2024 IRS Cases in California: Fraud and Non-Filing Penalties

In 2024, several high-profile IRS cases in California highlighted the ongoing issue of tax fraud and non-filing among both individuals and businesses. These cases serve as a stark reminder of the severe consequences of failing to comply with tax laws.


Major Fraud Cases

1. Cryptocurrency Fraud and Misreporting: One significant case involved a San Francisco-based tech entrepreneur who failed to report substantial cryptocurrency gains. The individual had engaged in various cryptocurrency transactions, including mining and trading, but did not report these earnings on their tax returns. This resulted in a multi-million dollar tax evasion case. The IRS’s Criminal Investigation Division (CID) discovered the discrepancy through advanced data analysis and blockchain tracking technology, leading to criminal charges that included fines exceeding $1 million and a prison sentence of five years​ (IRS.gov)​​ (Community Tax)​.

2. Syndicated Conservation Easement Schemes: Another notable case focused on a real estate developer in Los Angeles involved in an abusive syndicated conservation easement scheme. This fraudulent activity involved inflating the value of donated land to claim excessive tax deductions. The IRS cracked down on such schemes as part of their broader efforts to combat abusive tax shelters, resulting in the developer facing substantial fines and penalties along with potential criminal charges​ (IRS.gov)​.


Non-Filing and Underreporting

1. High-Net-Worth Individuals: A prominent case of non-filing involved a wealthy Silicon Valley executive who had not filed tax returns for several years. The executive’s failure to report income from various investments and stock options led to a significant tax liability. The IRS pursued this case aggressively, resulting in a settlement that included paying back taxes, substantial penalties, and interest. This case underscored the importance of timely and accurate tax filings, especially for high-income individuals​ (IRS.gov)​.

2. Small Business Non-Filing: A small business owner in San Diego faced severe penalties for failing to file tax returns and underreporting income. The business, a local construction company, had systematically underreported earnings and failed to remit payroll taxes. The IRS imposed heavy fines, including a 20% accuracy-related penalty and the Trust Fund Recovery Penalty (TFRP), which applies to unpaid payroll taxes. Additionally, the business owner faced potential jail time for fraudulent reporting and tax evasion​ (Community Tax)​.


IRS Enforcement and Preventive Measures

The IRS has intensified its efforts to detect and prosecute tax fraud and non-filing through various measures. These include employing advanced data analytics, increasing the number of audits, and expanding the IRS Criminal Investigation Division. The “Dirty Dozen” list, an annual compilation of the most common tax scams, serves as a public warning to deter fraudulent activities and educate taxpayers about the risks of engaging in such schemes​ (IRS.gov)​​ (IRS.gov)​.


Contact Us

The 2024 cases in California highlight the severe repercussions of tax fraud and non-filing. Both individuals and businesses must remain vigilant and compliant with tax laws to avoid the heavy fines, penalties, and potential criminal charges that accompany such violations. Consulting with tax professionals and maintaining accurate records can help taxpayers navigate the complexities of the tax system and prevent legal issues.

WK Tax Service helps individuals and businesses track their records for business and budgeting purposes as well as for tax purposes. Contact Mike Tavabi today to help get your financial house in order. We are happy to help simplify your life and help you be prepared to file your tax returns on time.

Contact: Mike Tavabi

Company: WK Tax Services

Phone: (310) 539-1068
Fax: (310) 988-2624
Email: mike@wkacctax.com