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COVID-19: Wash Your Hands & Don’t Answer That Email

The IRS is warning the public that scammers continue to use the Coronavirus pandemic as a cover to steal money and personal information.

One popular scam tries to get victims to pay a fee for their stimulus payment. At the same time, another scam tricks people into giving the scammer their social security number, bank account, or government benefits debit card account number.

In May, there were more than 1200 stimulus-related websites registered. Sixty-seven of them were thought to be malicious and or suspicious. During one week in April, Google saw more than 18 million malware and phishing emails related to COVID-19 scams, and the 240 million daily spam messages it sees were related to the pandemic.

Other schemes include fake at-home test kits, fake cures, vaccines, pills, and advice on unproven treatments. Some websites claim to sell medical supplies the buyer will never see. Another scam includes bogus opportunities to invest early in companies working on a vaccine.

Once again the fine folks at SFS Tax& Accounting have helped us and saved us lots of money, thanks to their extensive knowledge of tax codes and government programs. For many years SFS has looked after our business and personal taxes, and have done a great job. I would, and do, recommend SFS to anybody who needs real tax professionals. They are eminently qualified and have sorted out the issues which occasionally arise, promptly and without complaint. Thanks to Jeff and the entire staff at SFS!
~ Michael Gertz, St.Clair Builders

Orange Is the New Black for Couple Who Defrauded Forever 21

Geraldine and Clayton Hill pleaded guilty to using a charity to evade taxes and defraud donors. The Hills founded On Your Feet, a tax-exempt charitable organization whose mission was to assist low-income families and individuals in need in San Diego.

The Hills received millions of dollars’ worth of goods from companies such as Feed the Children and Forever 21, with the explicit commitment that they would not sell any of the donated goods. However, between 2011 and 2016, they received over 16 million dollars’ worth of goods, sold it for a profit of 1.3 million dollars, and paid no taxes. They made charitable donations of only $13,000.

In 2015 Forever 21 donated 161 pallets of clothing valued at 5.6 million dollars. The Hills immediately sold the entire donation to a middleman for discount retailers. From the proceeds, they spent $380,000 on personal expenses, including vacations, entertainment, cars, and luxury retail purchases. They spent another $322,000 in cash.

In the organization’s 2009 tax return, the Hills claimed they received less than $25,000 in gross receipts, and in tax years 2011-2015, they claimed less than $50,000. For 2013-2014 they caused the US an estimated tax loss of $50,933.

They face a maximum sentence of five years in prison for each tax evasion charge and mail fraud conspiracy.

A Buffet of Lies and Deceit

The owners of the New China Buffet and Grill in Tennessee were charged with employment and income tax fraud, conspiracy to harbor illegal aliens and money laundering. Quanwei Shi and Chongqiang Chen, both 29, are accused of hiring undocumented workers from China and Guatemala to work at their restaurant. They did not require the workers to complete any forms related to immigration status and paid them in cash.

The indictment states that Shi evaded payroll taxes by failing to withhold $175,455 from the workers’ payments. Shi is also accused of signing and filing false forms with the IRS that underreported the business gross receipts for tax years 2017 and 2018.

The illegal workers, who lived with Shi and Chen, were transported to the restaurant daily and ordered to work in the kitchen, where they could not interact with the restaurant’s customers.

The defendants face up to 20 years in prison.

The Wrong Way to Do Laundry

Armen Martirosyan pled guilty to federal fraud for opening more than a dozen bank accounts he knew would be used to launder tax refunds obtained from false tax returns using stolen identities.

He opened the first account in 2009 and deposited $189,000 from 24 fraudulent tax refunds. Over the years, Martirosyan opened 15 bank accounts to launder money from illegal returns and laundered more than $1,866,000 in stolen funds.

Martirosyan was part of a much larger crime ring that used false identities and fake Republic of Armenia passports to open hundreds of bank accounts used to launder funds from fraudulent tax returns. The scheme involved approximately 7000 false tax returns that sought almost 38 million dollars in refunds. The IRS issued nearly 14 million dollars in refunds.

For his part in the scheme, Martirosyan faces a maximum sentence of 30 years in prison.

Question:

I’m separated from my spouse, who owns his own business, and we are in the process of getting a divorce. I have always filed jointly with my husband, and now the IRS is sending me notices stating I owe $65,000. I have no idea how they are coming up with this amount as my spouse said he was always taking care of this and paying the IRS what was owed.

Answer:

You may be able to avoid this liability entirely under the IRS’s Innocent Spouse Relief rules. Under federal law, if both husband and wife sign an income tax return, they are both 100% responsible for the taxes owed. However, the law permits special consideration where a spouse cannot be held accountable for the underreporting of income. Or the understatement of taxes that are attributable to the other spouse.

If you meet the following criteria, you may be able to apply for innocent spouse relief. Your spouse didn’t report all their income, and you were not aware of it and no reason to know about it when you signed the tax return, and it would be unfair to hold you liable for the taxes owed due to your spouse’s error. If you feel you were deceived by your spouse or tricked into signing a return you thought was correct this will help your case too. This will help your case too. There are many other ways you may be eligible for relief under the IRS’s innocent spouse rules, and we can help sort this out and determine the proper path for resolution.

If you have a state or federal tax problem or just want to refer a friend, relative or client, I’d love to hear from you. I provide a no-obligation, confidential consultation to help you solve your IRS problems.

Call us today and let’s get to work solving your tax problem 877.355.8010 or book your appointment online, https://meetme.so/SFSTax

877.355.8010
Jeffrey Schneider,
EA, CTRS, ACT-E NTPI Fellow
Email: jeff@sfstaxacct.com
738A Colorado Ave
Stuart, FL 34994
www.sfstaxproblemsolutions.com

A Summer Blueberry Buckle

Nothing is sweeter than the smell of a freshly baked cake. And nothing tastier than a coffee cake with plump, fresh blueberries.

I am an Alton Brown devotee and find his recipes, easy to make, and they turn out as expected. This recipe is straightforward to make and entirely worth the carbs.

Enjoy.

Find the recipe on the SFS Tax Problem Solution Pinterest page along with other pins and videos.

“One difference between death and taxes is that death doesn’t get worse every time Congress meets.”
–Anonymous