According to a Department of Justice press release, a North Carolina businessman recently pleaded guilty to tax fraud, among other charges. This story should serve as a reminder to business owners that omitting income can sometimes appear as a harmless fib, the IRS and the Department of Justice take income tax obligations seriously and will investigate and prosecute instances of potential intentional tax noncompliance. If you have failed to file a tax return for one or more years, or have filed an income tax return reporting less income than you actually earn, it is in your best interest to contact an experienced tax defense attorney to determine the best steps to come into compliance before contact is initiated with the IRS.
Businessman Underreported Income and Underpaid Tax Bill
Court records indicate that Charles Agee Atkins was the owner and operator of several Chapel Hill, North Carolina-based risk consulting businesses. Although the IRS and Department of Justice do not contend that Atkins’ business tax returns were prepared or filed fraudulently, the amount that Atkins’ earned from his businesses became the focus of scrutiny. Investigators allege that between 2011 and 2017, Atkins’ underreported significant amounts of income that he earned from his businesses. The IRS estimates that such underreporting caused a tax loss of more than $380,000.
Additionally, IRS investigators and DOJ prosecutors alleged that Atkins failed to pay large amounts of tax on the income that he did report. The IRS estimated that Atkins had an outstanding tax bill of more than $420,000. All in all, the government alleged that they were out more than $800,000 when taking Atkins’ underreporting of income and underpayment of tax together.
As a part of his guilty plea, Atkins also admitted that he was illegally in possession of a firearm. Atkins had been convicted of tax fraud in 1988 and as a convicted felon, was not permitted to possess a firearm. Upon a search warrant being executed at his residence, a shotgun was recovered. A date for sentencing has not yet been set, but Atkins will face up to three years in prison for the tax count and up to 10 years for the firearm possession count.
Knowing When to Contact a Tax Attorney
In this particularly tough economy, it is not uncommon for business owners to drum up ways to maximize their bottom line. Unfortunately, one of those ways is sometimes tax. Although there is nothing illegal about structuring your personal and business affairs to pay the least amount of tax, it is illegal to fail to report income or to inflate business expense deductions to pay less tax.
If you have failed to file an individual or business tax return or have artificially lowered your tax bill by omitting income or over-inflating deductions, it is in your best interest to contact an experienced tax defense attorney to assist your efforts to come into compliance. With IRS data analytics capabilities increasing at a rapid pace, the idea that the IRS simply cannot detect the majority of tax fraud is becoming a thing of the past.
A seasoned tax attorney will work with you to establish the particular facts of your case and make a recommendation as to the most viable steps forward. Once you agree on the path toward tax compliance, your tax lawyer will represent you in all of your interactions with the IRS. Going up against the government alone is never recommended and will not need to be a concern of yours.
What is the Voluntary Disclosure Program?
The voluntary disclosure program allows taxpayers who have committed past tax crimes to be brought back into compliance in almost all cases without facing criminal tax charges. The key is that you must disclose your fraudulent behavior and correct the returns before the IRS opens an audit or a criminal tax investigation into your returns. At the Tax Law Offices of David W. Klasing, our skilled Tax Lawyers and CPAs have years of experience successfully guiding our clients through the voluntary disclosure program and bringing them back into compliance. In fact, at times our voluntary disclosure work has accounted for 80% of our book of business.
Note: As long as a taxpayer that has willfully committed tax crimes (potentially including non-filed returns coupled with affirmative evasion of payment) self-reports the tax fraud (including a pattern of non-filed returns) through a domestic or offshore voluntary disclosure before the IRS has started an audit or criminal tax investigation / prosecution, the taxpayer can ordinarily be successfully brought back into tax compliance and receive a nearly guaranteed pass on criminal tax prosecution and simultaneously often receive a break on the civil penalties that would otherwise apply.
It is imperative that you hire an experienced and reputable criminal tax defense attorney to take you through the voluntary disclosure process. Only an Attorney has the Attorney Client Privilege and Work Product Privileges that will prevent the very professional that you hire from being potentially being forced to become a witness against you, especially where they prepared the returns that need to be amended, in a subsequent criminal tax audit, investigation or prosecution.
Moreover, only an Attorney can enter you into a voluntary disclosure without engaging in the unauthorized practice of law (a crime in itself). Only an Attorney trained in Criminal Tax Defense fully understands the risks and rewards involved in voluntary disclosures and how to protect you if you do not qualify for a voluntary disclosure.
As uniquely qualified and extensively experienced Criminal Tax Defense Tax Attorneys, Kovel CPAs and EAs, our firm provides a one stop shop to efficiently achieve the optimal and predictable results that simultaneously protect your liberty and your net worth. See our Testimonials to see what our clients have to say about us!
We Are Here for You
Regardless of your business or estate needs, the professionals at the Tax Law Offices of David W. Klasing are here for you. We are open for business and our team will help ensure that your business is too. Contact the Law Offices of David W. Klasing today to discuss your business with one of our professionals.
In addition to our main office in Irvine, the Tax Law Offices of David W. Klasing has unstaffed (conference room only) satellite offices in Los Angeles, San Bernardino, Santa Barbara, Panorama City, Oxnard, San Diego, Bakersfield, San Jose, San Francisco, Oakland, Carlsbad and Sacramento. During the COVID-19 pandemic, our staff are working from home, but have full virtual meeting capability.
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