When you read this newsletter, my daughter will have just graduated from college. This is a big deal for us as parents. On the one hand, we're excited for her, but on the other hand, it's a bit scary because change can be unpredictable. Some of us, like those who work with taxes, prefer things to be consistent and planned out. We like knowing what to expect and having clear rules to follow.
While my daughter and her friends are excited about their new beginnings, some older adults, like Baby Boomers turning 65 this year, might be thinking about retiring and possibly moving to a new city. Forbes made a list of the best cities to retire in based on things like housing costs, taxes, healthcare, and more. I was happy to see those two cities from my state, Pennsylvania, made the list.
Where you live is important, especially if you're thinking about moving. I grew up in an area prone to hurricanes, so I know how expensive and tough it can be to recover from those kinds of disasters. The government recently changed how retirement accounts are handled after a natural disaster, like a hurricane. Now, people affected by disasters can take money out of their retirement accounts without paying a penalty.
The IRS, the government agency that deals with taxes, also puts out a lot of information to help people understand taxes better. They release reports and data to help taxpayers and policymakers make good decisions about taxes.
Sometimes people move to different states or even different countries. But even if you move away, you still have to pay taxes in the U.S. on the money you make worldwide. Some rules can help you pay less in taxes if you live abroad, but you still have to file tax returns.
Also, if you receive money or assets from another country while living in the U.S., you might have to report it to the IRS. The government recently made some new rules about reporting foreign money and gifts to make sure people aren't hiding money from the IRS.
That's a quick summary of the tax news for this week. And a big congratulations to all the graduates out there! And a thank you to all the parents who supported them along the way.
Tax Fraud
A federal district court has issued a permanent injunction against a tax professional and his company, prohibiting them from promoting or selling tax schemes involving charitable remainder annuity trusts (CRATs). This action comes after several similar injunctions were granted previously. The government's amended complaint alleges that the scheme encouraged taxpayers to donate property, often real estate, to a CRAT, with the property's value inflated on tax documents. After the sale of the property, the proceeds were used to purchase an annuity, and the resulting payments were either not reported or incorrectly reported as tax-free distributions from the CRAT.
Misuse of CRATs is a significant concern for the IRS, highlighted by their inclusion of CRAT abuse in their "Dirty Dozen" list of tax schemes on April 24, 2024.
Some individuals involved in tax schemes like this face imprisonment
. In the fiscal year 2022, the U.S. Sentencing Commission reported 61,142 cases, with only 401 related to tax fraud, including tax evasion, failure to file or pay, filing fraudulent returns, or aiding tax fraud.
Reported tax fraud cases have decreased by 22.4% since fiscal year 2018, although there has been a recent slight increase, likely due to enhanced enforcement efforts.
Additional statistics on tax fraud offenders include:
73.0% were male.
48.1% were White, 29.1% Black, 14.0% Hispanic, and 8.8% belonged to other racial groups.
The average age was 52.
92.8% were U.S. citizens.
84.0% had little or no prior criminal history.
0 Comments