IRS Sees Increased Fraud in Automotive Sales Industry: Scams and fraud in the automotive sales industry have increased over the past three years, according to the Internal Revenue Service.
These range from aiding narcotics traffickers in laundering their ill-gotten gains to submitting false loan documents to financial institutions to obtain car loans.
The IRS says that special agents of IRS Criminal Investigation have investigated and recommended the prosecution of numerous individuals in the automotive sales industry. The subjects of these investigations vary from tax evasion to employment tax fraud to money laundering conspiracies to violations of the Bank Secrecy Act. There are currently more than 1,000 open audits of the tax returns of new and used car dealers for a variety of issues.
One scheme that has surfaced regards Form 8300, which must be filed with the IRS when a cash payment of over $10,000 is received in a trade or business. Some dealers are using an “IRS Form 8300 Exemption Certification” that can be filled out by the potential client to exclude the business from filing the required form. According to the IRS, “There is no such clause or certificate.”
IRS Selects Privacy Advocate: The Internal Revenue Service has appointed Maya A. Bernstein as the agency’s privacy advocate.
In her new role, Bernstein is responsible for developing policies to protect taxpayer and IRS employee privacy, and ensuring that they are integrated into all IRS practices and modernization efforts. The privacy advocate also ensures that taxpayers and employees are aware of their privacy rights.
Bernstein, an attorney, has special expertise in information policy and electronic commerce, including data protection, privacy compliance and electronic signature law. Previously, she was a senior policy analyst at the Office of Management and Budget.
Finance Committee Field Hearing to Examine Rural Tax Initiatives: Sen. Chuck Grassley has scheduled a field hearing of the Finance Committee, set for August 26 at the Dallas Center in Iowa, to examine a number of tax initiatives designed to enhance the rural economy.
The hearing will consider legislation to repeal the dividend allocation rule for farmer cooperatives. This tax penalizes farmer cooperatives relative to other types of cooperatives and limits the ability of farmer cooperatives to raise the equity capital needed to modernize and expand.
In addition, the hearing will examine legislation sponsored by Grassley to override an Internal Revenue Service position that now prevents tax-exempt cooperatives from including processes that add value through animals in their marketing activities. For example, the legislation would allow cooperatives to market eggs laid by chickens that are fed corn received by the cooperative from member farmers.
Finally, the hearing will consider the ethanol excise tax exemption so that ethanol-blended fuels make the same contribution to the highway trust fund as regular gasoline, while extending the ethanol tax incentive to 2010 and making biodiesel eligible for the excise tax credit.
RIA’s GoSystem Forms India Outsourcing Alliance: Following an industry trend, RIA announced that it has formed a strategic relationship with an Indian company to outsource tax processing of its GoSystem Tax RS software.
GoSystem customers can now use G.K. Management Services (India) Pvt. Limited to streamline their tax return processing.
RIA said that by using GKM’s tax outsourcing service, CPA firms can process a higher number of returns than they could in the past and returns can be turned around much faster, saving a typical firm up to 60 percent of what they would pay to domestically outsource this work.
