Albuquerque Business Owner Sentenced to Over 2 Years in Federal Prison

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Albuquerque Business Owner Sentenced to Over 2 Years in Federal Prison

wire fraud and tax evasion

Another respected business owner sentenced for tax evasion and fraud

As an update to a story that we brought you last May, multiple news outlets have reported that a Albuquerque, New Mexico man was recently sentenced to federal prison after pleading guilty to charges relating to evading taxes and failing to file a tax return for his business. As you will read, a contributing factor to the length of the defendant’s sentence was his failure to pay taxes for years going as far back as 1992. Taxpayers with outstanding tax debt or exposure if they were to be audited should consider the possibility of a court using past tax misdeeds against you at sentencing. If you have unfiled tax returns or have received a notice that you are being audited, it is in your best interest to contact an experienced tax defense attorney as soon as possible.

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Defendant Took Steps to Hide Income, Evade Taxes

A federal judge sitting in New Mexico recently sentenced David Castle to serve two years and three months in a federal prison after his conviction on one count of tax evasion as a part of a plea deal, last May. Consistent with our reporting on this story last year, Castle was the owner and operator of the Gold and Silver Exchange between 2004 and 2018. During that time, Castle took various steps, including the use of nominee entities and the extensive use of cash to hide income and income/expense activity from the IRS.

What really interesting about this case is that simple failure to file is a misdemeanor but because “Spies Evasion” factors were found to exist Mr. Castle’s crimes were ramped up to felonies. The maximum sentence that can be handed down for one felony count of tax evasion is five years. Generally, many factors go into the sentencing judge’s decision as to the length of the sentence, including the amount of tax loss suffered by the government. In the instant case, David Castle was estimated to have caused a tax loss of just over $211,000. In settling on over two years of prison time, the court looked to Castle’s failure to pay taxes dating all the way back to the early 1990’s, even though the statute of limitations had run for those years. A court is able to consider past conduct in sentencing, even if the conduct was not prosecuted or could not be prosecuted because of statute of limitations constraints. Castle was also ordered to pay a $50,000 fine.

Key Takeaways

The government is less concerned with the amount of tax loss caused

There are two key takeaways from this story. First, the government is less concerned with the amount of tax loss caused, but rather, that you acted criminally. The defendant in the above story only caused the IRS a loss of just over $200,000 but was still sentenced to serve over two years in prison. Some of the stories that we cover involve taxpayers that have failed to pay millions of dollars of taxes. Nonetheless, the IRS and Department of Justice will go after taxpayers who are not in compliance, regardless of the amount in controversy.

Tax wrongdoings may not result in criminal charges

The second takeaway is that although certain tax wrongdoings cannot result in criminal charges, they can be used by a court to determine the appropriate sentence for a defendant. As illustrated in the story above, unpaid taxes from decades ago may not be prosecutable, but can be used in extending the length of a defendant’s sentence that may have otherwise been shorter.

It is also worth noting that the statue of limitations on an unfiled return never begins to run and civilly the IRS can audit and assess on every unfiled return at its discretion even after the criminal prosecution has finished.

Regardless of your history as a taxpayer or the amount of tax at issue, taxpayers who receive a notice from the IRS that they are being audited or those who have unfiled tax returns or unpaid taxes should seek the counsel of an experienced tax defense attorney as soon as possible. Your tax lawyer will work with you to understand your particular set of facts and recommend a course of action. Once you and counsel determine your strategy, your tax attorney will represent you in all interactions with the federal or state governments.

If you have an extensive history of non-filing it is advisable to reenter the tax system with the help of an experience tax attorney especially if undisclosed foreign accounts or non-reported sources of taxable offshore income exist.

Note:  As long as a taxpayer that has willfully committed tax crimes self-reports the tax fraud (including a pattern of non-filed returns) through a domestic or offshore voluntary disclosure before the IRS has started an audit or criminal tax prosecution, the taxpayer can be successfully brought back into tax compliance and receive a nearly guaranteed pass on criminal tax prosecution and simultaneously receive a break on the civil penalties that would otherwise apply.  It is imperative that you hire an experienced and reputable tax defense attorney to take you through the voluntary disclosure process.  As uniquely qualified and extensively experienced Criminal Tax Defense Tax Attorneys, Kovel CPAs and EAs, our firm provides a one stop shop to efficiently achieve the optimal and predictable results.   See our Testimonials to see what our clients have to say about us!

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Contact an Experienced Tax Attorney Today

The tax and accounting professionals at the Tax Law Offices of David W. Klasing have extensive experience representing a diverse group of taxpayers. From individuals to middle market businesses and beyond, our team of zealous advocates will assist in the development of a strategy to help you reach your specific goals and objectives. Whether you are under a tax examination or are in need of tax planning advice, contact the Tax Law Offices of David W. Klasing today, online or by phone at (800) 681-1295, for a reduced-rate consultation.

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