Tax evasion occurs when people deliberately & intentionally dodge their tax obligations. The U.S. government treats this crime very seriously. Those convicted of tax evasion can face serious consequences like expensive fines and prison terms.
For instance, a Philadelphia attorney who was recently convicted of tax evasion has been sentenced to over 2 years in prison. Further, he has been ordered to pay over $133,000 for his tax crimes. If you have been accused of tax evasion, having competent legal representation on your side can help you avoid facing similar penalties in your case.
Seek thorough guidance and support from our experienced Dual Licensed Tax Attorneys and CPAs at the Tax Law Offices of David W. Klasing by dialing (800) 681-1295 or clicking here to schedule a reduced rate initial consultation online.
Tax Evasion Scheme Results in Prison Sentence for Philadelphia Attorney
A Philadelphia attorney named Jonathan Olivetti has been sentenced to prison for committing fraud and tax evasion. Between June 2020 and February 2021, Olivetti fraudulently obtained pandemic relief money by applying for four loans he was not entitled to. He applied for two loans through the Paycheck Protection Program (PPP) and two loans through the Economic Injury Disaster Loan (EIDL) on behalf of his law firm, Olivetti Law, LLC. These loan programs were designed to provide financial assistance to those affected by the pandemic.
Olivetti inflated the payroll of Olivetti Law, LLC in the online loan applications for a PPP loan, resulting in him receiving $41,600 and $62,500 through the EIDL. However, the applications contained false information about the amount of receipts from his law firm that were not approved by the Small Business Administration (SBA).
In addition to the loan fraud, Olivetti evaded taxes by hiding money between November 2015 and July 2020. As a result, he now faces a prison sentence and has been ordered to pay restitution to various entities. In addition to his 27-month prison sentence, Olivetti must pay $21,800 to the SBA, $20,800 to MBE Capital, $91,991.28 for mail fraud, and $133,269.81 to the federal government for tax evasion.
It is important to address any tax issues you are having quickly so that you may avoid facing consequences similar to those faced by Olivetti. Fortunately, our Dual Licensed Tax Attorneys and CPAs are prepared to review your case and explain the appropriate course of action.
What are the Different Types of Tax Evasion?
Several different types of tax evasion can occur. If you have been accused of any of the following, then the team at our law firm can help build your defense:
Personal Income Tax Evasion
Individuals may engage in tax evasion to evade paying personal income taxes. Some common tactics include underreporting income, claiming false deductions or credits, and concealing assets. For instance, a person might fail to report income earned through cash transactions or offshore bank accounts, deliberately providing inaccurate information on their tax returns to lower their taxable income.
Corporate Tax Evasion
Corporations may employ strategies to evade corporate taxes and maximize profits. One method is fraudulent transfer pricing, where a multinational company manipulates the prices of goods and services between its subsidiaries to shift profits to low-tax jurisdictions. Another example is the creation of shell companies in tax havens to hold intellectual property rights and royalties, enabling the company to reduce taxable income in higher-tax countries.
Offshore Tax Evasion
Offshore tax evasion involves individuals or businesses using offshore accounts or entities to hide income and assets from the IRS. This is typically achieved by establishing offshore trusts, shell companies, or bank accounts in jurisdictions known for their low tax rates and strict banking secrecy laws. Offshore tax evasion is often associated with money laundering and illicit activities, as it facilitates the concealment of wealth.
Sales Tax Evasion
Sales tax evasion occurs when businesses intentionally underreport or fail to remit sales taxes collected from customers. This can be done through various means, such as manipulating sales records, inflating deductions, or conducting transactions “off the books.” For example, a retailer may understate their sales by accepting cash payments without issuing receipts or maintaining separate records.
Employment Tax Evasion
Employment tax evasion occurs when employers deliberately misclassify workers as independent contractors instead of employees to evade payroll taxes. By doing so, employers avoid paying their share of Social Security, Medicare, and unemployment taxes, as well as withholdings from employees’ wages. This practice allows businesses to save on labor costs and shift tax responsibilities onto workers.
Estate Tax Evasion
Estate tax, also known as inheritance tax, is imposed on the transfer of wealth from a deceased person to their heirs. Estate tax evasion involves strategies aimed at undervaluing assets or transferring them to avoid tax liability. Individuals may engage in fraudulent tactics such as creating sham trusts, undervaluing properties, or engaging in gift-giving schemes to reduce the taxable value of their estates.
Internet and Digital Economy Tax Evasion
The digital economy presents unique challenges for tax authorities due to the borderless nature of online transactions. Tax evasion in the digital realm involves exploiting loopholes and inconsistencies in international tax laws. For instance, companies may establish a presence in low-tax jurisdictions despite conducting significant business elsewhere. Alternatively, online retailers may fail to collect and remit taxes on sales made to customers in different jurisdictions.
If the IRS Has Charged You with a Tax Crime, or you merely fear they might, our dual licensed Tax Lawyers & CPAs Can Help
If you are concerned about being charged with tax evasion, get help from our Dual Licensed Tax Attorneys and CPAs by calling Tax Law Offices of David W. Klasing at (800) 681-1295 or clicking here to schedule a reduced rate initial consultation online.
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 or state tax authority audit, eggshell audit, reverse eggshell audit, or criminal tax investigation, it is in your best interest to contact an experienced tax defense attorney to determine your best route back into federal or state tax compliance without facing criminal prosecution.
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 disclosure before 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!
More Commonly Asked Tax Audit Questions
- How should Tax Audits be Handled by Criminal Tax Counsel?
- How to survive audit when I cheated on return being audited
- What is an eggshell audit?
- What is a reverse egg shell audit?
- Why is a reverse egg shell audit dangerous for a taxpayer?
- 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 IRStaxauditor’sss 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?
- What is the crime of failure to pay tax? What is punishment
- Crime of making or subscribing false return or document
- Criminal Investigation Division investigation tactics
- Tax crimes related to employment tax forms and trust funds
- Tactics to defend or mitigate IRS criminal tax charges
- How the IRS generates leads about suspected tax crimes
- What is the crime ”evasion of assessment” of tax?
- Specific examples of “attempting” to evade tax assessment
- What is the so-called Spies evasion doctrine?
- Does overstating deductions constitute tax evasion?
- Is it tax evasion if my W-4 contains false statements?
- IRC §7201 attempt to evade vs. common-law crime of attempt
- What are the penalties for Spies tax evasion?
- How government proves a taxpayer attempted tax fraud
- What is a tax that was “due and owing.”
- What is evasion of assessment for tax liability?
- Is evasion of assessment different from evasion of payment
- Does the IRS have a dollar threshold for tax fraud?
- What is the IRS burden of proof for tax fraud convictions?
- Are Tax Laws Constitutional?
- What is the source of law that defines tax evasion?
- Does section 7201 create two distinct criminal offenses?
- Does tax evasion definition include partnership LLC
- What if I helped someone else evade taxes?
- Is it illegal to overstate deductions on my tax return?
- Is it illegal to conceal bank accounts from the IRS?
- Do later losses justify prior deductions?
- Common reasons the IRS and DOJ start investigations
- What is the Mens Rea component of tax crimes?
- What is a proffer agreement and what are the risks?
- Why to have an attorney to review a proffer agreement
- Why enter into a proffer agreement?
- Limited use immunity from proffer agreements
- Difference between civil and criminal fraud allegation
