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IRS-CI is Targeting Tax Fraud Related to the COVID-19 Crisis


Posted on October 30, 2020 |

Facing scrutiny from Internal Revenue Service Criminal Investigations (IRS-CI) is a serious matter. As the division’s name suggests, IRS-CI investigates allegations of criminal tax fraud, and IRS-CI investigations can lead to charges that carry substantial fines and long-term federal imprisonment.

IRS-CI regularly issues press releases announcing the outcomes of its investigations; and, recently, a significant number of its investigations have focused on tax fraud related to the COVID-19 crisis. If you are under investigation for COVID-19-related tax fraud in Massachusetts, it is important that you speak with a Boston criminal tax lawyer promptly.

5 Recent Examples of IRS-CI Investigations Targeting COVID-19 Tax Fraud

What types of acts and omissions can lead to scrutiny from IRS-CI? The following are five examples of recent IRS-CI investigations targeting tax fraud related to the COVID-19 crisis (Thorn Law Group did not provide representation to the defendants in these cases):

1. Florida Man Charged with COVID-19 Relief Fraud

On October 23, 2020, IRS-CI announced charges against a Florida man who is accused of fraudulently securing more than $1.9 million in federal funds under the Paycheck Protection Program (PPP). Along with the U.S. Small Business Administration (SBA), the IRS has been heavily involved in all aspects of monitoring and enforcing PPP compliance. While valid PPP loans are tax-exempt, recipients can still face prosecution for taking fraudulent deductions and failing to report income from business activities facilitated by PPP loans.

2. Five Individuals Charged with Submitting False Tax Documents to Secure PPP Loans

On October 22, 2020, IRS-CI announced the indictment of five individuals from Wisconsin and Illinois who are accused of submitting false tax documents in support of multiple PPP loan applications.  According to IRS-CI’s press release, the individuals sought more than $1.1 million in PPP loan funds from multiple banks by submitting applications, “in the names of businesses with no actual operations or employees.”

3. Virginia Man Accused of Fraudulently Obtaining and Improperly Using PPP Loan Funds

On October 20, 2020, IRS-CI announced charges in another PPP loan fraud case in which the defendant is accused not only of submitting falsified payroll records in support of fraudulent PPP loan applications but also of using the PPP loan funds received to buy personal luxury items, including a Lexus vehicle and a Cessna aircraft.

4. California Resident Accused of Fraudulently Obtaining More than $1.2 Million in COVID-19 Unemployment Benefits

In a different type of COVID-19 tax fraud case, on October 18, 2020, IRS-CI announced charges against a man who is accused of fraudulently securing more than $1.2 million in unemployment benefits under the Pandemic Unemployment Assistance (PUA) program established under the CARES Act. Unemployment fraud is a federal crime that frequently entails tax fraud allegations as well.

5. Texas Man Charged with $24 Million COVID-19 Relief Fraud Scheme Involving Falsified Tax Returns

In one of the largest COVID-19 relief fraud cases against an individual to date, on October 9, 2020, IRS-CI announced charges against a Texas man who is accused of fraudulently obtaining more than $24 million in PPP loan funds—and using more than $17 million of those funds to cover “lavish personal expenses.” According to IRS-CI, the man submitted falsified federal tax filings and forged bank statements in order to secure PPP loans from multiple financial institutions.

Are You Under Investigation in Massachusetts for COVID-19 Tax Fraud?

If you have been contacted by IRS-CI in relation to a COVID-19 tax fraud investigation, it is important that you speak with an attorney promptly. To discuss your case with Boston criminal tax lawyer Kevin E. Thorn, Managing Partner of Thorn Law Group, in confidence, call 617-692-2989, email ket@thornlawgroup.com or contact Thorn Law Group online now.

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