Taxpayer Convicted for Lying About Coronavirus Retirement Plan Distribution

A taxpayer was recently prosecuted and convicted for lying about the basis from a coronavirus-related distribution from her retirement account. During the pandemic, CRDs were permitted without penalty for taxpayers who had contracted COVID-19 or incurred financial hardship due to the pandemic. The taxpayer here took a total of $80,000 from a city's 457(b) plan. To take these distributions, taxpayers were required to sign a form stating that they were adversely impacted by COVID. The form was signed under penalty of perjury. At trial, the court rejected the defendant's argument that a travel business she had started lost money due to the virus. The defendant, however, was also a former prosecutor who had publicly stated that the business had never gotten off the ground. The taxpayer now faces a maximum sentence of five years in prison. For more information on the rules governing CRDs, visit Tax Facts Online. : Q .