Hiding assets to avoid paying taxes can come with a hefty price. A former University of Rochester professor learned that.
The Internal Revenue Service has taken a considerable number of steps in the past few years to combat tax fraud and identity theft. Losses due to fraud in 2013 and 2014 totaled nearly $9 billion.
Many taxpayers rely on electronic software or a professional tax preparer to help them complete their income tax returns. However, in order for your return to be free of errors, you still must provide the correct information. As they say, "Garbage in, garbage out."
Most people haven't even begun thinking about filing their 2016 tax returns yet. However, the Internal Revenue Service has already announced changes to the U.S. tax code for 2017. These won't impact the tax returns you file this April. However, it's a good idea to be aware of them as you go into the new year. This can help you make financial decisions that will minimize your tax burden and also help you prevent running afoul of the tax laws.
As Americans increasingly file their taxes online, identity theft has become a growing issue. People are stealing taxpayers' identities, filing false returns and obtaining refunds of money not owed them (or the taxpayer). State and federal authorities, including the Internal Revenue Service, have been working diligently to prevent these fraudulent returns from going through and catch those who are guilty of this type of tax fraud.
The man who runs Wings Over Ithaca has been charged with 26 counts of felony sales tax evasion. The 47-year-old Massachusetts man recently pleaded not guilty to the charges against him in Albany City Court.
If there's one thing that unites Americans, even amid a highly-contentious presidential election, it's the fear of an audit by the Internal Revenue Service. Realistically, your chances of being audited are very slim and dropping. Fewer than 1 percent of filers were audited for the tax year 2013. With budget cuts, the resources available to conduct audits are becoming scarcer.
Legislation quietly passed last year in Congress may prevent you from traveling abroad if you owe a significant amount of tax debt. The law, initially proposed in 2012, did not gain overwhelming support from Congress and the President until 2015. The enactment, part of H.R.22, adds "Revocation or Denial of Passports In Case of Certain Tax Delinquencies" (Section 7345) to the tax code. It grants the State Department the power to revoke, limit, or deny a passport to anyone with a considerably delinquent tax debt exceeding $50,000. That amount includes penalties and interest, which add up quickly. The IRS compiles the list of offenders and gives the State Department the green light to cancel or deny passports.
A father and son have been indicted for failing to pay over $1 million in sales taxes between 2011 and 2014 for the three Nassau County BP gas stations they own. They both could serve years in prison.
A 57-year-old New York pharmacist is facing over three-and-a-half years in prison for tax and health care fraud. The New City man ran pharmacies in the Bronx, Queens and Rockland. Additionally, he was ordered to pay $2.7 million in restitution to the Medicaid and Medicare programs, $736,000 in restitution to the Internal Revenue Service and to forfeit $2.7 million in proceeds from the $5 million in prescriptions he claimed to have filled throughout 2011 and 2012, but didn't.