Issued on June 18, 2010
Highlights of Report Number: 2010-30-058 to the Internal Revenue Service Chief, Criminal Investigation.
IMPACT ON TAXPAYERS
The use of asset forfeiture has become one of the most important tools that Federal law enforcement can employ against criminals, such as drug dealers and white-collar criminals. Law enforcement officers believe that the effective use of forfeiture laws can result in a decrease in criminal activity. Our review determined that the Criminal Investigation (CI) Division can take steps to ensure its seizure opportunities are maximized. The use of seizure and the ultimate forfeiture of assets deprive individuals, who knowingly violate the nation’s tax laws, of their ill-gotten gains.
WHY TIGTA DID THE AUDIT
The CI Division uses its asset seizure and forfeiture authority as a tool for combating unlawful activities designed to evade taxes. The overall objective of this review was to evaluate whether the CI Division adequately considered the seizure of assets during its illegal source and narcotics investigations.
WHAT TIGTA FOUND
There are opportunities for the CI Division to improve its Asset Forfeiture Program. During Fiscal Year 2009, the CI Division seized just more than 1,600 assets, which is a 13 percent decline from the previous year and a 28 percent decline from the six-year high in Fiscal Year 2007. The decline in the number of assets seized can be partly attributed to the decrease in the number of illegal source and narcotics investigations initiated during that period and the loss of experienced special agents in recent years. In addition, there was a significant disparity in the number of assets seized among the field offices.
TIGTA’s analyses of the CI Division’s management information system data indicated that the CI Division may have missed some seizure opportunities. TIGTA analyzed a sample of investigations with money laundering or bank structuring violations and found that requests to pursue seizure were made in only 34 percent of the investigations with the percentage of requests varying significantly among field offices.
While the CI Division may have missed some seizure opportunities, its Asset Forfeiture Program is respected by outside stakeholders and, when compared to other Federal agencies, its Program appears to be productive.
WHAT TIGTA RECOMMENDED
TIGTA recommended that the Chief, CI Division, require contractor employees to review the CI Division’s management information system reports to identify recently initiated narcotics and illegal source investigations where there is no corresponding seizure investigative activity and proactively engage the special agents in discussions regarding the identification of forfeitable assets. TIGTA also recommended that the Chief, CI Division, require contractor employees to periodically contact special agents to determine the status of the seizure and offer additional assistance. In addition, TIGTA recommended that the Chief, CI Division, conduct an internal study of narcotics and illegal source investigations, where the seizure of assets was not pursued, to determine if seizure opportunities were missed.
Internal Revenue Service (IRS) officials agreed with four of the five recommendations and disagreed with one. The CI Division did not agree with conducting an internal study but plans to ensure the appropriate management reviews are being performed. However, because TIGTA is precluded from reviewing case file information due to grand jury restrictions, TIGTA believes the CI Division would benefit from conducting this review because it would determine the extent of the issue and provide ideas for improvement.
As always if you have any questions or comments please email me at rondazaragoza@gmail.com. I will try and reply to your question within 24-48 hours of receipt.
Wednesday, July 21, 2010
New Mexico: Some firms must now e-file taxes
New Mexico trucking companies with two or more trucks and businesses that pay more than $20,000 a month in Combined Reporting System (CRS) taxes are now required to file their taxes online, the New Mexico Taxation and Revenue Department said.
The electronic filing can be done through a new Web site the tax department is offering. To find it, go online and click on the Online Services button, which will lead to a tutorial called “How to E-File Your CRS Tax.”
The affected companies are required to start filing their CRS taxes online by August 25 for the July 2010 tax period. The weight and distance taxes must be filed online by October 31 of this year. All other monthly filers will be phased in over the next year.
The requirement was brought about by 1995 legislation that authorized the department to require electronic filing. The department didn’t have the systems in place to do that until recently, it said.
Tax and Revenue Secretary Designate Duffy Rodriguez said that e-filing is “easy, fast, reliable and convenient.”
The department has launched a new campaign called E-file in Style to alert more than 146,000 monthly tax filers to the requirement to file online.
As always if you have any questions or comments please email me at rondazaragoza@gmail.com. I will try and reply to your question within 24-48 hours of receipt.
The electronic filing can be done through a new Web site the tax department is offering. To find it, go online and click on the Online Services button, which will lead to a tutorial called “How to E-File Your CRS Tax.”
The affected companies are required to start filing their CRS taxes online by August 25 for the July 2010 tax period. The weight and distance taxes must be filed online by October 31 of this year. All other monthly filers will be phased in over the next year.
The requirement was brought about by 1995 legislation that authorized the department to require electronic filing. The department didn’t have the systems in place to do that until recently, it said.
Tax and Revenue Secretary Designate Duffy Rodriguez said that e-filing is “easy, fast, reliable and convenient.”
The department has launched a new campaign called E-file in Style to alert more than 146,000 monthly tax filers to the requirement to file online.
As always if you have any questions or comments please email me at rondazaragoza@gmail.com. I will try and reply to your question within 24-48 hours of receipt.
Monday, July 19, 2010
Snipes Goes to Jail for Tax Evasion
"Wesley Snipes Gets Three-Year Sentence For Tax-Evasion?
Action-hero, Wesley Snipes had better brush up on his 'Blade' martial arts skills, because word is, he's looking at three years in the big house for tax evasion. A federal appeals court in Atlanta upheld the three-year sentence issued by a lower court yesterday. Wesley Snipes was found guilty of not paying over $12 million in taxes between the years of 1999 and 2001. His attorneys argued that the sentence of 36 months was 'unreasonable' but the court responded
'The district court acted well within its considerable discretion in sentencing Snipes to thirty-six months in prison'
Wesley Snipes gets three years over taxes while the likes of T.I. and Lil Wayne get less than a year for stockpiling weaponry that could overtake a small country? So now who is the bigger risk?
As always if you have any questions or comments please email me at rondazaragoza@gmail.com. I will try and reply to your question within 24-48 hours of receipt.
Action-hero, Wesley Snipes had better brush up on his 'Blade' martial arts skills, because word is, he's looking at three years in the big house for tax evasion. A federal appeals court in Atlanta upheld the three-year sentence issued by a lower court yesterday. Wesley Snipes was found guilty of not paying over $12 million in taxes between the years of 1999 and 2001. His attorneys argued that the sentence of 36 months was 'unreasonable' but the court responded
'The district court acted well within its considerable discretion in sentencing Snipes to thirty-six months in prison'
Wesley Snipes gets three years over taxes while the likes of T.I. and Lil Wayne get less than a year for stockpiling weaponry that could overtake a small country? So now who is the bigger risk?
As always if you have any questions or comments please email me at rondazaragoza@gmail.com. I will try and reply to your question within 24-48 hours of receipt.
Friday, July 2, 2010
New ways to raise taxes
Politicians aren't ready to admit that taxes are going up on most Americans. Here are some of the areas where governments will try to raise money. If you're hoping that tax hikes on the rich will solve America's debt crisis, you're sorely mistaken the power of the wealthy.
President Barack Obama's budget proposal would raise taxes on upper-income earners by $969 billion over the next 10 years, yet the federal debt would continue to bomb. To boost government revenue further, he'd raise an additional $122 billion from multinational companies, $90 billion from banks, $37 billion from oil companies and $24 billion from hedge funds and private-equity firms. All told, that's about $1.2 trillion. And it would barely make a dent. We'd still have huge deficits, and the national debt just keeps growing.
Taxing the rich will be one of the hot political stories this year. It will also divert attention from a much bigger story: Sooner or later, almost everybody in America is going to pay more in taxes.
One reason is that spending on Social Security, Medicare and Medicaid -- which equals 56% of all federal outflows -- continues to skyrocket, and cutting those programs, just as baby boomers begin to retire, would be political suicide. Few politicians in Washington want to cut defense, which leaves little else on the chopping block.
At least 35 states face their own budget shortfalls this year, with revenue in many states coming in below projections that were weak to start with, according to the National Conference of State Legislatures. When federal stimulus spending winds down in 2011, many states anticipate a "cliff effect," in which their revenues plunge. That means money will have to come from somewhere else, and there aren't enough rich people to provide all the funds.
"It's inevitable that the government will have to find a way to have a truly middle-income tax increase," says Clint Stretch of consulting firm Deloitte Tax. "The trick is, how?"
Politicians, of course, don't want to admit that most of their constituents face stinging tax hikes. And until there's no other choice, they'll try to raise funds without having to mouth the T-word. As federal, state and local governments get desperate, here are four of the mechanisms elected officials will try to use to raise funds without getting run out of office:
Expanding existing taxes
Raising income tax rates is so unpopular that most politicians consider it a last resort. Raising state and local sales taxes is a bit more tolerable, and it's even better if you're simply expanding a tax that already exists.
Some states, for example, could expand sales taxes to things not already covered, such as restaurant meals, salons, business services, Internet connections, and phone or cable TV service. It also makes sense to crack down on people evading existing taxes, by increasing the fines for late payments and underpayments, and conducting more inspections to catch merchants and others who may be skirting their obligations.
Avoidable taxes
A new levy is more palatable when politicians can make the case that you don't have to pay it if you choose not to.
Consumers might be able to offset new gasoline taxes, for instance, by driving less or buying more-fuel-efficient cars. Some states are mulling new energy or carbon taxes, with part of the pitch being that you can make up the difference by using less energy.
Then there are the classic "sin" taxes on cigarettes and booze, which are only for people with unhealthful habits -- and have already gone up in more than a dozen states, according to the National Conference of State Legislatures. One new "sin" that could end up taxed: junk food.
Online taxes
This is controversial, because it could force online merchants to figure out tax rates for thousands of localities. But New York and a few other states are trying to impose regular sales taxes on Internet purchases, to replace revenue lost when those transactions don't take place in a physical store. A legal challenge to the so-called Amazon.com tax is pending in a New York court, and if the government wins, more states are sure to follow up with their own Internet taxes.
Health care taxes
You'd think health care was already expensive enough, but at least nine states have upped taxes on hospitals and other providers over the past year, according to National Conference of State Legislatures. Of course, many of those added costs will be passed on to insurers, businesses and, ultimately, consumers.
As always if you have any questions or comments please email me at rondazaragoza@gmail.com. I will try and reply to your question within 24-48 hours of receipt.
President Barack Obama's budget proposal would raise taxes on upper-income earners by $969 billion over the next 10 years, yet the federal debt would continue to bomb. To boost government revenue further, he'd raise an additional $122 billion from multinational companies, $90 billion from banks, $37 billion from oil companies and $24 billion from hedge funds and private-equity firms. All told, that's about $1.2 trillion. And it would barely make a dent. We'd still have huge deficits, and the national debt just keeps growing.
Taxing the rich will be one of the hot political stories this year. It will also divert attention from a much bigger story: Sooner or later, almost everybody in America is going to pay more in taxes.
One reason is that spending on Social Security, Medicare and Medicaid -- which equals 56% of all federal outflows -- continues to skyrocket, and cutting those programs, just as baby boomers begin to retire, would be political suicide. Few politicians in Washington want to cut defense, which leaves little else on the chopping block.
At least 35 states face their own budget shortfalls this year, with revenue in many states coming in below projections that were weak to start with, according to the National Conference of State Legislatures. When federal stimulus spending winds down in 2011, many states anticipate a "cliff effect," in which their revenues plunge. That means money will have to come from somewhere else, and there aren't enough rich people to provide all the funds.
"It's inevitable that the government will have to find a way to have a truly middle-income tax increase," says Clint Stretch of consulting firm Deloitte Tax. "The trick is, how?"
Politicians, of course, don't want to admit that most of their constituents face stinging tax hikes. And until there's no other choice, they'll try to raise funds without having to mouth the T-word. As federal, state and local governments get desperate, here are four of the mechanisms elected officials will try to use to raise funds without getting run out of office:
Expanding existing taxes
Raising income tax rates is so unpopular that most politicians consider it a last resort. Raising state and local sales taxes is a bit more tolerable, and it's even better if you're simply expanding a tax that already exists.
Some states, for example, could expand sales taxes to things not already covered, such as restaurant meals, salons, business services, Internet connections, and phone or cable TV service. It also makes sense to crack down on people evading existing taxes, by increasing the fines for late payments and underpayments, and conducting more inspections to catch merchants and others who may be skirting their obligations.
Avoidable taxes
A new levy is more palatable when politicians can make the case that you don't have to pay it if you choose not to.
Consumers might be able to offset new gasoline taxes, for instance, by driving less or buying more-fuel-efficient cars. Some states are mulling new energy or carbon taxes, with part of the pitch being that you can make up the difference by using less energy.
Then there are the classic "sin" taxes on cigarettes and booze, which are only for people with unhealthful habits -- and have already gone up in more than a dozen states, according to the National Conference of State Legislatures. One new "sin" that could end up taxed: junk food.
Online taxes
This is controversial, because it could force online merchants to figure out tax rates for thousands of localities. But New York and a few other states are trying to impose regular sales taxes on Internet purchases, to replace revenue lost when those transactions don't take place in a physical store. A legal challenge to the so-called Amazon.com tax is pending in a New York court, and if the government wins, more states are sure to follow up with their own Internet taxes.
Health care taxes
You'd think health care was already expensive enough, but at least nine states have upped taxes on hospitals and other providers over the past year, according to National Conference of State Legislatures. Of course, many of those added costs will be passed on to insurers, businesses and, ultimately, consumers.
As always if you have any questions or comments please email me at rondazaragoza@gmail.com. I will try and reply to your question within 24-48 hours of receipt.
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