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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.
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.
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.
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.
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