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Ex-IRS Agent Accused of Filing Error-Filled Returns, Costing $42M in Lost Taxes

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By Annette Cary, Tri-City Herald, Kennewick, Wash. (TNS)

A Kennewick tax preparer cost the United States $42 million in lost tax revenue between 2017 and 2020 after filing tax returns that were riddled with errors, fabrications and fraudulent entries, alleges the Department of Justice.

The Department of Justice filed a civil complaint in Eastern Washington District U.S. Court on Tuesday asking a judge to ban Donald J. Taylor from preparing federal tax returns or owning or operating a tax return preparation business.

“Many customers now face large income tax deficiencies and may be liable for sizable penalties and interest,” after Taylor understated their tax liability or inflated their refunds, according to a court document.

The IRS is identifying his customers, determining their correct tax liabilities, pursuing refunds that were erroneously issued and collecting additional taxes and penalties, according to a court document.

The complaint also asks that U.S. Judge Stanley Bastian require Taylor to pay the U.S. government fees and payments he received from customers for whom he prepared tax returns with false or fraudulent claims.

If Taylor is not barred from preparing tax returns or doing related business, he is likely to continue his behavior, the Department of Justice said in the complaint.

It pointed out that Taylor was issued penalties totaling $62,250 for reckless or willful understatement of tax liability on the returns or refund claims of his customers from 2007 to 2010, but it said that did not deter him from continuing to prepare tax returns with allegedly fraudulent claims.

“Taylor’s conduct is more serious because he was previously employed by the IRS,” said the court complaint. “As part of his training, he would have known of a return preparer’s duty of due diligence, and the consequences of failing to discharge that obligation.”

He worked for the IRS investigating and auditing taxpayers from 2002 through 2008, according to a court document.

In 2009 he entered the private accounting practice of Thomas M. Owen, CPA, at 100 N. Morain St., Kennewick. As a tax manager and tax preparer he prepares tax returns without supervision or review there, according to a court document.

The Department of Justice accuses Taylor of taking advantage of the differences between running a business as a sole proprietorship and an S corporation.

A sole proprietor reports any income and expenses on their individual tax returns, while an S corporation reports income, deductions and loss on a corporate tax return and includes separate forms for shareholders in the company to report income and losses on their own tax returns.

He abused the S corporation requirements to reduce customers’ tax liabilities, according to the Department of Justice.

That included decreasing the amount of wages that employees received and reporting the money as corporation distributions to them to reduce their tax liability, according to the Department of Justice. He also fabricated business deductions and reported improper deductions, the Department of Justice said.

Accusations of fraudulent tax deductions

The complaint filed against Taylor details issues with tax returns he prepared for 10 businesses.

Among the many allegations in the complaint are:

  • Claiming unsubstantiated business deductions for one business that owns no vehicles or assets, including $6,710 in vehicle expenses, $29,186 for repairs and maintenance, and $22,366 for insurance.
  • Claiming $3,557 in office expenses for two years for a business, when the tax preparation customer said only $76 was spent.
  • Expensing $67,471 in depreciation for three vehicles, knowing that the vehicles were privately owned rather than owned by the company.
  • Reporting that a business owned a building and land worth $90,000 and had a mortgage of nearly that much, then taking a depreciation deduction of $2,545, and also claiming a $17,577 deduction for a new roof. However, he knew the company did not own the business or land and had no mortgage, according to the customer who hired him for tax preparation.

Taylor prepared 779 returns for S corporations between tax years 2017 and 2020.

The Department of Justice concluded there was a 96% error rate on those returns to reach its conclusion of $42 million in tax harm to the federal government, according to a court document.

His alleged conduct also harmed the public by undermining public confidence in the federal tax system an encouraging widespread violations of tax laws, according to the complaint.

“Taylor’s illegal conduct also causes intangible harm to honest tax return preparers, because by preparing returns that falsely or fraudulently inflate the customers’ refunds, Taylor gains an unfair competitive advantage over tax return preparers who prepare returns in accordance with the law and who as a result may have fewer customers,” the complaint said.

Federal court documents do not yet list an attorney for Taylor.

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(c)2024 Tri-City Herald (Kennewick, Wash.). Visit Tri-City Herald (Kennewick, Wash.) at www.tri-cityherald.com. Distributed by Tribune Content Agency, LLC.

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Leaders

Mark Cuban is The Maverick Entrepreneur Changing Business and Beyond

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Mark Cuban's journey embodies the American entrepreneurial spirit

From selling garbage bags door-to-door as a child to becoming a billionaire tech pioneer and beloved “Shark,” Mark Cuban’s journey embodies the American entrepreneurial spirit. His straight-talking approach and business acumen have made him one of the most recognizable business figures of our time.

Early Life and Education

Born in Pittsburgh on July 31, 1958, to working-class parents, Cuban learned the value of hustle early. His grandfather, a Russian immigrant, sold merchandise from the back of his car—perhaps planting the entrepreneurial seed that would define Cuban’s future.

After graduating from Indiana University in 1981 with a degree in business, Cuban didn’t follow a traditional career path. Instead, he moved to Dallas with just $60 in his pocket, sleeping on the floor of a friend’s apartment while working as a bartender.

Building His Fortune

Cuban’s first major success came in 1990 when he sold his computer consulting firm, MicroSolutions, for $6 million. However, his true financial breakthrough arrived during the internet boom of the 1990s. Cuban and his business partner Todd Wagner founded Broadcast.com, an internet radio company that streamed audio of sports events and other content.

In 1999, Yahoo acquired Broadcast.com for $5.7 billion in stock—a deal that instantly made Cuban a billionaire and cemented his place in tech history.

The Dallas Mavericks Era

In 2000, Cuban purchased a majority stake in the NBA’s Dallas Mavericks for $285 million. Under his passionate and sometimes controversial leadership, the team transformed from a struggling franchise into NBA champions in 2011.

Unlike traditional team owners, Cuban sits courtside at games, openly criticizes referees, and maintains close relationships with players. His hands-on approach revolutionized NBA ownership culture and turned the Mavericks into a billion-dollar franchise.

Beyond Business: Media and Philanthropy

Cuban’s charismatic personality made him a natural fit for television. Since 2011, he has been a main investor on ABC’s “Shark Tank,” where his no-nonsense approach and investment savvy have helped launch numerous successful startups.

Behind the public persona lies a dedicated philanthropist. The Mark Cuban Foundation supports various causes, including entrepreneurship programs for at-risk youth and research into treating rare diseases. Following the COVID-19 pandemic, Cuban launched Cost Plus Drugs, aiming to dramatically reduce prescription medication prices for millions of Americans.

Looking Forward

Today, Cuban continues to disrupt industries through his forward-thinking investments in AI, cryptocurrency, and healthcare. Despite his billions, colleagues describe him as remarkably approachable and genuinely passionate about helping entrepreneurs succeed.

Cuban remains focused on making healthcare more affordable through Cost Plus Drugs and exploring new frontiers in digital technology. His commitment to transparency in business practices and creating opportunities for others forms the cornerstone of his ongoing legacy.

For aspiring entrepreneurs, Cuban’s advice remains consistent: follow your passion, outwork the competition, and always be learning. As he often says, “Work like there is someone working 24 hours a day to take it all away from you.”

Mark Cuban’s journey from selling garbage bags to building a multi-billion-dollar empire proves that with determination, innovation, and a willingness to challenge the status quo, extraordinary success is possible.

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Technology

Quantum Computing is Transforming Industries, Security, and Future Technologies

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Quantum Computing is Transforming Industries, Security, and Future Technologies

Quantum computing is rapidly emerging as one of the most transformative technologies of the 21st century. Unlike classical computers, which use bits to process information as either 0s or 1s, quantum computers leverage qubits, allowing them to exist in multiple states simultaneously. This property, known as superposition, along with entanglement and quantum tunneling, enables quantum computers to solve complex problems exponentially faster than traditional systems. As this technology advances, industries across the board are exploring its potential to revolutionize computing, security, and data processing.

Real-World Applications of Quantum Computing in Industries

Several industries are already benefiting from quantum computing’s capabilities. In healthcare, quantum algorithms are accelerating drug discovery by simulating molecular structures at an unprecedented scale, significantly reducing the time required for pharmaceutical research. Financial institutions are leveraging quantum computing to optimize trading strategies, portfolio management, and risk assessment. In manufacturing, quantum simulations enhance material science, leading to the development of stronger and more efficient materials. The logistics sector is also utilizing quantum computing to optimize supply chain management, reducing operational costs and improving efficiency.

Key Developments from Tech Giants in Quantum Research

Leading technology companies such as Google, IBM, Microsoft, and Intel are at the forefront of quantum computing research. Google made headlines with its claim of achieving quantum supremacy in 2019 when its quantum processor completed a calculation in 200 seconds that would take a classical supercomputer thousands of years. IBM continues to advance its quantum computing roadmap with cloud-accessible quantum computers and the development of a 1,000-qubit processor. Microsoft is investing heavily in topological qubits, a novel approach aimed at creating more stable quantum processors. Meanwhile, Intel is working on silicon-based quantum chips, striving to make quantum computing more scalable and accessible.

Quantum Cryptography and Its Potential to Redefine Security

As quantum computers advance, they pose a significant threat to current encryption methods. Traditional cryptographic techniques, such as RSA and ECC encryption, rely on the difficulty of factoring large numbers, a challenge that quantum computers can overcome almost instantly. Quantum cryptography, particularly quantum key distribution (QKD), offers a solution by leveraging the principles of quantum mechanics to create theoretically unbreakable encryption. Governments and cybersecurity firms are actively researching post-quantum cryptographic solutions to safeguard sensitive data against potential quantum attacks.

Challenges in Scaling Quantum Technologies

Despite its immense potential, quantum computing faces several challenges before it can become widely adopted. One of the biggest hurdles is qubit stability, as qubits are highly sensitive to environmental disturbances, leading to errors in computations. Error correction mechanisms are still in their early stages, requiring significant advancements before quantum computers can handle large-scale, practical applications. Additionally, quantum hardware is expensive and requires extreme cooling conditions, making commercialization difficult. Researchers and tech companies are actively working on solutions to address these challenges, but widespread implementation remains years, if not decades, away.

Conclusion

Quantum computing is poised to revolutionize industries by solving complex problems beyond the reach of classical computers. From pharmaceutical research and financial modeling to secure communications and logistics optimization, its applications are vast and transformative. However, challenges related to scalability, stability, and cost must be addressed before quantum computers can become mainstream. With continued advancements from tech giants and research institutions, the future of quantum computing holds immense promise, paving the way for groundbreaking innovations in computing and security.

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Technology

Reddit CEO Steve Huffman Unveils Monetization Strategy for 2025

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Reddit CEO Steve Huffman Unveils Monetization Strategy

In a strategic move to diversify revenue streams and enhance user engagement, Reddit CEO Steve Huffman has unveiled plans to introduce paid subscriptions for select subreddit content by the end of 2025. This initiative aims to offer exclusive, subscriber-only content within certain communities while maintaining the platform’s foundational free access.

During a recent “Ask Me Anything” session, Huffman described the paid content model as a “work in progress,” emphasizing its significance as one of the “new, key features” slated for rollout this year. He reassured users that the introduction of paid subreddits would not compromise the availability and growth of free content on the platform. This approach seeks to balance monetization efforts with Reddit’s commitment to open access, ensuring that the core user experience remains intact.

In addition to paid subscriptions, Reddit is exploring the development of marketplace features within subreddits. This would enable users to conduct transactions directly on the platform, facilitating the buying and selling of goods and services without the need for third-party platforms. Such a marketplace could significantly enhance user interactions and create new monetization avenues for both Reddit and its users. However, Huffman noted that this aspect of monetization is still under development and may take time to fully implement.

These strategic initiatives come in the wake of Reddit’s financial performance in 2024, where the company reported a net loss, prompting a reevaluation of its monetization strategies. Despite the financial setback, Reddit experienced a 39% increase in daily active unique visitors, totaling 101.7 million users. This growth, although slightly below market estimates, underscores the platform’s expanding user base and the potential for monetization through diversified offerings.

Reddit’s foray into paid content and on-platform transactions reflects a broader trend among social media platforms seeking sustainable revenue models beyond traditional advertising. By introducing exclusive content and facilitating user-driven commerce, Reddit aims to enhance user engagement, attract new audiences, and provide content creators with opportunities to monetize their contributions. As these plans unfold, the platform will need to navigate potential challenges, including user reception and the integration of new features, to successfully balance monetization with its community-driven ethos.

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