The Brazilian IRS in Espirito Santo recently fined TelexFree R$70 million, approximately $29 million USD, following a nine-month investigation into the company's tax payments. This penalty specifically addresses TelexFree's failure to remit taxes on its generated revenue.

In January, Alessandra Marques of the Acre Public Prosecutor's Office first revealed a US investigation into TelexFree in a radio interview. She later specified IRS involvement during a telephone conversation with Brazilian media. Confusion arose whether Marques referred to the US IRS or its Brazilian counterpart.

The US Securities and Exchange Commission (SEC) continues its investigation into TelexFree on suspicion of it being a Ponzi scheme. The Brazilian IRS also completed its own investigation, resulting in the R$70 million fine.

TelexFree co-owner Carlos Costa presented the IRS fine as a positive development in a recent company video. He claimed the Espirito Santo IRS made thirteen document requests during its nine-month probe, and he visited their offices at least twice.

The fine relates to TelexFree's failure to make tax payments. Article 957 of the tax code prescribes a 75% fine for non-payment, which can increase to 150%. Costa even declared the fine "wonderful" to TelexFree's affiliates.

The reason TelexFree failed to pay the IRS remains unclear. Costa did not address this issue directly. He instead focused on a "lack of fraud" supposedly found by the IRS. The IRS conducted an audit for tax compliance and levied a fine for unpaid taxes, not a fraud investigation.

The ongoing Ponzi scheme case against TelexFree in Acre remains separate from the IRS's tax fine. The Public Prosecutor's Office in Acre maintains communication with the IRS and knew of the tax investigation prior to Costa's public announcement.

Acre's Public Prosecutor's Office has also previously suspected TelexFree of money laundering and embezzlement. Costa emphasized that TelexFree had already paid the fine, but he did not disclose the source of the funds.