Some people say, “ignorance is bliss.” Similarly, it might also be a defense against tax crimes.
In the past year, bitcoin and other cryptocurrencies gained popularity among investors around the world. Cryptocurrencies exist as virtual tokens that allow investors to electronically transfer assets in a secure way using digital technology. However, they can present a multitude of issues when it comes time to report taxes.
Reports from multiple casinos about the spending of a public official in Montgomery County alerted the Internal Revenue Service to the possibility of unpaid income taxes. The subsequent IRS investigation eventually uncovered the fraudulent activities of the chief operating officer for the county's economic development department. The 58-year-old man has entered guilty pleas as part of a plea agreement on charges of tax evasion, wire fraud and theft of county funds.
The year is almost over, and it will soon be tax time again. However, according to the IRS, a significant portion of taxpayers in Maryland and across the U.S. fail to adhere to the tax code when they file their returns.
A federal judge in Maryland has sentenced a 45-year-old Baltimore County woman to seven years in prison for identity theft and filing fraudulent income tax returns with the Internal Revenue Service. A jury returned guilty verdicts on 14 counts of wire fraud, aggravated identity theft and filing false tax returns on May 22.
The unpaid tax debt owed by 20 individual and 25 business taxpayers in Maryland totals over $12 million according to an announcement by the state comptroller. The names of the delinquent taxpayers were posted on the agency's website in an effort to compel them to pay their overdue taxes.
Businesses in Maryland obtain their employer identification numbers from the Internal Revenue Service. A report prepared by the Treasury Inspector General for Tax Administration criticized the tax agency for its vulnerability to EIN abuse by fraudulent filers that steal existing numbers or gain numbers for fake business entities.
Taxpayers in Maryland and around the country were informed recently that IRS investigation and enforcement activity regarding tax crimes took a hit during the first year of the Trump Administration due to cutbacks in funding to the federal revenue-collection agency. Prosecution of IRS tax cases after allegations of federal tax crimes including tax fraud and tax evasion dropped by hundreds of cases during 2017.
Maryland residents and small business owners may need to be especially wary of identity theft and other security issues during the tax filing season. This is because thieves may try to get a list of employee W-2 forms in an effort to get the information on it. Companies are urged to contact the IRS directly if they are the victim of a scam or believe that someone is trying to conduct a scam.
Maryland residents may be aware that the rapper Earl Simmons, who is also known by the stage name of DMX, has been accused by the federal government of hiding millions of dollars in income to avoid paying taxes. Simmons faced up to 44 years in prison after being charged with 14 counts of tax fraud in July, but reports indicate that the 'It's Dark and Hell Is Hot" singer has avoided this fate by entering into a plea agreement with prosecutors.