According to a Department of Justice press release, an Alabama auto industry professional and tax defier was recently sentenced to 24 months in federal prison. This story should serve as a reminder to taxpayers who do not take their federal or state tax liabilities seriously. If you have failed to file a tax return for one or more years or have taken a questionable tax position on a tax return that would be difficult to sustain upon examination by federal or state tax authorities, it is likely in your best interest to contact an experienced tax defense attorney to determine strategies to bring you back into tax compliance and remove the risk of criminal tax prosecution.
Defendant Intentionally Evaded Taxes Following Tax Defier Strategy
This story serves as an update to news that we brought to you earlier this year. As you may recall, the defendant, Ivan Scott Butler, worked as a salesman of extended vehicle warranties. He also worked as a consultant for the automobile industry. Beginning in 1993, Butler stopped filing U.S. individual tax returns and in 1998, he began moving assets overseas. For instance, in 1999, Butler moved precious metals and other investment assets to accounts in Switzerland. He took further steps to conceal the assets that he had moved overseas by investing in offshore insurance policies that were not immediately traceable back to Butler. The practice of using insurance policies to disguise vehicles intended for investment activity is a practice oftentimes referred to as “insurance wrapping”.
By 2014, Butler had moved a great deal of money overseas without detection by the IRS and without paying the income taxes associated with the funds. Butler converted a portion of his insurance annuities to precious metals and instructed that they be physically shipped to him back in the United States.
The IRS and Department of Justice estimate that Butler caused a total tax loss of more than $1,093,400. In addition to being sentenced to serve two years in prison, Butler was ordered to serve three years of supervised release after his physical incarceration. Lastly, Butler will be required to pay over $1 million in restitution to the United States representing the tax loss that he caused to the government.
When to Seek Help from a Dual Licensed Tax Attorney & CPA
This story exemplifies the potential criminal penalties that accompany failing to file a tax return or intentionally lying on your tax filings. If you have failed to file a federal or state tax return for one or more years or have taken an unsupportable position on your tax return concerning income, deduction, or offshore bank accounts, you should contact a seasoned dual licensed Tax Attorney & CPA immediately.
Together, you and your combo Tax Lawyer & CPA will establish the pertinent facts of your situation and mutually determine the best strategy to bring you into tax compliance. Many taxpayers believe that they can take on the IRS or a state tax authorities alone, but with an experienced tax attorney by your side, you will always be represented in any communication with a taxing authority to avoid criminal admissions and determine the optimal solution to get back into compliance and avoid criminal tax prosecution.
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 disclosurebefore 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, KovelCPAs 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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Questions and Answers about Offshore Voluntary Disclosure Initiative (OVDI)
- Why hire David W. Klasing to represent me in an audit
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- Bank account overseas I didn’t report on my income tax
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Questions and Answers about FBAR Compliance and Disclosure
- Potential charges for not participating in the 2014 OVDP
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- 2012 Offshore Voluntary Disclosure Initiative Objectives
- What is an FBAR?
- Filed amended returns without making a Voluntary Disclosure
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- 2012 OVDI program vs. the voluntary disclosure practice
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Questions and Answers About Foreign Tax Audits
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- International tax investigations are an IRS high priority
Questions and Answers on Unfiled Back Taxes
- What are the common issues that non-filers face?
- Risk of audit after filing delinquent prior year returns
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- How important is it to the government that I didn’t file?
- Delinquent tax return criminal prosecution likelihood
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- What happens after enforcement action has begun?
- Should I use an attorney, EA or a CPA to represent me when I re-enter the tax system?
- Why do people drop out of the tax system?
- What happens after the IRS identifies me as a non-filer?
- IRS has not previously filed substitute returns
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- What penalties can IRS impose on delinquent tax filings?
- What should I do to re-enter the tax system?
- Can Law Office of David W. Klasing help me re-enter system?
- Will tax collection taken by authorities affect my credit
- I concealed bank accounts from the government
- Forgetting or failing to file tax return
Questions and Answers for Criminal Tax Representation
- When tax defense counsel parallels tax crime investigation
- Guilty of tax obstruction by backdating documents?
- To be found guilty of tax obstruction must a person actually be successful in impeding the IRS’s functions?
- Help! The Document I Gave the IRS Had False Information
- Tax crime aiding or assisting false return IRC §7206(2)
- What is the crime known as tax obstruction § 7212?
- What is the difference between tax perjury and tax evasion?
- What is the tax crime commonly known as tax perjury?
- What is a Klein Conspiracy?
- Increased possibility of civil action in IRS investigation
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- Must the IRS prove tax crimes beyond a reasonable doubt?
- Is it a crime to make false statements to the IRS?
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- Failed to tell IRS about my nominee account
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- Government says I attempted to evade my taxes. Now what?
- I forgot to pay my taxes or estimated tax. Is this a crime?
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- 5 Ways to Respond to Tax Evasion Charges
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- How the government proves deficiency in a tax evasion case
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- Requesting conference before investigative report is done
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- What can you generally tell me about tax crimes?
- Continuing filing requirement with investigation pending
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- What the IRS includes in indictment for tax case
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- IRS methods of gathering evidence to prove tax crime
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- Failure to keep records or supply information
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- What is attempting to evade payment of taxes?
- What is income tax evasion and how is it punished?
- What is attempted income tax evasion?
- What is the crime of failure to pay tax? What is punishment
- Crime of making or subscribing false return or document
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- Tax crimes related to employment tax forms and trust funds
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- What is the crime ”evasion of assessment” of tax?
- Specific examples of “attempting” to evade tax assessment
- What is the so-called Spies evasion doctrine?
- Does overstating deductions constitute tax evasion?
- Is it tax evasion if my W-4 contains false statements?
- IRC §7201 attempt to evade vs. common-law crime of attempt
- What are the penalties for Spies tax evasion?
- How government proves a taxpayer attempted tax fraud
- What is a tax that was “due and owing.”
- What is evasion of assessment for tax liability?
- Is evasion of assessment different from evasion of payment
- Does the IRS have a dollar threshold for tax fraud?
- What is the IRS burden of proof for tax fraud convictions?
- Are Tax Laws Constitutional?
- What is the source of law that defines tax evasion?
- Does section 7201 create two distinct criminal offenses?
- Does tax evasion definition include partnership LLC
- What if I helped someone else evade taxes?
- Is it illegal to overstate deductions on my tax return?
- Is it illegal to conceal bank accounts from the IRS?
- Do later losses justify prior deductions?
- Common reasons the IRS and DOJ start investigations
- What is the Mens Rea component of tax crimes?
- What is a proffer agreement and what are the risks?
- Why to have an attorney to review a proffer agreement
- Why enter into a proffer agreement?
- Limited use immunity from proffer agreements
- Difference between civil and criminal fraud allegations
