Post & Schell, P.C.

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On July 7, 2020, the Department of Treasury’s Financial Crimes Enforcement Network (FinCEN) released its second advisory to financial institutions about detecting and preventing COVID-19 consumer fraud. The guidance provides financial institutions with 18 new red flag indicators to help identify potential imposter and money mule pandemic fraud. FinCEN plans to continue issuing additional advisories about financial crimes related to the pandemic based on evolving trends.  Red Flags of Potential COVID-19 Fraud  FinCEN’s second guidance…
Taxpayers who pay more tax than is due have the right to sue for a refund after exhausting their administrative remedies, and they may file suit either in a district court or in the Court of Federal Claims, as the courts have concurrent jurisdiction. 28 U.S.C. § 1346(a)(1). In addition to recovering the excess tax, taxpayers are entitled to overpayment interest. I.R.C. § 6611(a). Normally, the tax and the interest travel together, but in some…
The IRS has broad investigatory powers, which include the power to issue a summons compelling the production of records, testimony, or both. See I.R.C. § 7602(a)(2). If the recipient of a summons refuses to comply, enforcement proceedings will follow in district court. See I.R.C. § 7604. While the process has a family resemblance to discovery in civil actions under the Federal Rules of Civil Procedure, that can be deceiving, as the IRS has far fewer…
On April 17, 2020, in United States v. Costanzo, No. 18-10291, 2020 U.S. App. LEXIS 12287 (9th Cir. April 17, 2020), the Ninth Circuit upheld the conviction of a defendant under the “sting” money laundering provision, 18 U.S.C. § 1956(a)(3)(B), ruling that the defendant’s bitcoin sales to undercover agents had the requisite effect on interstate commerce as the sales used internet-enabled and cellular network-connected devices. According to the court, the government’s evidence that the…
The COVID-19 pandemic has changed a lot of things, and employment taxes are no exception. To help you understand the present state of employment taxes, I will start by outlining how the employment tax system normally operates. How Employment Taxes Normally Work At each payroll, employers are responsible for a series of taxes: The Federal Insurance Contributions Act (“FICA”) tax on employees, which is deducted from their wages, I.R.C. § 3102(a); The FICA tax on…
The Families First Coronavirus Act (the “Act”) has significant employment law implications, as it imposes new leave provisions under the Emergency Paid Sick Leave Act and the Emergency Family and Medical Leave Expansion Act, summarized here. The Act also has significant employment tax implications. To understand them, some background is in order. Background Employment taxes include taxes collected under the Federal Insurance Contributions Act, or FICA, as well as income tax withholding. Employers are…
In February 2018, Department of Treasury’s Financial Crimes Enforcement Network (FinCEN) and the Office of the Comptroller of the Currency imposed a $185 million civil money penalty on U.S. Bank N.A. (Bank) for willful violations of the Bank Secrecy Act (BSA), including failing to establish and implement an adequate anti-money laundering (AML) program and failing to report suspicious activity. On March 4, 2020, FinCEN imposed a $450,000 civil money penalty on the Bank’s former Chief…
Individuals with a “seriously delinquent tax debt” may face limitations on their ability to travel abroad, as the Commissioner of Internal Revenue can certify the taxpayer’s status to the Secretary of the Treasury, who “shall transmit such certification to the Secretary of State for action with respect to denial, revocation, or limitation of a passport.” I.R.C. § 7345(a). A tax debt is “seriously delinquent” if it is an assessed tax liability of over $53,000 1
In Pennsylvania, charities must meet two overlapping tests to establish their right to a tax exemption. First, the institution must establish that it is a purely public charity within the meaning of Article VIII, Section 2(a)(v) of the Pennsylvania Constitution, which is decided under a multi-factor test announced by the Supreme Court in Hospitalization Utilization Project v. Commonwealth of Pennsylvania, 487 A.2d 1308 (Pa. 1985). Second, the institution must meet the requirements of Act 55,…
The Pennsylvania Constitution requires that taxes be uniform: “All taxes shall be uniform, upon the same class of subjects, within the territorial limits of the authority levying the tax, and shall be levied and collected under general laws.” Pa. Const. Art. VIII, § 1. While conceptually similar to the Equal Protection Clause of the Fourteenth Amendment, Pennsylvania courts apply this uniformity requirement much more stringently. In 2017, the Supreme Court of Pennsylvania held that “a…