The most common felony charges in the criminal tax arena are tax evasion and false statements.  These two offenses make up the majority of criminal tax prosecutions in the United States.  Under these two legal theories, the validity of the tax returns filed, and the associated tax loss to the government, are pivotal questions at various steps in a prosecution.  For this reason, it is imperative the defense has access to a qualified accountant to combat the government’s purported loss figures.  In most cases, a taxpayer cannot be competently represented without the assistan ..read more

The regulatory environment surrounding the crypto market is evolving yearly.  As crypto assets become more common parts of investing portfolios, the federal government is attempting to clarify the requirements under various federal regulations.  One of the most active areas is found under the tax rules within the Internal Revenue Code.  Though the government has not created new rules directed at crypto transactions, they have consistently provided clarifications on how crypto transactions should be treated under existing rules. For U.S. crypto investors, it is imperative to sta ..read more

The Internal Revenue Service (IRS) is divided into two main branches – the civil and criminal divisions.  The civil division is responsible for conducting routine audits, collections, delivering notices, and any other contact with a taxpayer related to unpaid or unfiled taxes.  The civil division plays a central role in keeping up with taxpayer filings and ensuring accurate amounts are paid by taxpayers each year. The criminal division is responsible for investigating actions or schemes which may lead to criminal charges.  Most investigations from the criminal division focus on ..read more

The United States has an extensive taxation system designed to raise money for government salaries and projects.  This system includes global taxation, including taxes for income, capital gains, rents, and other means of accruing wealth.  It also includes specific program taxation, including taxes for social security and Medicare.  Nearly all financial transactions in the United States result in a percentage of the funds going to the federal government.  When a citizen swipes their credit card at a local restaurant, the business owner has created income that will be taxed ..read more

This is a second post related to federal fraud within the COVID relief programs.  In the first post, we generally discussed two major COVID relief programs, Paycheck Protection Program (PPP) and Employee Retention Credit Program (ERC).  We focused on criminal fraud within the PPP program laying out the common schemes that are being indicted in federal courts across the country.  In this post, we will focus on ERC; providing a general overview of the program, eligibility requirements, and the common schemes associated with criminal fraud within ERC.  While PPP fraud has bee ..read more

In 2020, the world confronted a sprawling pandemic caused by a novel Coronavirus, COVID-19.  In the United States, the government took various measures to curb the spread of the virus and hopefully, ease the climbing death count. These measures were largely implemented at the local level (after all, what is good for Los Angeles may not be appropriate in North Dakota) and shaped by federal guidance through the Center for Disease Control and Prevention (CDC). Local ordinances instituted rules for businesses, citizens, and other establishments.  These rules included limiting the number ..read more

The Enormity of the United States Tax System The Internal Revenue Service (IRS) is responsible for ensuring U.S. citizens and corporations are paying the taxes required under the Internal Revenue Code (IRC).  The scope of this duty is enormous.  In 2021, the IRS received over 220 million tax returns.  The United States Treasury received over $4.1 trillion in gross tax revenue and issued over $600 million in refunds to tax payers.  The tax system in the United States handles billions of documents and trillions of dollars on an annual basis.  That figure balloons when l ..read more

This is the second post in a four-part series explaining the fall of FTX and the ultimate indictment against its founder, Sam Bankman-Fried (SBF).  In the first post, we reviewed SBF’s background, the creation of FTX, and how FTX generated revenue for its owners.  In this second part, we will build off that revenue structure to explain the market dynamics which forced FTX to file for bankruptcy in late 2022.  These first two posts will lay the necessary groundwork to understand the government’s indictment against SBF. FTX’s Assets and Revenue Model As discussed in the prior pos ..read more

Stories of the fall of crypto darling FTX, and its founder Sam Bankman-Fried (SBF), are draped all over the internet.  It is a riveting story that combines cryptocurrency greed with the deregulated nature of decentralized finance. For many, it is their first look behind the curtain of the crypto market.  Many of these online stories discuss SBF’s background and the facts leading to FTX’s fall.  However, none of the publications have told that story with an eye on the criminal indictment that followed.  This post aims to comprehensively fill in the gaps in the current artic ..read more

Criminal tax cases revolve around the tax loss involved in the alleged scheme.  The tax loss will shape charging decisions before indictment, the sentencing calculations following a conviction, and the amount of restitution ordered by the Court.  In prior posts, we have discussed the role of the tax loss in charging decisions and the sentencing guidelines.  However, we have not dissected the interplay between the tax loss and criminal restitution in a Title 26 violation.  Restitution is a main cog in the sentencing phase of a criminal tax case and must be well understood b ..read more