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.
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.
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!
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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