IRS Increases Small Business Penalties For Some Tax Errors

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If you’re a small business owner, I highly recommend you read “Small business alert: Beware of stiff penalties for failing to file information returns” by Bill Bischoff.

Don’t get hit by costly U.S. Internal Revenue Service (IRS) penalties for failing to timely file information returns or provide requisite financial statements to third parties. As explained in Bischoff’s article, this includes W-2s, 1099s, K-1s and other IRS forms.

Jeremy Johnson: iWorks Founder Arrested

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iworks jeremy johnson arrested

After Jeremy Johnson's arrest, who will be next?

iWorks Jeremy Johnson Arrested

As noted by Salty Droid in “Jeremy Johnson Arrested for Jeremy Johnsoning,” the iWorks founder was arrested for mail fraud. You can get the details from that post but it’s clear the arrest was triggered by Jeremy Johnson’s decision to burn through assets that the government wanted seized for ultimate distribution to his victims.

What I’d like to point out is that the government is limited in resources for cracking down on Internet con artists. This means the Federal Trade Commission (FTC), U.S. Internal Revenue Service (IRS), and other government agencies typically go after the big fish to make examples. At that level, the best Internet lawyer or criminal defense attorney isn’t going to be of much help because the stakes are too high.

I’d contend that’s a mistake to focus solely on the big fish like Jeremy Johnson when cracking down on Internet fraud.

Although the big fish pull in headlines, the small-time con artist, or even a coordinated group of two-bit Internet con artists, should be fair game even if the press releases don’t get the attention of the New York Slimes.

Jeremy Johnson and Broken Windows Theory

Like broken windows theory, cracking down on the small-time online fraud creates a deterrent effect for a future Jeremy Johnson.

As things stand now, some Internet marketing gurus selling frauducts and flopportunities believe they’re invincible because they’re not as successful as a Jeremy Johnson or a Kevin Trudeau at what they do. If some of their cult followers started getting busted for Internet fraud, word would go viral online about the arrests and that feeling of invincibility would disappear.

On the bright side, when the government is through gobbling the big fish like Jeremy Johnson at iWorks, it will move down the food chain to the smaller fish who are committing online fraud. Until then, there’s going to be a trail of victims duped by false promises and fake testimonials like those provided by iWorks’ Jeremy Johnson, and even coordinated scams by certains gourous d’Internet dans les syndicats français.

Jeremy Johnson related posts prior to his arrest…

 

 

Hiding Assets In Switzerland and Tax Evasion

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According to a former classmate of mine, the U.S. government has an office with Internal Revenue agents in Switzerland that will sip coffee in the morning while looking out the window at the entrances to major banks there. When someone looking like a tourist heads to one of the banks with a suitcase (presumably with cash in it), one of the agents will go over and strike up a conversation. Whether or not this is true, I’d personally not want to be the guy caught with a suitcase full of cash by the IRS. These days, some Swiss banks are actively cooperating with the U.S. government to identify income tax evaders.

With income tax returns due on April 15, some U.S. Internet marketers mistakenly believe that putting money offshore somehow protects them from paying taxes owed to the Internal Revenue Service (the American equivalent of the United Kingdom’s Inland Revenue).

Unfortunately, that’s not the case.

For example, a Texas man just plead guilty to filing false tax returns and faces up to 3 years in prison for it. He was apparently hiding his funds in Swiss bank UBS.

Remember, minimizing your taxes legally (tax avoidance) is okay. Not paying what you owe is illegal (tax evasion).