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.
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.
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!
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.
Our office technology allows clients to meet virtually via GoToMeeting. 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.