same expenses that the IRS was questioning," said Juan Vasquez, a tax attorney who represented the Porters. |
|
|
|
|
Recent Lawyer News Updates |
|
|