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August 2, 2015 / 17 Av, 5775
At a Glance

Posts Tagged ‘tax’

IRS $50M Cyber Security Scandal Stretches to Russia

Thursday, May 28th, 2015

A major attack this year by cyber security criminals on the computer network at the U.S. Internal Revenue Service originated in Russia, sources confirmed to Fox News late Wednesday.

The Associated Press has also cited two anonymous sources who reported the IRS believes the hackers are part of a sophisticated criminal operation in Russia. Neither report connected the attack to the Russian government.

But both pointed out that this is not the first time that the IRS has been successfully breached by cyber thieves. Taxpayers whose accounts were accessed will be notified and provided with credit monitoring services, the IRS said.

The IRS inspector-general reported in 2012 hackers managed to manipulate the IRS system into sending 655 tax refunds to a single address in Lithuania. Another 343 tax refunds were sent to another address, this one in Shanghai. Following these attacks, system administrators tweaked the network safeguards to block other hackers.

This year’s attack began sometime in February, according to the report, and continued until mid-May. So far, the thieves have stolen at least $50 million in fraudulent tax refunds. That figure does not include the cost of tracking the breach, nor the expense involved in fixing it and preventing future attempts.

They used a software called “Get Transcript” to access the data. But in order to get into the records, the thieves first had to clear a security screen that required the use of taxpayer information such as a Social Security number, birth date, street address and tax filing number.

According to IRS Commissioner John Koskinen, the hackers used stolen Social Security numbers and other information to gain their access to taxpayers’ accounts. Then they used information from prior tax returns to file current fake returns seeking refunds.

“We’re confident these are not amateurs,” Koskinen told Fox News. “These actually are organized crime syndicates that not only we, but everybody in the financial industry are dealing with.” The IRS estimates that it paid out some %5.8 billion in 2013 to identity thieves, both foreign and domestic.

At least 104,000 taxpayer records dating back up to five years and perhaps more were stolen in the cyber heist, officials said.

The IRS notified the Department of Homeland Security following the breach, a federal law enforcement source said. The Senate Finance Committee has scheduled a June 2 hearing to question Koskinen and Treasury Inspector-General for Tax Administration J. Russell George on the issue.

“When the federal government fails to protect private and confidential taxpayer information, Congress must act,” Senate Finance Committee Chairman Orrin Hatch (R-UT) said Wednesday in setting the hearing.

US Orchestrated Anti-Bibi Bomb May Bite its Backers

Monday, March 16th, 2015

Remember Al Capone?

He was the notorious American gangster who met his downfall by the inelegant and unexciting – but sometimes deadly – U.S. tax code. So, too, may be the ultimate fate of the ubiquitous and well-funded Obama-style campaign machine gunning for Netanyahu, known as V15.

That entity and its creators are barred under US tax law from attempting to achieve its two stated goals: defeating Israeli Prime Minister Netanyahu and changing Israeli law in order to create a Palestinian State.

For some reason the fact that V15 is an avowed effort to oust Netanyahu did not raise enough eyebrows when it was first announced.

The lack of sustained attention back in January caused some to scratch their heads. That V15 was run by the same folks, and in the same style, as U.S. President Barack Obama’s notorious street theater, in your face, take no prisoners-style campaign director, Jeremy Bird; that its financial, emotional and political source received hundreds of thousands of dollars from the U.S. State Department; and even though that same source is an entity which has tax exempt status in the U.S. – which means it cannot fund projects to either support or defeat a political candidate in the U.S. or anywhere else, did not lead to a long media shelf life.

The first two issues should have drawn attention to V15 not because political operatives are barred from selling their strategic skills – that is, after all, the nature of their job – but because it was so odd for someone like Bird to come all the way to Israel to sell his skills. Bird is not Jewish, and his only apparent connection to Israel was working for an anti-Israel American radical activist back in his graduate days.

But who was paying for Bird? Campaign funding is very strictly regulated in Israel. The strategist who managed Obama’s two U.S. presidential campaigns – in which billions of dollars were spent – was likely to have a very high price tag.

Then there was the matter of the U.S. State Department grants to OneVoice, V15’s “creator.” The airy dismissal that all State Department funding ended at the end of November, so there was no U.S. government money being used for the election — which was publicly announced in early December — was, incredibly, accepted without any further interrogation by the American (and most of the Israeli) press corps. Former Naval Intelligence officer J.E. Dyer  pursues that angle with the kind of tenacity one should be able to expect from the seasoned press corps members who show up nearly every day at State Dept. briefings.

But the least interesting angle, at least to most, is the one that involves the Internal Revenue Service. Before your eyes glaze over, recall that the U.S. actually had what could almost be called a juicy scandal beginning nearly two years ago, that involved the IRS.

Quite a few politically conservative (and one pro-Israel) organizations claimed that the IRS was treating their applications for tax-exempt status in a discriminatory fashion. The initial response from the IRS was that many of those groups were not really entitled to tax-exempt status, because they were engaged in political, not educational or charitable, work.

That seemed to many like a reasonable response. The Internal Revenue Code states that even a non-profit organization cannot be exempt from paying taxes, and its donors will not be entitled to tax deductions, if the organization is involved in politics or lobbying.

But while much of the IRSGate attention has since focused on where are Lois Lerner’s emails and whether they are really gone forever or just deleted, hidden or irrelevant, the fact that tax-exempt organizations cannot engage in raw politics seemed to be one tiny aspect of American government that many people learned.

Tax Authorities Raid Lulav and Etrog Street Vendors

Tuesday, September 17th, 2013

Israeli tax official surprised hundreds of Lulav and Etrog vendors around the country on Monday when they began a secret operation to determine if the sellers were reporting their sales, providing receipts, and paying taxes on revenues from their booths.

Vendors report that they don’t remember a raid like this ever happening before.

Lulav and Etrog sales are primarily a cash business, and they are sold by vendors, often teenagers, who set up tables and booths on streets throughout Israel before the Sukkot holiday. The business itself is more complicated with a group importers and distribution centers providing the majority of the temporary street vendors with their products.

Sukkot’s Lulav and Etrog sales is a multi-millions dollar industry.

Rabbi Sacks Attacking PM, Multiculturalism

Monday, August 19th, 2013

Britain’s chief rabbi, Lord Sacks, is blaming British Prime Minister David Cameron for failing to do enough to boost marriages in the UK, and saying multiculturalism in Britain has “had its day,” The Times reported.

Rabbi Sacks said Cameron should recognize marriage in the tax system and do more to support stay at home mothers.

“I think the government has not done enough,” he said. “Although I don’t take a political stance … I don’t think the government has done enough at all.”

Rabbi Sacks, who retires next month after 22 years, said the estimated £9 billion-a-year cost of family breakdown and “non-marriage” meant the state has a direct interest in promoting marriage.

Rabbi Sacks also said multiculturalism in Britain had led to “segregation and inward-looking communities.”

Comparing it to a hotel where “nobody is at home,” he said: “It doesn’t belong to anyone, we’ve each got our own room and so long as we don’t disturb the neighbors we can do whatever we like.”

Teva to Sell Generic Viagra in UK, and Move Patent Filing to Switzerland

Sunday, June 23rd, 2013

Teva, the world leader in generic medication will be soon be launching a generic version of Pfizer’s Viagra in the UK and Europe.

Pfizer’s Viagra patents expired this past week in the UK and parts of Europe, allowing other manufacturers to move in.

In the US, a court ruling has prevented Teva from introducing generic Viagra until at least 2020.

Teva also announced that it will stop filing its patents in Israel, and will now be filing them instead in Switzerland.

The reason for the move are Switzerland’s patent related tax laws, and subsequent tax breaks and benefits they will provide Teva.

Teva said that if Israel were to change its tax codes to make them more competitive with other countries, they’d be happy to move the IP registrations back to Israel, according to a report in Globes.

VAT Tax Up

Sunday, June 2nd, 2013

Israeli VAT tax went up 1% to 18% on Saturday night. It’s now at its highest level in a decade. The government expects the tax hike will raise an additional NIS 4.4 billion a year in revenue, assuming the economy stays strong.

The price of gasoline also rose to NIS 7.52 for 95 octane. This is due to the rising price of imported gas.

The government found itself in a large deficit for two primary reasons.

It bet again on the viability of implementing a two year fiscal plan, but that didn’t work out as well as it did the first time around, when costs were higher, and revenue was lower than expected.

The second reason is that the government gave money away in the form of free dental care for children, free nursery school, and other perks, in response to the summer social protests, and now it has to pay for the debt those perks incurred.

IRS Punished Conservative Non-Profits, Perhaps Also Pro-Israel Groups

Saturday, May 11th, 2013

For more than a year the U.S. Congress has been investigating whether the Internal Revenue Service was inappropriately treating conservative groups seeking tax-exempt status, or burdening such groups with requests and demands which are impermissible, as many had claimed.

Friday, May 10, the IRS person in charge of the division dealing with non-profits, Lois Lerner, apologized for actions taken by the agency which were based on political affiliation.

“That was absolutely incorrect, it was insensitive and it was inappropriate. That’s not how we go about selecting cases for further review,” Lerner said at a conference sponsored by the American Bar Association.

“The IRS would like to apologize for that,” she added.

How did the IRS do this?  By singling out dozens of organizations for additional reviews because they included the words “tea party” or “patriot” in their exemption applications, Lerner admitted.

The Ways and Means Committee has been seeking information on precisely this activity and “the IRS repeatedly denied they were targeting conservative grassroots organizations,” said committee chair Dave Camp (R-MI) in response to the revelation.  He announced  that the committee will soon hold hearings on this now-admitted practice by the IRS.

Camp stated in a press release issued just after the admission of wrongdoing by the IRS, “The IRS absolutely must be non-partisan in its enforcement of our tax laws. The admission by the agency that it targeted American taxpayers based on politics is both shocking and disappointing. The Committee on Ways and Means will thoroughly investigate this matter and will soon hold a hearing to get to the bottom of this situation.  We will hold the IRS accountable for its actions.”

PRO-ISRAEL GROUP SUED IRS CLAIMING TARGETING PRACTICE

While they are at it, the committee might want to ask the IRS whether their list of targets extended beyond political party discrimination. There is evidence the IRS also targeted pro-Israel groups whose positions were potentially inconsistent with the administration’s.

For example, in 2010, the passionately pro-Israel organization Z STREET filed a lawsuit against the IRS, claiming it had been told by an IRS agent that because the organization was “connected to Israel,” its application for tax-exempt status would receive additional scrutiny.  This admission was made in response to a query about the lengthy reveiw of Z STREET’s tax exempt status application.

In addition, the IRS agent told a Z STREET representative that the applications of some of those Israel-related organizations have been assigned to “a special unit in the D.C. office to determine whether the organization’s activities contradict the Administration’s public policies.”

Z STREET’s lawsuit claims the IRS activity constitutes viewpoint discrimination and a violation of its constitutionally protected right of free speech.  The organization is seeking, among other things, complete disclosure to the public regarding the origin, development, approval, substance and application of the IRS policy to treat pro-Israel organizations differently than it does other organizations. (disclosure: this reporter was the founder and president of Z STREET when the litigation was filed.)

At least one purely religious Jewish organization, one not focused on Israel, was the recipient of bizarre and highly inappropriate questions about Israel.  Those questions also came from the same non-profit division of the IRS at issue for inappropriately targeting politically conservative groups. The IRS required that Jewish organization to state “whether [it] supports the existence of the land of Israel,” and also demanded the organization “[d]escribe [its] religious belief system toward the land of Israel.”

For years the IRS has denied it took any such inappropriate actions and has done its best to prevent Z STREET from pursuing its claim of viewpoint discrimination. The IRS even took the position that because Israel is a country “where terrorism happens,” the service was justified in taking additional time to determine whether Z STREET was involved with funding terrorism.  Z STREET is a purely educational organization that has never funded anything, either in Israel or anywhere else.

Coincidentally, after two and a half years of non-movement, the very first hearing in Z STREET v IRS was recently scheduled for the afternoon of Tuesday, July 2, in the Federal District Court of the District of Columbia.

Representatives of several tea party groups rejected the apology offered by the IRS, and insist that steps be taken to prevent such blatant discrimination in the future.

Printed from: http://www.jewishpress.com/news/irs-punished-conservative-non-profits-perhaps-also-pro-israel-groups/2013/05/11/

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