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Morgan Stanley Forecasts that Tax Refunds in 2019 will be about 26% Greater than 2018

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the staff of the Ridgewood blog  says

Ridgewood NJ, Taxes will be lower for most people this year because of the GOP’s tax bill passed last December. According to Morgan Stanley, Americans have been overwithholding significantly, and the investment bank forecasts that refunds in 2019 will be about 26% greater than 2018. In raw dollars, this is $62 billion more than last year’s $235 billion in refunds that were issued this year, as of April.

According to Morgan Stanley Americans have not adjusted their tax withholdings and still withhold too much on their payroll taxes.All the extra money in Americans’ pockets will likely boost savings accounts and the sales of big-ticket items next February and March, Morgan Stanley says.In 2018, according to survey numbers cited by Morgan Stanley, 65% of consumers planned to save their refunds, 35% said they’d pay down debt, and just 5% said they’d make a major purchase .

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Jersey Shore Star Michael “The Situation” Sorrentino was sentenced today to eight months in prison for Tax Evasion

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the staff of the Ridgewood blog

Newark NJ,  Television personality Michael “The Situation” Sorrentino was sentenced today to eight months in prison and his brother, Marc Sorrentino, to 24 months in prison for violating federal tax laws, U.S. Attorney Craig Carpenito, District of New Jersey; Principal Deputy Assistant Attorney General Richard E. Zuckerman of the U.S. Department of Justice’s Tax Division; and IRS Special Agent in Charge John R. Tafur announced.

Continue reading Jersey Shore Star Michael “The Situation” Sorrentino was sentenced today to eight months in prison for Tax Evasion

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NJ State Senator Steven Oroho : IRS regulation highlights the need to advance major reforms to lower the cost of government in New Jersey

the staff of the Ridgewood blog

Allamuchy NJ , Senator Steven Oroho said that a regulation proposed by the Internal Revenue Service that would derail an attempt to sidestep the recently enacted $10,000 cap on the federal deduction for state and local taxes highlights the need to advance major reforms to lower the cost of government in New Jersey.

Continue reading NJ State Senator Steven Oroho : IRS regulation highlights the need to advance major reforms to lower the cost of government in New Jersey

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NJGOP Chairman Calls On Murphy To End Frivolous Lawsuits Against Trump Admin and Focus on New Jersey

the staff of the Ridgewood blog

Trenton NJ,  Yesterday after the Trump administration moved to block state efforts to work around a new limit on state and local tax deductions, Governor Murphy has said he is weighing legal actions.. New Jersey’s top Republican NJGOP Chairman Doug Steinhardt released the following statement:

Continue reading NJGOP Chairman Calls On Murphy To End Frivolous Lawsuits Against Trump Admin and Focus on New Jersey

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Bergen County Man Admits Using Personal Information Stolen From U.S. Service Members To File Phony Tax Returns

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July 20,2018

the staff of the Ridgewood blog

Fort Lee NJ,  A Fort Lee, New Jersey, man today admitted generating phony tax refunds using personal identifying information stolen from current and former members of the U.S. army, U.S. Attorney Craig Carpenito announced.
Shope Oluwo, 33, pleaded guilty before U.S. District Judge Freda L. Wolfson in Trenton federal court to an indictment charging him with one count each of conspiracy to commit wire fraud, access device fraud, and aggravated identity theft.

According to documents filed in this case and statements made in court:
From January through February 2016, Oluwo conspired with others, including Dermot Sutherland, 29, of Philadelphia, to obtain personal identifying information that was stolen from current or former members of the U.S. Army. Oluwo used that stolen information to create fake military identification cards and fraudulent W-2 forms bearing the victims’ names.
Oluwo provided the phony cards and W-2 forms to Sutherland, who posed as the victims and filed phony returns with a tax preparation company. Afterwards, Sutherland received debit cards from the tax preparation company that contained the ill-gotten refunds.

The conspiracy to commit wire fraud charge carries a maximum potential penalty of 20 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. The access device fraud charge carries a maximum potential penalty of 10 years in prison and $250,000 fine, or twice the gross gain or loss from the offense. The aggravated identity theft charge carries a term of imprisonment of two years which must run consecutively to any other prison term. Sentencing is scheduled for Oct. 26, 2018.

Sutherland previously pleaded guilty to his role in the scheme and awaits sentencing.

U.S. Attorney Carpenito credited special agents of the U.S. Department of Defense, Defense Criminal Investigative Service, under the direction of Special Agent in Charge Leigh-Alistair Barzey; postal inspectors of the U.S. Postal Inspection Service, under the direction of Acting Inspector in Charge Judy Ramos; and special agents of IRS–Criminal Investigation, under the direction of Acting Special Agent in Charge Bryant Jackson in Newark, with the investigation leading to today’s guilty plea.

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Many taxpayers have encountered individuals impersonating IRS officials

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July 7,2018

the staff of the Ridgewood blog

Washington DC, Many taxpayers have encountered individuals impersonating IRS officials – in person, over the telephone and via email. Don’t get scammed. We want you to understand how and when the IRS contacts taxpayers and help you determine whether a contact you may have received is truly from an IRS employee.
The IRS initiates most contacts through regular mail delivered by the United States Postal Service.

However, there are special circumstances in which the IRS will call or come to a home or business, such as when a taxpayer has an overdue tax bill, to secure a delinquent tax return or a delinquent employment tax payment, or to tour a business as part of an audit or during criminal investigations.

Even then, taxpayers will generally first receive several letters (called “notices”) from the IRS in the mail.
Note that the IRS does not:
Call to demand immediate payment using a specific payment method such as a prepaid debit card, gift card or wire transfer. Generally, the IRS will first mail a bill to any taxpayer who owes taxes.
Demand that you pay taxes without the opportunity to question or appeal the amount they say you owe. You should also be advised of your rights as a taxpayer.
Threaten to bring in local police, immigration officers or other law-enforcement to have you arrested for not paying. The IRS also cannot revoke your driver’s license, business licenses, or immigration status. Threats like these are common tactics scam artists use to trick victims into buying into their schemes.

If you owe taxes:
The IRS instructs taxpayers to make payments to the “United States Treasury.” The IRS provides specific guidelines on how you can make a tax payment at irs.gov/payments.
Here is what the IRS will do:
If an IRS representative visits you, he or she will always provide two forms of official credentials called a pocket commission and a HSPD-12 card. HSPD-12 is a government-wide standard for secure and reliable forms of identification for federal employees and contractors. You have the right to see these credentials. And if you would like to verify information on the representative’s HSPD-12 card, the representative will provide you with a dedicated IRS telephone number for verifying the information and confirming their identity.

Collection
IRS collection employees may call or come to a home or business unannounced to collect a tax debt. They will not demand that you make an immediate payment to a source other than the U.S. Treasury.
Learn more about the IRS revenue officers’ collection work.
The IRS can assign certain cases to private debt collectors but only after giving the taxpayer and his or her representative, if one is appointed, written notice. Private collection agencies will not ask for payment on a prepaid debit card or gift card. Taxpayers can learn about the IRS payment options on IRS.gov/payments. Payment by check should be payable to the U.S. Treasury and sent directly to the IRS, not the private collection agency.
Learn more about how to know if it’s really an IRS Private Debt Collector.

Audits
IRS employees conducting audits may call taxpayers to set up appointments or to discuss items with the taxpayers, but not without having first attempted to notify them by mail. After mailing an official notification of an audit, an auditor/tax examiner may call to discuss items pertaining to the audit.
Learn more about the IRS audit process.

Criminal Investigations
IRS criminal investigators may visit a taxpayer’s home or business unannounced while conducting an investigation. However, these are federal law enforcement agents and they will not demand any sort of payment.
Learn more about the What Criminal Investigation Does and How Criminal Investigations are Initiated.

Beware of Impersonations
Scams take many shapes and forms, such as phone calls, letters and emails. Many IRS impersonators use threats to intimidate and bully people into paying a fabricated tax bill. They may even threaten to arrest or deport their would-be victim if the victim doesn’t comply.

For a comprehensive listing of recent tax scams and consumer alerts, visit Tax Scams/Consumer Alerts.

Know Who to Contact
Contact the Treasury Inspector General for Tax Administration to report a phone scam. Use their “IRS Impersonation Scam Reporting” web page. You can also call 800-366-4484.
Report phone scams to the Federal Trade Commission. Use the “FTC Complaint Assistant” on FTC.gov. Please add “IRS Telephone Scam” in the notes.
Report an unsolicited email claiming to be from the IRS, or an IRS-related component like the Electronic Federal Tax Payment System, to the IRS at [email protected]

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Bergen County, New Jersey, Man Admits Conspiring To Defraud The IRS By Filing False Corporate Tax Returns

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July 7,2018

the staff of the Ridgewood blog

Elmwood Park NJ, A Bergen County, New Jersey, man today admitted conspiring with his father to file false federal tax returns for shell companies, resulting in $191,953 in fraudulent refunds, U.S. Attorney Craig Carpenito announced.
Jason Crespo, 35, of Elmwood Park, New Jersey, pleaded guilty before U.S. District Judge Jose L. Linares in Newark federal court to an information charging him with one count of conspiring with Jose Crespo, his father, to defraud the IRS by filing false corporate tax returns and cashing the resulting fraudulent refund checks.

According to the documents filed in this case and statements made in court:
Between 2010 and 2012, Jason and Jose Crespo filed numerous false federal corporate tax returns – IRS Forms 1120 – for fake businesses, knowing that the businesses were not real and that the credits claimed on the tax returns were false. The Crespos took advantage of fuel excise tax credits offered under federal tax law. The federal government taxes gasoline, diesel fuel, and certain other types of fuel, but certain commercial uses of these fuels are nontaxable. Businesses that purchase fuel for a nontaxable use can claim a tax credit by filing a “Credit for Federal Tax Paid on Fuels” – IRS Form 4136.
In one instance Jason and Jose Crespo filed a federal corporate tax return for 2008 for Jason Cleaning Service Corp. that falsely claimed a fuel excise tax credit of $14,556 and a resulting refund of $10,592. In fact, Jason Cleaning Service Corporation was a shell company and the fuel excise tax credit and other tax return numbers were false. Jason Crespo received and cashed the $10,592 refund check at a check-cashing facility in Guttenberg, New Jersey. He cashed many other refund checks for similar false tax returns at this same facility.

Jose Crespo pleaded guilty on Sept. 11, 2017, before Judge Linares to engaging in the fuel excise tax credit scheme and another tax fraud scheme, both of which claimed fraudulent refunds from the IRS of approximately $1.5 million. Jose Crespo was sentenced on Dec. 20, 2017, to three years in prison.

Marilyn Crespo, Jose Crespo’s wife, pleaded guilty on March 1, 2018, before Judge Linares to engaging in the same fuel excise tax credit scheme and causing a loss to the IRS of $286,742. She was sentenced June 27, 2018, to one year and one day in prison.

The filing a false tax return count carries a maximum potential penalty of three years in prison, and a potential $250,000 fine, or twice the gross gain or loss from the offense. Jason Crespo’s sentencing is set for Oct. 4, 2018.

U.S. Attorney Carpenito credited special agents of IRS-Criminal Investigation, under the direction of Acting Special Agent in Charge Bryant Jackson, with the investigation leading to today’s guilty plea.

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The Trump administration releases proposed draft of its new shorter 1040 form

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June 29,2018

the staff of the Ridgewood blog

Washington DC, The Trump administration on Thursday released a proposed draft of its new 1040 tax form, which is shorter than the current form but could require additional documentation depending on the financial circumstances of the taxpayer.

The Tax Cuts and Jobs Act, which eliminated certain deductions, helped the administration shrink the size of the main individual tax form. Items that used to be included on the main form, however, are now moved to subsequent schedules.It should be noted that these documents are just drafts and may not reflect the finished product.

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IRS Documents Reveal Senator John McCain’s Subcommittee Staff Director Urged IRS to Engage in “Financially Ruinous” Targeting of Tea Party Groups

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June 25,2018

the staff of the Ridgewood bog

Washington DC,  Judicial Watch today released newly obtained internal IRS documents, including material revealing that Sen. John McCain’s former staff director and chief counsel on the Senate Homeland Security Permanent Subcommittee, Henry Kerner, urged top IRS officials, including then-director of exempt organizations Lois Lerner, to “audit so many that it becomes financially ruinous.” Kerner was appointed by President Trump as Special Counsel for the United States Office of Special Counsel.

The explosive exchange was contained in notes taken by IRS employees at an April 30, 2013, meeting between Kerner, Lerner, and other high-ranking IRS officials. Just ten days following the meeting, former IRS director of exempt organizations Lois Lerner admitted that the IRS had a policy of improperly and deliberately delaying applications for tax-exempt status from conservative non-profit groups.
Lerner and other IRS officials met with select top staffers from the Senate Governmental Affairs Committee in a “marathon” meeting to discuss concerns raised by both Sen. Carl Levin (D-MI) and Sen. John McCain (R-AZ) that the IRS was not reining in political advocacy groups in response to the Supreme Court’s Citizens United decision. Senator McCain had been the chief sponsor of the McCain-Feingold Act and called the Citizens United decision, which overturned portions of the Act, one of the “worst decisions I have ever seen.”

In the full notes of an April 30 meeting, McCain’s high-ranking staffer Kerner recommends harassing non-profit groups until they are unable to continue operating. Kerner tells Lerner, Steve Miller, then chief of staff to IRS commissioner, Nikole Flax, and other IRS officials, “Maybe the solution is to audit so many that it is financially ruinous.” In response, Lerner responded that “it is her job to oversee it all:”
Henry Kerner asked how to get to the abuse of organizations claiming section 501 (c)(4) but designed to be primarily political. Lois Lerner said the system works, but not in real time. Henry Kerner noted that these organizations don’t disclose donors. Lois Lerner said that if they don’t meet the requirements, we can come in and revoke, but it doesn’t happen timely. Nan Marks said if the concern is that organizations engaging in this activity don’t disclose donors, then the system doesn’t work. Henry Kerner said that maybe the solution is to audit so many that it is financially ruinous. Nikole noted that we have budget constraints. Elise Bean suggested using the list of organizations that made independent expenditures. Lois Lerner said that it is her job to oversee it all, not just political campaign activity.

Judicial Watch previously reported on the 2013 meeting. Senator McCain then issued a statement decrying “false reports claiming that his office was somehow involved in IRS targeting of conservative groups.” The IRS previously blacked out the notes of the meeting but Judicial Watch found the notes among subsequent documents released by the agency.

Judicial Watch separately uncovered that Lerner was under significant pressure from both Democrats in Congress and the Obama DOJ and FBI to prosecute and jail the groups the IRS was already improperly targeting. In discussing pressure from Senator Sheldon Whitehouse (Democrat-Rhode Island) to prosecute these “political groups,” Lerner admitted, “it is ALL about 501(c)(4) orgs and political activity.”
The April 30, 2013 meeting came just under two weeks prior to Lerner’s admission during an ABA meeting that the IRS had “inappropriately” targeted conservative groups. In her May 2013 answer to a planted question, in which she admitted to the “absolutely incorrect, insensitive, and inappropriate” targeting of Tea Party and conservative groups, Lerner suggested the IRS targeting occurred due to an “uptick” in 501 (c)(4) applications to the IRS but in actuality, there had been a decrease in such applications in 2010.

On May 14, 2013, a report by Treasury Inspector General for Tax Administration revealed: “Early in Calendar Year 2010, the IRS began using inappropriate criteria to identify organizations applying for tax-exempt status” (e.g., lists of past and future donors). The illegal IRS reviews continued “for more than 18 months” and “delayed processing of targeted groups’ applications” in advance of the 2012 presidential election.
All these documents were forced out of the IRS as a result of an October 2013 Judicial Watch Freedom of Information (FOIA) lawsuit filed against the IRS after it failed to respond adequately to four FOIA requests sent in May 2013 (Judicial Watch, Inc. v. Internal Revenue Service (No. 1:13-cv-01559)). Judicial Watch is seeking:

All records related to the number of applications received or related to communications between the IRS and members of the U.S. House of Representatives or the U.S. Senate regarding the review process for organizations applying for tax exempt status under 501(c)(4);

All records concerning communications between the IRS and the Executive Branch or any other government agency regarding the review process for organizations applying for tax exempt status under 501(c)(4);
Copies of any questionnaires and all records related to the preparation of questionnaires sent to organizations applying for 501(c)(4) tax exempt status.
All records related to Lois Lerner’s communication with other IRS employees, as well as government or private entity outside the IRS regarding the review and approval process for 501 (c)(4) applicant organizations.
“The Obama IRS scandal is bipartisan – McCain and Democrats who wanted to regulate political speech lost at the Supreme Court, so they sought to use the IRS to harass innocent Americans,” said Judicial Watch President Tom Fitton. “The Obama IRS scandal is not over – as Judicial Watch continues to uncover smoking gun documents that raise questions about how the Obama administration weaponized the IRS, the FEC, FBI, and DOJ to target the First Amendment rights of Americans.”

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NJ Attorney General Asks IRS to Withdraw Proposal that Would Upend New Jersey’s Charitable Deduction Tax Credit Law

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AG Grewal to IRS: Stop “Playing Politics” with SALT Tax Guidance—or Face a Legal Challenge

May 27,2018

the staff of the Ridgewood blog

Trenton NJ,  Attorney General Gurbir S. Grewal today urged the U.S. Internal Revenue Service (IRS) to drop its “misguided” plan to enact a new rule designed to undermine a recent New Jersey law. That law – signed by Governor Phil Murphy earlier this month – allows residents to receive property tax credits when they make charitable contributions to their local governments.

The Trump Administration enacted a tax overhaul in December 2017 that placed, for the first time, a $10,000 cap on the federal deduction for state and local taxes (SALT). In response, New Jersey, New York and other states passed laws allowing residents to instead make deductible charitable contributions to their local governments, and to receive partial tax credits when they do so. “But in an unprecedented move,” Attorney General Grewal explained, the IRS just yesterday “announced plans to end the deductibility of such contributions.”

In a letter to IRS Commissioner David J. Kautter, Attorney General Grewal points out that the New Jersey tax credit law is similar to 100 laws enacted in more than 30 other states, and is consistent with longstanding IRS guidance and numerous court decisions that such contributions remain deductible. So “the IRS’s plan will upend over 100 state programs in a single rule—a nightmare for both states and the IRS.” Yet the IRS has given “no reason for [its] sudden about-face.”

“The IRS should not play politics. Instead, it must confirm its longstanding interpretation of federal law,” Grewal explains in his letter. “Should the IRS and Treasury Department continue down this path, New Jersey will have no choice but to challenge the new rule in court.”

Attorney General Grewal’s letter notes that the New Jersey law authorizes municipal and county governments and local school districts to establish “charitable funds for specific purposes” and to permit residents to gain partial property tax credits for donating to those funds. Across the states with similar programs, charitable funds “run the gamut” from those designed to aid natural resource preservation efforts to funds that help provide financial aid for college-bound children, support shelters for the victims of domestic violence and many other programs.

The Attorney General contends that the IRS’s decision runs counter to the federal Tax Code, which makes plain that deductions are permissible for “any charitable contribution … payment of which is made within the taxable year.”
“The statute is explicit that such contributions include gifts given to state governments and their political subdivisions,” Grewal notes. “The only remaining issue is whether such gifts are deductible if the contributor gets a tax credit in return.” While the IRS has previously “answered that question resoundingly in favor of laws” like New Jersey’s, the latest guidance “suggests that the IRS plans to tell states and taxpayers alike the answer is no.”
“I ask you to think twice before going down that misguided road,” Grewal warns the IRS Commissioner. “The IRS’s longstanding approach, supported by precedent and policy, supports what New Jersey has done.”