Taxable Talk

Don't try this at home.

Suppose you set up some offshore companies. You take invstors' money and buy gold coins (making the money harder to trace). Add a few shell companies, here and abroad, ignore those pesky IRS (and Treasury) regulations requiring you to disclose foreign bank accounts, mix it up, and you end up with a wonderful scheme to hide assets from the IRS.

Almost. The IRS found out. The perpetrators are finding their way to federal institutions. The Portland Oregonian reported today that the scam cost the IRS over $22 million in unpaid taxes. Terry Neal, of Gresham, OR, will have five years to consider his crimes (in prison) and was also fined $50,000. His co-conspirators received lesser sentences (but did get jail time). And the IRS ended up seizing most of the gold, and did collect over $176,000 from selling it.

The moral is the usual one: If it sounds too good to be true...

News Story: Portland Oregonian

A couple of weeks ago, I noted that phishers have started targeting people by claiming that you can receive a small tax refund. Just click on their link (to a phony IRS website), give out your information, and we'll get you $82.58 or some other small sum. In Tuesday's Wall Street Journal (paid subscription required), there's yet another article about this scam.

The IRS does not send out emails to taxpayers. The IRS website does have a tool to find where your refund is (you need your social security number, filing status, and the exact amount of your refund).

Remember, if it sounds too good to be true, it probably is.

Well, not really.

From the Newark Star-Ledger comes word that the New Jersey Director of Taxation, Robert Thompson, Deputy Director Harold Fox (no relation), and Assistant Director for Compliance David Gavin have been suspended. The New Jersey Commission of Investigation alleges that the three received gifts from OSI Collection Services. Governor Jon Corzine ordered the expedited ethics investigation. The three were suspended with pay.

The Commission report alleges that the three were wined, dined, taken to spas, Broadway shows, and on golf trips. The report also alleges that the three allowed OSI to overbill New Jersey by $1 million. OSI collected delinquent taxes for the state on an outsourcing contract. The contract expired at the end of February and was not renewed.

News Story: Newark Star-Ledger