2018 – 02/06

Fraud doesn’t pay. Companies must report income from business activities and can deduct bona fide related expenses on their tax returns. But the president of a software limited liability company (LLC) was charged fraud penalties after the IRS examined her records. The U.S. Tax Court found “clear and convincing evidence” that she’d “scrupulously concealed” transactions, including using LLC credit cards to pay her husband’s business expenses, understating income by failing to report payments, and giving the IRS a bogus accounts receivable ledger. (TC Memo 2018-9)


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