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TaxBuzz Top 5 - Sam Bankman-Fried Faces 110 Years In Prison, IRS Wins Major Court Case, & More

TaxBuzz Top 5 - Sam Bankman-Fried Faces 110 Years In Prison, IRS Wins Major Court Case, & More

Each Friday, TaxBuzz brings you the top five tax and accounting headlines you need to know from the workweek. We know life can get busy and you don't always have time to scroll through your news feed to stay informed.

We weed through all of the week's stories to showcase the most important updates in the tax and accounting world.

1. Sam Bankman-Fried Found Guilty on 7 Counts of Fraud

Credit: Craig Barritt/Stringer/Getty Images

Dethroned cryptocurrency wunderkind, Sam Bankman-Fried, 31, has been found guilty on 7 counts of fraud for his role in the collapse of defunct crypto exchange, FTX. 

CNN Business noted that Bankman-Fried "looked sunken" as his verdict was delivered on Thursday, November 2. The outlet also shared a statement from lead defense attorney Mark Cohen, “We respect the jury’s decision. But we are very disappointed with the result. “Mr. Bankman Fried maintains his innocence and will continue to vigorously fight the charges against him.”

U.S. US Attorney Damian Williams, on the other hand, applauded the jury, stating that government has “no patience” for this type of new cryptocurrency corruption.

Earlier this year, Bankman-Fried was also accused of accepting a $40 million bribe from a Chinese national. His original arrest came in December 2022, when he was taken into custody in the Bahamas following the stunning dismantling of his FTX cryptocurrency trading platform and hedge fund.

Bankman-Fried faces 110 years in prison.

2. IRS Wins $110 Million Liberty Global Court Case

This week, the IRS won a major $110 million court case involving telecom company, Liberty Global. Per a syndicated Wall Street Journal report, this legal win "will help the tax agency combat aggressive corporate tax maneuvers and collect more money from other companies."

At the heart of this case was a Liberty Global strategy referred to as “Project Soy." The company used this maneuver to seek a refund by exploiting a gap in the 2017 tax code. Judge R. Brooke Jackson of the U.S. District Court in Colorado wrote in her decision, “It appears that the only substantial purpose of the transaction was tax evasion."

The legal community and the tax community alike have had eyes on the Liberty Global case, which has served as a litmus test for the IRS's to successfully go after large corporations and partnerships by "attacking transactions as being purely tax-motivated." In recent months, the IRS has vowed to go after major companies and wealthy individuals with more fervor thanks, in part, to the rise of AI technology that has made it easier to find anomalies on tax returns.

3. New Arizona Tax Rebate Could Give Families Up to $750

Credit: DustyPixel/Getty Images

Arizona Governor Katie Hobbs (D) has rolled out a new tax rebate that could put up to $750 back in families' pockets. In a statement, Ms. Hobbs said, "I made a promise that when I took office, I would take every opportunity I had to make it easier for Arizonans to provide for their families and lower the cost of living. I am so pleased to be able to deliver this relief with the Arizona Families Tax Rebate."

If you are a resident of Arizona interested in seeing if you qualify for this rebate, visit this official FAQ page.

FOX 10 Phoenix notes that eligible recipients will receive $250 for every claimed dependent who is under the age of 17 and $100 for every claimed dependent over the age of 17, based on their 2021 income tax returns. The maximum credit, as previously stated, is $750. 

It is worth noting that former residents who have since moved to a new state can still qualify if they meet all other requirements and resided in Arizona during the 2021 tax year. 

4.  IRS Confirms Retirement Contribution Limits Will Rise In 2024

The IRS has confirmed that retirement contribution limits will rise in 2024. In an official release, the federal tax agency shared that the threshold for "annual contributions to an IRA increased to $7,000, up from $6,500. The IRA catch‑up contribution limit for individuals aged 50 and over was amended under the SECURE 2.0 Act of 2022 (SECURE 2.0) to include an annual cost‑of‑living adjustment but remains $1,000 for 2024."

In addition, IRS authorities noted that the "catch-up contribution limit for employees aged 50 and over who participate in 401(k), 403(b), and most 457 plans, as well as the federal government's Thrift Savings Plan remains $7,500 for 2024. Therefore, participants in 401(k), 403(b), and most 457 plans, as well as the federal government's Thrift Savings Plan who are 50 and older can contribute up to $30,500, starting in 2024. The catch-up contribution limit for employees 50 and over who participate in SIMPLE plans remains $3,500 for 2024."

To find out how this change -- and other changes resulting from the SECURE 2.0 Act of 2022 -- could impact your personal financial situation, contact your tax professional. 

5. Bill Aims to Block Certain Foreign Enterprises From Receiving EV Credits

Credit: Tetra Images/Getty Images

A new federal bill, presented by U.S. Representatives John Moolenaar (R-MI) and Darin LaHood (R-IL), aims to block certain foreign enterprises fro receiving the electric vehicle (EV) credits that were laid out in the Inflation Reduction Act.

Specifically, this legislation was written in response to Gotion Inc., an American subsidiary of a Chinese company. Gotion has plans to construct EV battery materials in factories near Big Rapids, Michigan and in Manteno, Illinois. The company would potential qualify for IRA credits under current law.

The Detroit News shared that Moolenaar and LaHood's bill is noteworthy because these credits are a "major reason why foreign-owned companies such as Gotion are investing in U.S.-based factories."

The bill is called the "Official Giveaways Of Taxpayers’ Income to Oppressive Nations (NO GOTION) Act", and would make from green energy tax credits unavailable to "any entity created or organized in, or controlled (in the aggregate) by, one or more countries of concern."

"Countries of concern" are defined as China, Russia, Iran and North Korea.

Which headline this week is most interesting to you?

Feature Image Credit: Alex Wong/Getty Images

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Rebekah Barton

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