Tax Tips: IRS Criminal Investigation releases updated COVID fraud statistics on 4th anniversary of CARES Act; nearly $9 billion investigated
WASHINGTON – Four years after the enactment of a key pandemic-era law, the Internal Revenue Service released updated numbers showing Criminal Investigation (CI) has investigated 1,644 tax and money laundering cases related to COVID fraud potentially totaling $8.9 billion, with well over half that amount coming from cases opened in the last year.
These cases include a wide range of criminal activity, including fraudulently obtained loans, credits and payments meant for American workers, families and small businesses under the Coronavirus Aid, Relief and Economic Security (CARES) Act.
As of Feb. 29, 795 people have been indicted for their alleged COVID-related crimes and 373 individuals have been sentenced to an average of 34 months in federal prison. During the last four years, CI has obtained a 98.5% conviction rate in prosecuted COVID fraud cases.
“The work by IRS Criminal Investigation provides a vital role in protecting against fraud and serves a key part in the agency’s wider efforts to ensure fairness in the nation’s tax system,” said IRS Commissioner Danny Werfel. “Protecting taxpayers against fraud in pandemic-era programs is just one example of the important role that CI plays in the law enforcement community. A healthy budget for the IRS helps us get the job done, and the work of CI provides a critical safety net to protect the nation against fraud.”
Looking ahead, CI’s ongoing fraud-protection work will be bolstered by the additional funding the IRS received through the Inflation Reduction Act, which is providing the agency with additional resources to ensure fair enforcement of the laws as well as improved taxpayer service, new technology and wider IRS transformation efforts.
“In the last year alone, we have opened nearly 700 new COVID fraud investigations that collectively add up to $5 billion in potential fraud,” said CI Chief Guy Ficco. “While COVID may no longer be top of mind to the average American when they wake up, the fraud committed through these different programs is very much top of mind to CI. Our special agents continue to seek out fraudsters who stole money from government loan programs for their personal gain.”
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Tax Tips: Where’s My Refund tool makes it easy to track the status of a federal tax return
Taxpayers can check the status of their refund easily and conveniently with the IRS Where's My Refund tool at IRS.gov/refunds.
Refund status is available within 24 hours after the taxpayer e-filed their current year return. The tool also gives the taxpayer a personalized refund date after the IRS processes the return and approves the refund.
Where’s My Refund tool updates
Recent updates to the tool mean fewer taxpayers will need to call the IRS. These include:
• Messages with detailed refund status in plain language.
• Notifications that tell taxpayers whether the IRS needs additional information.
How to get started with Where's My Refund
To use the tool, taxpayers need their:
• Social Security number or Individual Taxpayer Identification number.
• Filing status.
• Exact amount of the refund claimed on their tax return.
Status of refunds
The tool shows three statuses:
• Return received.
• Refund approved.
• Refund sent.
When the status changes to "refund approved," the IRS is preparing to send the refund, either as a direct deposit to the taxpayer's bank account or directly to the taxpayer by a check in the mail to the address on their tax return.
When to check for status changes
Taxpayers don't need to check their refund status more than once a day. The IRS updates Where's My Refund overnight in most cases. Calling the IRS won't speed up a tax refund. The information available on Where's My Refund is the same information available to IRS telephone assistors. Taxpayers should allow time for their bank or credit union to post the refund to their account or for it to arrive in the mail.
Timing of refunds
The IRS issues most refunds in fewer than 21 days. Some tax returns require more time to review, and this can delay a refund. It takes longer to process a return if:
• The tax return has errors, requires additional review or is incomplete.
• The return needs a correction to the Earned Income Tax Creditor Additional Child Tax Credit.
• The taxpayer filed their tax return on paper.
• The taxpayer filed an injured spouse
The IRS will contact taxpayers by mail if more information is needed to process a return.
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Tax Tips: What taxpayers need to know about digital asset reporting and tax requirements
Taxpayers filing 2023 tax returns must check a box indicating whether they received digital assets as a reward, award or payment for property or services or disposed of any digital asset that was held as a capital asset through a sale, exchange or transfer.
A digital asset is a digital representation of value that is recorded on a cryptographically secured, distributed ledger or any similar technology. Common digital assets include virtual currency and cryptocurrency, stablecoins and non-fungible tokens.
Examples of digital assets transactions include:
• Sale of digital assets.
• Receipt of digital assets as payment for goods or services.
• Receipt of new digital assets because of mining and staking activities.
• Receipt of new digital assets because of a hard fork.
• Exchange of digital assets for property, goods or services.
• Exchange or trade of digital assets for another digital asset(s).
• Any other disposition of a financial interest in digital assets.
Reporting digital assets transactions
Taxpayers must report all income related to their digital asset transactions.
• Use Form 8949, Sales and other Dispositions of Capital Assets, to calculate a capital gain or loss and report it on Schedule D (Form 1040), Capital Gains and Losses.
• If the transaction was a gift, file Form 709, United States Gift (and Generation-Skipping Transfer) Tax Return.
• If individuals received any digital assets as compensation for services or disposed of any digital assets they held for sale to customers in a trade or business, they must report the income as they would report other income of the same type. For example, they would report W-2 wages on Form 1040 or 1040-SR, line 1a, or inventory or services on Schedule C.
• If an employee was paid with digital assets, they must report the value of assets received as wages. Similarly, if they worked as an independent contractor and were paid with digital assets, they must report that income on Schedule C (Form 1040), Profit or Loss from Business (Sole Proprietorship). Schedule C is also used by anyone who sold, exchanged or transferred digital assets to customers in connection with a trade or business.
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