The IRS pockets $122 million from wealthy tax fraudsters who cheated the system to run “sham” businesses, build massive mansions and buy Ferraris.
The Internal Revenue Service’s “historic” campaign against rich tax evaders is beginning to bear fruit.
Last month, the federal tax agency recovered $122 million from 100 cases of blatant tax evasion by some of the wealthiest — and apparently greedy — individuals in the country.
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The IRS shared some shocking examples of tax evasion cases that have been closed — including a man who was sentenced to 54 months in federal prison for creating a sham business to obtain $5 million in coronavirus relief loans, which he then used to buy Ferraris, Bentleys and Lamborghinis.
Brazen tax evasion
One of the most shocking cases closed by the IRS in September involved a former CEO, who was sentenced to a year in prison and ordered to pay more than $15 million in restitution after he misrepresented millions of dollars in personal expenses as deductible business expenses.
The wealthy tax evader used his illegal proceeds to build a 51,000-square-foot mansion, complete with an outdoor pool and a pool house; Tennis, basketball and bocce courts. His greed did not stop there. The IRS found that he falsified millions of dollars in expenses to purchase luxury cars, artwork, country club memberships and homes for his children.
Another case targeted a restaurant owner who filed false tax returns and stole more than $670,000 from his company. He then spent $502,000 of his illegally obtained money on gambling.
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A historic crackdown on tax fraud
These high-end collection cases are part of an IRS sweep targeting 1,600 millionaires who owe hundreds of millions of dollars in taxes — in an effort to “restore fairness in tax compliance.”
Using federal funding granted through the Inflation Reduction Act, the IRS targets high-income earners who each owe at least $250,000 in back taxes, and large business partnerships with assets of about $10 billion on average — including trusts. Hedging, real estate investment partnerships, and large corporations. Law firms and other industries – and promoters who abuse the country’s tax laws.
“Prior to the ACA, more than a decade of budget cuts prevented the IRS from keeping up with the increasingly sophisticated methods used by wealthy taxpayers to hide their income and evade paying their fair share of taxes,” IRS Commissioner Daniel Werfel said. He told reporters, Business Insider reported.
“Funding the Inflation Tax Act gives us the ability to take quick and decisive action to improve compliance and close the tax gap.”
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