Wednesday, January 30, 2019

Lesson From Congress: Overbearing Oversight?

When Russell Baker imagined his own death for The New York Times in 1979, it was because he’d just experienced something delightfully unsettling while taking a walk near his apartment on 58th Street. There he was, about to reenter the building, when something huge splatted on the sidewalk at his feet.
Once you start making money, writing becomes work and ceases to be fun, said Russell Baker, who died last week. But “when writing is fun, it’s not very good"... Dilemmas of Cold River

Terraces before towers: Sydneysiders want more medium-density housing

As debate rages over residential development in Sydney, new polling shows widespread support for more terraces and townhouses.

NSW Liberal MPs have heaped praise on Premier Gladys Berejiklian, as a new poll revealed minority government is on the cards at March's state election.

Ministers defend Gladys Berejiklian as Newspoll predicts NSW election to deliver minority government

Scott Morrison’s economic pitch straight from Fawlty Towers – just don’t mention the recession

Tax Administration in a Digital Age: The Australian experience - ATO

Speaker Second Commissioner Neil Olesen - UNSW Business School


Why paper maps still matter in the digital age The Conversation

Hartford - Expert opinion: transfer pricing not necessarily illegal activity

Reminder of Key Differences Between Civil Fraud Penalties 

I picked up an offering, with a good reminder for Tax Crimes enthusiasts, from Procedurally Taxing Blog's regular reporting of Tax Court designated orders.  Samantha Galvin (Guest Blogger), The Tax Court’s Tenacious Stance on 280E: Designated Orders 12/17/2018 – 12/21/2018 (Procedurally Taxing Blog 1/17/19), here.

D.C. Circuit Rejects Defendant's Post Conviction Claims of Selective Prosecution, Actual Innocence and Attorney Conflict

Court Applies Willful Blindness and Rejects Reliance on Friends Defense to FBAR Willful Penalty but Relieves Wife for One Year 

Lesson From Congress: Overbearing Oversight?

Senate_budget_committeeToday’s lesson comes from Congress.  It is a primer on IRS oversight.  It was prompted by an amazing letter I found buried on my desk.  

In an October 2015 hearing, House Ways and Means Committee member Diane Black questioned then IRS Commissioner John Koskinen about the lack of IRS responses to 10 GAO oversight recommendations from July 2015. 

On October 23, 2015, Koskinen sent her a letter.  The letter explained the status of the 10 oversight recommendations.  It then also explained the status of 200 additionalrecommendations from the prior three years, recommendations the IRS had also not responded to.  Of the 210 total, 167 had not yet reached their original due dates for responsive actions.  The other 43 were late but had received extensions from the oversight bodies who had made the recommendations: the Government Accountability Office (GAO) and the Treasury Inspector General for Tax Administration (TIGTA). 

The number 210 is not the amazing part.  The amazing part is that the letter explained that during that same three-year period, the IRS has dealt with some 1,240 oversight recommendations just from GAO and TIGTA.  That number does not even include the myriad directives and orders from various Congressional oversight committees, nor the yearly Congressional-mandated oversight from the National Taxpayer Advocate.  Thinking about the FTE’s needed to address just these 1,240 recommendations makes me dizzy. 

Lesson From Congress: Overbearing Oversight?

Brexit and the future of tax havens

Facebook Graph Search Operators – Collated by Paul Myers

See also from the same author – How to use Facebook Graph Search – “Experienced researchers know that Facebook’s search box has very limited and unpredictable functionality. However, there are tricks that can be used to squeeze a better search out of the world’s most popular social network.


    The ATO has advised [ATO Presser] that a Manly man was on 25 January 2019 sentenced to 6 years' jail in the NSW District Court for GST fraud relating to illegal phoenix activity in the property and construction industry. He was also ordered to pay reparations of more than $1.8 million.

    The ATO said the man was convicted after an ATO investigation found he had structured his companies to fraudulently obtain GST credits and failed to report property sales to avoid paying GST, causing a loss to the Commonwealth of $3.4 million.

    Between 2008 and 2011, the ATO said the man lodged false BASs on behalf of 9 companies of which he became the sole director, using the money he obtained to fund the purchase of luxury items including a marina at Lake Macquarie, a catamaran and a unit to live in. The funds were also used to meet expenses incurred during the course of developing 5 beachfront luxury apartments in Manly, the ATO said.

    According to the ATO, the man reported his companies' expenditure was more than $24 million and claimed more than $2.2 million in GST refunds. To justify his GST refund claims, the man:

    1. created false invoices that showed related companies provided project management services

    2. produced fraudulent invoices for the purchase of high-value excavators, trailers, trucks and catamarans.

    He also failed to report the sales of the Manly apartments on which he should have paid GST of more than $1.5 million, the ATO said.

    ATO Assistant Commissioner Aislinn Walwyn said the case "exhibits classic illegal phoenix behaviour. Companies were deliberately liquidated to avoid paying creditors and taxes. New companies continued operating the same or a similar business with the same ownership."