Questions? Feedback? powered by Olark live chat software

21-Month Prison Sentence Recommended for Defendant in Ohio Income Tax Evasion Case

Kansas Business Owner Gets 1 Year of Probation for Federal Income Tax Evasion
March 11, 2019
Arizona Immigration Rights Activist and Tax Preparer Sentenced in IRS Fraud Case
March 13, 2019

21-Month Prison Sentence Recommended for Defendant in Ohio Income Tax Evasion Case

Justice and Law concept. Legal counsel presents to the client a signed contract with gavel and legal law or legal having team meeting at law firm in background

A string of frauds eventually caught up with defendant Cynthia A. Faulkner, 32, of Dayton, Ohio, who, appearing before U.S. District Judge Thomas M. Rose late in January 2019, admitted to “aiding in the filing of a false income tax return,” according to a Department of Justice press release. In addition to two counts of that offense, which is a common form of tax evasion (defined under 26 U.S. Code § 7206(2)), Faulkner also pleaded guilty to “three counts of making a false document… and one count of misprision of a felony” (i.e. failing to report a felony) in connection with unrelated SNAP fraud and bank fraud.

Ohio Woman Charged After Helping to Conceal Nearly $125,000 from IRS

The first two sections of 26 U.S. Code § 7206 (fraud and false statements) set forth the definitions for two related but separate federal tax offenses, namely making or subscribing a false return (26 U.S. Code § 7206(1)) and aiding or assisting a false return (26 U.S. Code § 7206(2)), the latter of which was charged in Faulkner’s case. (As a perusal of our tax law blog reveals, these types of cases are filed somewhat frequently, with a few recent examples here and here.)

While the definitions contained in the Internal Revenue Code are of course more nuanced, the “short version” is that 26 U.S. Code § 7206(1) involves intentionally filing a tax return that contains false information, whereas 26 U.S. Code § 7206(2) involves helping another to do so. As one might infer, those charged with violating 26 U.S. Code § 7206(2) are often, though not always, CPAs and tax preparers, giving rise to the term “tax preparer fraud.”

Both definitions contain the phrase “material matter” (e.g. “fraudulent or… false as to any material matter”), which may be unfamiliar to taxpayers. “Material matter” refers to any important or significant information on the return, as opposed to minor or mathematically insignificant errors. For instance, if a taxpayer underreports personal or business income, this would generally be considered “material matter,” depending on the size of the discrepancy.

This was what occurred in Faulkner’s case. According to the press release, the defendant “aided in the filing of materially false income tax returns by underreporting business receipts by nearly $125,000 over tax years 2011 and 2012.”

In addition to the tax offenses, Faulkner also underreported rental expenses when applying for SNAP benefits and concealed “first-hand knowledge of a bank fraud scheme” which involved “receiving payment for fraudulent real estate appraisal reports.” The press release also notes that Faulkner later “submitted false documents to the Court asking for continuance on a court hearing,” providing paperwork for surgery she never underwent.

“The parties in this case,” the press release concluded, “have agreed upon a recommended sentence of up to 21 months in prison.”

The maximum prison sentence for aiding or assisting a false return is 36 months in federal prison, and/or a criminal fine of up to $100,000. Courts can also order defendants to pay restitution and undergo supervised release, while furthermore, tax professionals face the loss or suspension of critical licenses and certifications necessary to practice.


San Bernardino Tax Evasion Attorneys Serving California

With the April 15 filing deadline swiftly approaching, some taxpayers might feel tempted to bend the rules in pursuit of lower tax bills or larger refunds. But as Faulkner’s case demonstrates – like many before hers – tax crimes never pay. The IRS works with the FBI, other federal agencies, and government organizations around the world, arming prosecutors with the tools to build cases quickly and aggressively. If you are under investigation by the IRS, or are worried that a tax audit could turn into a criminal investigation, it is urgent that you discuss the situation with an experienced criminal tax defense attorney right away.

At the Tax Law Office of David W. Klasing, our San Bernardino tax fraud lawyers have over 20 years of combined experience fighting felony and misdemeanor charges in federal court. With a strategic network of tax offices throughout Northern and Southern California, our dedicated team provides responsive, hard-hitting representation. Contact our income tax evasion attorneys right away to arrange a reduced-rate consultation, or call the Tax Law Office of David W. Klasing at (800) 681-1295.

Also, we’ve expanded our offices! In addition to our offices in Irvine and Los Angeles, the Tax Law Offices of David W. Klasing now have offices San BernardinoSanta BarbaraPanorama CityOxnardSan DiegoBakersfieldSan Jose, San FranciscoOakland and Sacramento.


Note: If you have concerns about the privacy of our initial or subsequent communication and are unable to easily travel to our Irvine / Orange County Main Office, consider scheduling a GoToMeeting to safely and securely establish an initial or maintain an existing attorney client relationship.  With end-to-end encryption, strong passwords and top-rated reliability, no one is messing with your meeting. To schedule a reduced rate initial consultation via GoToMeeting follow this link.   Call our office and request a GoToMeeting if you are an existing client. We are generally happy to travel to any of our appointment only satellite offices for a subsequent meeting in appropriate circumstances once a relationship is established via a signed engagement letter and the payment of an initial retainer or where enough retainer is available where a current client to cover the reasonable travel time and time required for the meeting.

Will it cost me more to hire the Tax Law Offices of David W. Klasing, who’s main office and the vast majority of the firm’s staff is located in Irvine California, but an appointment only Satellite office is close to my location, as opposed to a local company?  Absolutely not!  See our policies that address this issue here:

Helpful Q and A libraries