According to a Department of Justice press release, a Michigan business owner who had previously been convicted of tax evasion, failing to file a tax return, and obstructing the IRS was sentenced to serve two years in a federal prison. This story highlights the severe consequences that can result from a criminal tax conviction. If you have failed to file a tax return for one or more years, or have taken a position on a tax return that was knowingly false, it is in your best interest to contact an experienced tax attorney as soon as possible to determine the best path to get right with the government.
Marijuana Dispensary Proprietor Underreported Income, Attempted to Obstruct IRS
This news is a follow up to a blog that we brought you last year. You may recall from our previous story, Ryan Richmond, from Bloomfield, Michigan, was the owner of Relief Choices, LLC, a marijuana dispensary operating in Warren, Michigan. During a period from 2011 to 2014, Richmond took measures to obscure the true extent of his business earnings. He implemented a strategy involving Relief Choices covering its operational expenses predominantly in cash. Furthermore, to mask the genuine business gross receipts, he channeled customer credit card transactions through a separate, unrelated third-party bank account.
Richmond’s illegal behavior didn’t end at simply evading taxes. In 2015 and 2016, when the IRS initiated their criminal tax investigation, Richmond employed deceptive tactics to hinder their investigation. He particularly misled an IRS auditor who was looking into his personal income tax records. He was elusive regarding his awareness of, involvement in, and the profits he amassed from the Relief Choices venture. The result of Richmond’s actions were significant, causing a tax loss to the IRS exceeding $1.15 million.
In addition to being sentenced to 24 months in federal prison, Richmond was ordered to serve one year of supervised release, which commences upon his release from physical incarceration. Lastly, Richmond was ordered to pay over $2.7 million in restitution, representing the amount of tax loss that he caused.
Working with a Tax Attorney to Rectify Past Tax Issues
The defendant in the above case likely now fully understands the repercussions that can result from a criminal tax investigation, prosecution, and conviction. The ultimate goal is to not have an issue with the IRS make its way into a courtroom. It is generally best for the taxpayer if past noncompliance is rectified well before IRS Criminal Investigations is involved.
If you have filed a tax return that under-reported taxable income, overstated deductible expenses, or have failed to file a tax return altogether, it is in your best interest to seek the guidance of a seasoned tax attorney. Together, you will work to identify the pertinent facts at play in your case and work together to develop a path forward to come into tax compliance, without you having to go up against the IRS alone.
If you have failed to file a tax return for one or more years or have taken a position on a tax return that could not be supported upon an IRS or state tax authority audit, eggshell audit, reverse eggshell audit, or criminal tax investigation, it is in your best interest to contact an experienced tax defense attorney to determine your best route back into federal or state tax compliance without facing criminal prosecution.
Note: As long as a taxpayer that has willfully committed tax crimes (potentially including non-filed foreign information returns coupled with affirmative evasion of U.S. income tax on offshore income) 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!
