According to a Department of Justice press release, an Alabama man was recently sentenced to serve 12 months in a federal prison after being convicted of tax evasion. This story should serve as a reminder to taxpayers that regardless of whether you have an outstanding tax liability with the IRS or have failed to truthfully report your tax liability, or if you take steps to illegally lower your tax obligations, or illegally thwart the IRS’s collection efforts, the IRS and the Department of Justice has the absolute authority to prosecute you and suggest a lengthy prison sentence. If you have significant tax debt or have failed to file a tax return for one or more years, it is in your best interest to seek the guidance of an experienced tax attorney to determine the best method to come into compliance.
Defendant Hid Income from the IRS
Court documents reveal that Jefferson County, Alabama resident John Cooney racked up a substantial tax debt over a decade ago. Prosecutors argued that through filed tax returns, Cooney admitted that he owed over $780,000 in taxes related to the 2008 through 2010 tax years.
To thwart IRS collection efforts, Cooney transferred income he earned to a nominee entity, GVA Advisors LLC. In doing so, he attempted to give the appearance that he was himself earning any income. Prosecutors alleged that between 2013 and 2016, Cooney transferred over $435,000 to GVA Advisors all the while representing to the IRS that he did not have substantial earnings.
Cooney pleaded guilty to one count of tax evasion earlier this year. In addition to being sentenced to serve one year in federal prison, Cooney was ordered to serve three years of supervised release. Lastly, Cooney agreed to pay $1.3 million in restitution to the IRS, representing the tax loss that he caused, plus interest and penalties.
Knowing When to Consult with a Tax Lawyer
In the story above, the defendant filed his tax returns truthfully and admitted that he owed over $750,000 in federal taxes. He simply failed to pay the amount that he owed and then continued to lie about his ability to pay. Many Americans try to ignore large tax liabilities when they arise, either by ignoring IRS collection efforts or failing to file a tax return that shows a tax liability altogether. Either case presents an extreme risk that could result in a criminal tax investigation and prosecution.
If you have a large tax debt or have failed to file a return that would result in a large tax debt, it is in your best interest to consult with an experienced tax defense attorney to determine the best strategy to get you in compliance with the nation’s tax laws. Working with a seasoned tax lawyer, you will identify potential mitigation strategies and choose one that best fits your situation. Then, you and your tax attorney will work together to resolve your case. One of the biggest benefits of being represented by a tax lawyer is never having to go up against the IRS alone.
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 Tax Relief and Tax Resolution
- What to do if there is an IRS discrepancy in amounts owed?
- What are IRS allowable expenses?
- Does the IRS allow other expenses as necessary expenses?
- What do I do if I owe payroll taxes?
- Can I set up a payment plan for unpaid payroll taxes?
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- What are the failure to pay tax penalties?
Questions and Answers on Offer in Compromise
- Do I need to provide financials if the IRS requests them?
- How does the IRS calculate my income?
- David W. Klasing Offer in Compromise help
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- What exactly is an Offer in Compromise?
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- How to protect my Offer in Compromise from being revoked
- Prerequisites to obtaining an Offer in Compromise
- Form 433-A (OIC) Collection Information Statement with OIC
- When will the IRS entertain an Offer in Compromise?
- What are the ways Offers in Compromise can be paid
- Objectives of the IRS Offer in Compromise Program
- Will Offer in Compromise affect criminal tax liability?
- Offer in Compromise includes liabilities prior to marriage
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- What happens when IRS finds something wrong with my offer
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- Is an accepted Offer in Compromise public record?
- What legal effects does entering into an Offer in Compromise have on a taxpayer?
Questions and Answers on Tax Liens, Levys and Tax Garnishments
- Spouses tax liability at life and death
- 2016 Changes to IRS Collections
- What Do You Do If You Owe Money to the IRS and You Cannot Pay the Balance Due Right Away?
- How long can the IRS collect on a past due debt?
- Do You have Unfiled Personal Income California Tax Returns?
- What are some events that can suspend or extend the collection statute allowing the IRS more time to collect on an outstanding tax debt?
- What happens when the collection statute expires?
- How much time does the CA Franchise Tax Board have to collect on an outstanding tax debt?
- Frivolous Collection Due Process Hearing Requests
- IRS Collection Notices
- What do you do if you owe sales tax to the CA Board of Equalization?
- When should I file a Collection Appeal Protest (CAP)?
- Differences between a CDP Form 12153 and Form 9423
- My Employer Received Form 668-W, Notice of Wage Garnishment
- Can the IRS levy my Social Security benefits?
- How to release the wage levy?
- What is a federal tax lien?
- What is the effect of a federal tax lien?
- Can a taxpayer challenge the filing of a federal tax lien?
- How do I get a tax lien removed or released?
- What do I do if the IRS issues a bank levy?
- How to Release a Bank Levy?
- What if I am an employer and the levy attached to payroll?
- What additional information does the IRS need from me?
- What is a Collection Due Process (CDP) Hearing?
- What is an Equivalency Hearing?
- I received a notice from the IRS, what do I do?
- I moved and never received notices from the IRS
