According to a Department of Justice press release, an Arkansas business owner recently pleaded guilty to tax evasion charges stemming from his effort to avoid paying taxes that he previously admitted to owing. This story should serve as a reminder to taxpayers with an outstanding tax debt that although the IRS will work with you, they will not tolerate a failure to pay coupled with willful actions to evade payment of what is owed. 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 contact an experienced tax defense attorney to discuss the particulars of your situation.
Court documents reveal that James Brassart earned $1,502,749 in 2006 and in turn, owed $486,348 in federal income tax for that tax year. Although Brassart had more than enough income to pay his income tax liability, he took several steps to conceal his income and assets from the IRS.
IRS investigators alleged that from 2010 through 2016, Brassart took several steps to funnel business income through three nominee corporations. Once business income was directed into those entities, Brassart used the funds to pay his own personal expenses and further his own business endeavors. During that time, Brassart filed several petitions with federal courts attempting to discharge his IRS debt in bankruptcy. As a part of that process, Brassart made various false statements regarding his ownership of valuable assets.
The IRS and Department of Justice estimate that Brassart’s illegal activity caused a tax loss of more than $1,360,000. When Brassart is sentenced next year, he faces up to five years in federal prison for the tax evasion charge. Additionally, Brassart will likely be sentenced to serve a period of supervised release upon the completion of his physical incarceration. Lastly, Brassart will likely be ordered to pay restitution to the IRS in the amount of the tax loss that he caused.
It is not uncommon for both individuals and businesses to owe a tax debt to the IRS. When a taxpayer has tax payable, the IRS has various options to satisfy the obligation. In certain circumstances, when taxpayers simply do not have the ability to pay the taxes that they owe, the IRS has an offer-in-compromise mechanism whereby some or all the taxpayer’s debt may be forgiven by the IRS.
If you are in tax debt or have missed one or more tax returns, you should strongly consider speaking with an experienced tax defense lawyer. Together, you and your tax attorney will establish the facts of your case and determine the right steps to move forward into tax compliance. Although it is likely the easiest action to take, the most harmful strategy when you owe the IRS tax debt or have failed to file a tax return is to ignore the problem. The taxpayer in the above story simply lied to the IRS and the bankruptcy court about his ability to pay and will end up paying for it in more ways than one. Getting right with the government does not have to be a scary or difficult process. With the help of an experienced tax defense attorney, you won’t have 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.
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.
Our office technology allows clients to meet virtually via GoToMeeting. With end-to-end encryption, strong passwords and top-rated reliability, no one is messing with your meeting. To schedule a reduced rate initial consultation via GoToMeeting follow this link. Call our office and request a GoToMeeting if you are an existing client.
Questions and Answers About Tax Relief and Tax Resolution