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The parents involved in yesterday's widely reported college admissions scam could have even more bad news coming their way in the form of tax penalties and civil tax fraud charges, as the parents involved in the scheme were able to take tax deductions on purported "donations" that were doubling as bribes in order to get their children into elite colleges like Stanford and Yale.
The Key Worldwide Foundation has been declared a tax exempt organization and fronted/brokered many of the bribes that were paid out to University administrators. The Internal Revenue Service declared the foundation tax-exempt under code Section 501(c)(3) around 2013. If parents decided to "double dip" and write their bribes off, they could eventually be charged with tax crimes.
Statute - Limitations - IRS - Option - Parents
As long as the statute of limitations has not expired, the IRS has the option to audit the parents involved in the scheme, potentially resulting in deficiency notices, according to Sam Brunson, a professor of law at Loyola University Chicago.
If the IRS then finds out they took deductions on fake charitable contributions, parents could be hit with "large penalties" under "tax code Section 6601 and Section 6662, which cover interest payments and penalties for underpayment...
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