According to a Department of Justice press release, an Alaska businessman was recently convicted and sentenced for tax evasion and walrus ivory trafficking. Although the defendant in this case was trafficking rare animal products in the process, engaging in tax evasion in any context can result in severe civil and criminal consequences. 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 examination, it is in your best interest to contact an experienced tax defense attorney to determine the best strategy to come into tax compliance.
Defendant Dealt Illegal Exotic Wildlife Products and Evaded Taxes
Court records indicate that Walter Earl, 76, of Anchorage, Alaska was the owner and operator for The Antique Gallery. Federal agents discovered that the defendant was illegally selling walrus ivory and in 2017, he sold walrus ivory head mounts to undercover agents on three separate occasions. The defendant justified his illegal behavior to customers by indicating that he was exempt from federal laws prohibiting the sale of such products because he employed Alaska natives.
Additionally, and separate from the illegal walrus ivory activity, federal investigators discovered that Earl failed to file individual income tax returns for tax years 2013 through 2017. As a part of their investigation, authorities determined that Earl dealt primarily in cash, using nominee accounts, and instructing employees to not report their income earned from his business. The IRS estimated that Earl failed to report nearly $680,000 of business income that he earned for the five-year period of non-reporting.
Earlier this year, Earl pleaded guilty to three counts of wildlife trafficking and one count of tax evasion. He was sentenced to serve six months of home confinement. Additionally, he was ordered to pay $185,000 in fines and pay restitution to the IRS in the amount of $216,054. Lastly, the defendant was ordered to forfeit 50 walrus tusks and other illegal wildlife material in his possession to the U.S. government.
Getting Right with The Government After Failing to Report All of Your Business Income
As we mentioned above, the particulars of this story are relatively unique. Most taxpayers are not prosecuted for both tax evasion and for dealing in illegal exotic animal products. Nonetheless, this story does illustrate the potential civil and criminal consequences related to evading federal taxes. The defendant in this case failed to file a tax return and as a result, failed to pay federal income tax on a substantial amount of business income. Regardless of the type of business you are involved in, (Legal and Illegal activities are taxable) the IRS and Department of Justice will not hesitate to drop the hammer on those who intentionally evade their obligation to pay tax.
If you have failed to file a tax return for one or more years, or have filed a tax return that contains erroneous information, you should consider contacting an experienced tax defense attorney as soon as possible. Together, you and your seasoned tax lawyer will work to establish your potential civil and criminal exposure. Next, you will jointly determine the next best steps to get you right with the government. While you are being represented by a tax defense attorney, you will be able to sleep soundly knowing that you will not have to go up against the IRS or Department of Justice alone.
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 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.
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More Commonly Asked Tax Audit Questions
- How should Tax Audits be Handled by Criminal Tax Counsel?
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- What is an eggshell audit?
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- Warning signs of a criminal referral from an IRS audit
- Effective tax defense counsels goals in an egg shell audit?
- How are the 4 goals and outcomes 1 and 2 best obtained?
- What are the possible outcomes of an egg shell audit?
- Is it my right to know why I was selected for examination?
- What can I do to prepare for an audit?
- What is an IRS civil examination?
- How IRS decides which tax returns are audited
- What are my appeal options if I disagree with IRS?
- What are my basic taxpayer rights if the IRS audits me?
- Options if I am unable to pay at the conclusion of audit
- What a 30 or 90-Day Letter from the IRS means
- What is involved with appealing disagreements?
- Rights to disagree with IRS tax auditor’s findings
- Can I stop the IRS from repeatedly auditing me?
- Can I have the examination transferred to another area?
- Can I record my IRS interview and is it a good idea?
- How many years of returns are at risk during an audit?
- Common reasons for the IRS to conduct a tax audit
- How to avoid negative consequences from an IRS interview
- Have to agree to interview by taxing authority directly?
- Are all audits the same?
- What should I do if the IRS is investigating me?
- What if I don’t respond to a taxing authority audit notice
- Your rights during an IRS tax audit
- Risks of attending an IRS audit without a tax lawyer
- Most common audit technique used by taxing authorities
- Don’t go into an IRS audit without representation
- Why hire an attorney to represent me in an audit?
- Why hire David W. Klasing to represent me in an audit
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
- Am I Guilty of Tax Evasion if the Law is Vague?
- What happens if the IRS thinks I committed tax crimes?
- What are ways to defend against a tax evasion charge?
- Difference between criminal tax evasion and civil tax fraud
- What accounting method does the IRS use for tax fraud
- Can I Change Accounting Method to the Accrual Method
- What is the willfulness requirement for tax evasion?
- I didn’t know I committed tax fraud. Can I get off?
- Concealed assets from IRS. Can I avoid tax evasion charges
- How government proves I willfully engaged in tax evasion
- What is the venue or court where a tax crime case is heard?
- Must the IRS prove tax crimes beyond a reasonable doubt?
- Is it a crime to make false statements to the IRS?
- Will the IRS overlook my tax evasion if it’s minor?
- Failed to tell IRS about my nominee account
- Audit risk with cash based business transactions
- How to defend a client charged with tax evasion
- Is it tax evasion if I didn’t file income tax return?
- Government says I attempted to evade my taxes. Now what?
- I forgot to pay my taxes or estimated tax. Is this a crime?
- Government proof I “willfully” failed to pay taxes
- 5 Ways to Respond to Tax Evasion Charges
- Being audited after using a tax professional
- Rules for what an IRS agent can do while investigating me
- How tax preparers, attorneys and accountants are punished
- How the IRS selects tax crime lead for investigation
- How does the IRS prosecute suspected tax crimes?
- Does IRS reward informant leads for suspected tax crimes?
- How the government proves deficiency in a tax evasion case
- Do prior tax crimes factor into new IRS tax convictions?
- Requesting conference before investigative report is done
- Requesting conference after IRS Special Agent Report
- What are my rights during an IRS criminal investigation?
- Avoid prosecution for tax crime with voluntary disclosure?
- Defense tactics that make it hard for to prove willfulness
- How a tax attorney can stop your criminal tax case?
- What can you generally tell me about tax crimes?
- Continuing filing requirement with investigation pending
- Federal criminal code crimes that apply to tax issues
- Penalty for making, subscribing, and filing a false return
- CID special agent’s report for criminal prosecution
- What is the discovery process in a criminal tax case?
- What the IRS includes in indictment for tax case
- What is the hardest element of a tax crime to prove?
- IRS methods of gathering evidence to prove tax crime
- What does a grand jury do in IRS tax crime prosecution?
- Failure to keep records or supply information
- Failure to make a return, supply information, or pay tax
- What is attempting to evade payment of taxes?
- What is income tax evasion and how is it punished?
- What is attempted income tax evasion?
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- Crime of making or subscribing false return or document
- Criminal Investigation Division investigation tactics
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- IRC §7201 attempt to evade vs. common-law crime of attempt
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- How government proves a taxpayer attempted tax fraud
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- Are Tax Laws Constitutional?
- What is the source of law that defines tax evasion?
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- What is a proffer agreement and what are the risks?
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- Difference between civil and criminal fraud allegations
