Financial fraud, especially targeting seniors, is on the rise, with scams causing over $3.4 billion in losses in 2023. Scammers now take the time to cultivate relationships with potential victims to convince them of needing help. The IRS has announced a second Employee Retention Credit (ERC) voluntary disclosure program for businesses to repay money received in error, with over 460 criminal investigations initiated in connection with ERC claims. The Earned Income Tax Credit (EITC) has been shown to reduce crime rates, with recent research indicating a decrease in burglary and robbery rates around EITC disbursements.
In a recent case, a Florida man pleaded guilty to evading nearly $2.4 million in taxes on income earned from his business by forming a trust to direct his income and pay personal expenses. Trusts, especially revocable living trusts, can be beneficial in estate planning, though they do not provide asset protection while the creator is alive. The Taxpayer Advocate Service recommended adjusting the threshold for reporting large gifts from foreign individuals to reduce penalties imposed by the IRS.
The South Carolina Supreme Court ruled an existing sales tax statute unconstitutional for favoring in-state sellers over out-of-state sellers. In California, a lawsuit involving stock options at a startup company resulted in a win for the plaintiff, with the court determining that stock options are not wages under the California Labor Code. The IRS has updated various procedures and publications, including creating a template for a Written Information Security Plan for tax and accounting practices.
Upcoming tax deadlines include third quarter estimated payments for individuals and corporations, and due dates for partnership and S corporation returns. Tax conferences and events are scheduled, including webinars on tax topics and the National Association of Tax Professionals Tax Forum. Trivia question reveals Canada as the country topping the list for total fraud complaints reported to the FBI’s Internet Crime Complaint Center. Feedback and suggestions for improvements to the newsletter are welcomed.
