Justice Department Seizes $500,000 from North Korean Hackers

The Department of Justice (DOJ) was able to restore the funds of hospitals in Kansas and Colorado that had recently been victims of ransomware attacks. The agency seized and returned nearly half a million dollars from North Korean hackers to two hospitals in Kansas and Colorado after they were targeted by the hackers. The hospitals were attached in May 2021 and April 2022 and paid their ransoms in bitcoin. In May 2021 and April 2022, state-sponsored North Korean hackers deployed a new strain of ransomware called “Maui” to lock the servers of two medical centers in Kansas and Colorado.

The medical centers had to respectively pay ransoms of approximately $100,000 and $120,000 in bitcoin to the cybercriminals to regain the use of their computers. The Kansas hospital contacted the FBI, which was then able to trace the cryptocurrency ransom to money-launderers in China. The FBI managed to gain access to the receiving accounts, seize the funds, and eventually return the money to the victim institutions In May 2022. It is not clear where the extra $280,000 seized came from, nor is it clear how bitcoin’s price changes affected the overall amount seized. The statement also did not mention any arrests.

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Former Overland Park businessman sentenced for employment tax fraud

According to court documents and statements that were made in court, starting in 2010, Lance Ashley was the sole owner and operator of Ashley Home Care Services, a home health care business providing daily living services. Ashley was responsible for all financial matters relating to AHCS, including handling payroll and collecting and paying over employment taxes to the IRS. However, between 2013 and 2016, AHCS did not pay all the employee withholdings it collected to the IRS, according to court documents. Ashley used some of the funds to pay corporate expenses and even some of his personal expenses.

After the IRS began collecting AHCS’s unpaid taxes in 2016, Ashley provided fraudulent bank records to the IRS. Ashley’s conduct caused approximately $321,000 of tax loss to the IRS. In addition to imprisonment, Ashley was ordered to serve two years of supervised release and pay approx. $321,000 in restitution to the U.S.

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People without a filing requirement may miss out on a refund if they don’t file a 2021 tax return

Some people may choose not to file a tax return because they didn’t earn enough money to be required to file but may miss getting a refund if they don’t file. While the filing deadline is October 17, 2022 to file 2021 tax returns, the IRS strongly encourages individuals to consider filing electronically sooner, rather than later, especially if they’re due a refund.

Courtesy of the Internal Revenue Service

In most cases, income, filing status and age determine if a taxpayer must file a tax return. Other rules may apply if the taxpayer is self-employed or can be claimed as a dependent of someone else. The Interactive Tax Assistant can help people determine if they need to file a tax return.

Look at tax withheld or paid. Excess tax withholdings are only returned in the form of a refund when someone files a tax return. This can affect students and part-time workers where the tax withheld from their wages is at a rate that is too high. Seniors and retirees who make estimated tax payments or have money withheld from their retirement fund and Social Security disbursements may also be eligible for a refund.

Individuals who answer yes to any of these questions, may be due a refund and must file a tax return to get their money.

  • Did the taxpayer’s employer withhold federal income tax from their pay?
  • Did the taxpayer make estimated tax payments during the tax year?
  • Did they overpay last year on their taxes and have it applied to their 2021 tax?

Here are some valuable credits taxpayers may be able to claim. While most tax credits can be used to reduce the tax owed, there are credits that allow individuals to receive money beyond what they owe.

Recovery rebate credit. Individuals who didn’t qualify for a third Economic Impact Payment or got less than the full amount, may be eligible to claim the 2021 recovery rebate credit and will need to file a 2021 tax return even if they don’t usually file a tax return. The credit will reduce any tax owed for 2021 or be included in the tax refund.

Earned income tax credit. A working taxpayer who earned $57,414 or less last year could receive the EITC as a tax refund. For the 2021 tax year, the tax return taxpayers file in 2022, the earned income credit ranges from $1,502 to $6,728 depending on their filing status and how many children they claim on their tax return. Taxpayers who did not file a return for tax year 2020 or 2021 or who did not claim the earned income tax credit on their 2020 or 2021 return because they had no earned income in those years may file an original or amended return to claim the credit using their 2019 earned income if they are otherwise eligible to do so.

Taxpayers can also use their 2019 earned income to figure their 2021 earned income credit if their 2019 earned income is more than their 2021 earned income. They can check eligibility by using the EITC Assistant on IRS.gov, which is available in eight different languages.

Child tax credit or credit for other dependents. Taxpayers can claim the child tax credit if they have a qualifying child under the age of 18 and meet other qualifications. Other taxpayers may be eligible for the credit for other dependents. This includes people who have:

  • Dependents who are age 17 or older.
  • Dependents who have individual taxpayer identification numbers.
  • Dependent parents or other qualifying relatives supported by the taxpayer.
  • Dependents living with the taxpayer who aren’t related to the taxpayer.

This Interactive Tax Assistant tool on IRS.gov can help people determine if they qualify for these two credits.

Education credits. There are two higher education credits that can reduce the amount of tax someone owes on their tax return. One is the American opportunity tax credit and the other is the lifetime learning credit. The taxpayer, their spouse or their dependent must have been a student enrolled at least half time for one academic period to qualify. The taxpayer may qualify for one of these credits even if they don’t owe any taxes. Form 8863, Education Credits is used to claim the credit when filing the tax return.

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Corporate Officer Has a Nondischargeable Debt from the Company’s Fraud

Upholding the bankruptcy court and the Bankruptcy Appellate Panel, the Tenth Circuit explained when a corporate officer can be saddled with a nondischargeable debt for causing a corporation to defraud a customer.

The debtor provided aircraft sales consultancy services through a corporation of which he was the owner and manager. On behalf of the corporation, he signed a contract for the corporation to represent a family in purchasing an aircraft. 

The debtor identified an aircraft that the purchasers decided to buy. The debtor misrepresented the purchase price, telling his clients that the price was higher than he would be paying. The buyers ended up paying $250,000 more for the aircraft than the debtor paid the seller. The debtor kept none of the $250,000 for himself. Instead, it went to his lawyer and other third parties.

Later, the debtor sued the buyers about the management of the aircraft. In the course of the litigation, the buyers discovered that they had been defrauded in the purchase. So, they counterclaimed.

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SEC Probes Better.com After Lawsuit Alleges Company Misled Investors

The Securities and Exchange Commission is examining whether Better.com violated federal securities laws. Federal securities regulators have requested documents from Better.com and its blank check company Aurora Acquisition Corp. about their business activities, the companies said in filings with the SEC. They also are seeking information about the business activities of Better.com Chief Executive Vishal Garg and allegations made by former executive Sarah Pierce. Pierce alleged in a lawsuit last month that the company misled investors in financial filings and other representations it made as it attempted to go public. Ms. Pierce was Better.com’s former executive vice president for sales and operations. Better.com said at the time that Ms. Pierce’s claims were without merit and it would vigorously defend the lawsuit.

In its filing, the company said it was cooperating with the SEC. Better.com said in a statement that it voluntarily provided all materials requested and that it was “happy to set a high bar for transparency and responsiveness.” Better.com was a winner amid the boom in housing prices and mortgage refinancing that accompanied the pandemic and low interest rates. The company grew revenue nearly 10-fold to $876 million in 2020 from the year prior, posted a profit of $172 million and hired thousands as it rushed to keep up with the market, company filings said. It raised $500 million from SoftBank Group Corp. last year and weeks later said it planned to go public at a valuation of $7 billion.

Better.com since has been struggling by the rise in interest rates and resulting pullback in refinancing, as well as a controversial move in December in which Mr. Garg laid off 900 workers via a Zoom call. The company shed about 7,500 jobs, or 72% of its total workforce, between the end of last year and May.

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Bank of America Fined $225 Million Over Botched Disbursement of State Unemployment Benefits

The Consumer Financial Protection Bureau (CFPB) has fined Bank of America $100 million for botching the disbursement of state unemployment benefits at the height of the pandemic, according to a CFPB press release. Bank of America automatically and unlawfully froze people’s accounts with a faulty fraud detection program. These consumers were then given little recourse despite the fact that there was, in fact, no fraud. This order requires Bank of America to undertake a process that is estimated to result in hundreds of millions of dollars in redress to consumers. A separate order from the Office of the Comptroller of the Currency (OCC) is also fining the bank $125 million. Bank of America has contracts with various state agencies to deliver unemployment and other benefit payments to California consumers electronically through prepaid debit cards and accounts. Under the Electronic Fund Transfer Act, consumers are protected when they use electronic methods to transfer money; this includes prepaid cards. Protections include that after a consumer contacts the financial institution that there has been an error, the financial institution must conduct a prompt, reasonable, and timely investigation.

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COVID-19 Negated Voluntary Quitting

Statutes deny benefits when claimant has voluntarily quit without good cause, meaning that claimant at least “impliedly rejects the employment and the employer by some action such as failing to provide notification of the absence.” Notification of absence occurred when claimant informed a supervisor of illness with COVID-19, and the record shows no other requirement, only repeated attempts by claimant to return to work. “[T]he overwhelming weight of the evidence in the record is that [c]laimant is unemployed through no fault of his own.” Remanded to award benefits.    
George Chavis, Appellant, v. Wal-Mart Associates, Inc., and Division of Employment Security, Respondents.    
(Overview Summary)    
Missouri Court of Appeals, Eastern District – ED110016

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Former Rep. Katie Hill Files for Bankruptcy after Unsuccessful Lawsuit

Former Representative Katie Hill (D-California), who owes hundreds of thousands of dollars to media parties she unsuccessfully sued over the publication of indecent photos while she was in office, has filed for bankruptcy. If successful, this could allow Hill to avoid paying attorney fees to the defendants, including a conservative website, a British tabloid, and two journalists. The financial judgments were rendered in 2021. after a judge dismissed her lawsuit accusing multiple parties of distributing and publishing intimate photos of Hill without her consent. The suit received national scrutiny because it pitted California’s “revenge porn” law against the 1st Amendment. Hill’s attorney said her client is the victim in the case and had no other choice than to file for bankruptcy because of the ruling’s financial toll. Hill said she does not regret filing the suit and called for a federal revenge porn law.

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Right-to-Sue Letter Mandated

The Missouri Human Rights Act authorizes the Missouri Commission on Human Rights to investigate complaints and prosecute violations of the Act. The Act requires the Commission to complete its investigation within 180 days of receiving a complaint, after which the Commission loses all authority except to issue a right-to-sue letter to the complainant, if the complainant requested a right -to-sue letter. The request for a right-to-sue letter before that time is not premature. The duty is ministerial and unresolved issues, like whether the Commission has authority over the facts as alleged, are irrelevant. Circuit court did not err in issuing a writ of mandamus requiring the Commission to issue a right-to-sue letter.    

State of Missouri ex rel. Meredith Green vs. Missouri Commission on Human Rights, et al.    
(Overview Summary)    
Missouri Court of Appeals, Western District – WD84592 and WD84605 

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What taxpayers need to know about business related travel deductions

Courtesy of the Internal Revenue Service

Business travel can be costly. Hotel bills, airfare or train tickets, cab fare, public transportation – it can all add up fast. The good news is business travelers may be able off-set some of those cost by claiming business travel deductions when they file their taxes.

Here are some details about these valuable deductions that all business travels should know.
Business travel deductions are available when employees must travel away from their tax home or main place of work for business reasons. The travel period must be substantially longer than an ordinary day’s work and a need for sleep or rest to meet the demands the work while away.

Travel expenses must be ordinary and necessary. They can’t be lavish, extravagant or for personal purposes.

Employers can deduct travel expenses paid or incurred during a temporary work assignment if the assignment length does not exceed one year.

Travel expenses for conventions are deductible if attendance benefits the business and there are special rules for conventions held outside North America.

Deductible travel expenses while away from home include the costs of:

• Travel by airplane, train, bus or car between your home and your business destination.
• Fares for taxis or other types of transportation between an airport or train station to a hotel, from a hotel to a work location.
• Shipping of baggage and sample or display material between regular and temporary work locations.
• Using a personally owned car for business which can include an increase in mileage rates.
• Lodging and non-entertainment-related meals.
• Dry cleaning and laundry.
• Business calls and communication.
• Tips paid for services related to any of these expenses.
• Other similar ordinary and necessary expenses related to the business travel.

Self-employed or farmers with travel deductions

• Those who are self-employed can deduct travel expenses on Schedule C ,Form 1040, Profit or Loss From Business, Sole Proprietorship.
• Farmers can use Schedule F, Form 1040, Profit or Loss From Farming.

Travel deductions for the National Guard or military reserves
National Guard or military reserve servicemembers can claim a deduction for unreimbursed travel expenses paid during the performance of their duty.

Recordkeeping
Well-organized records make it easier to prepare a tax return. Keep records, such as receipts, canceled checks, and other documents that support a deduction.

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