Federal and State Tax evaders may face significant penalties, including fines, interest on unpaid taxes, and criminal tax charges. These penalties can vary based on the severity of the evasion at issue, with more substantial cases potentially leading to imprisonment. At the federal level, a cumulative multiyear tax loss of $30,000, for example, is one year in jail under the federal sentencing guidelines.
If you need assistance dealing with a tax-related issue, seek help from our Dual-Licensed Tax Lawyers & 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.
Prison Sentence Assessed Against Tax Evader in California
In recent legal proceedings, Craig Steven Voyton, the owner of an artificial turf company based in Newport Beach California, has been sentenced to 15 months in prison for his involvement in a tax evasion scheme. Voyton, a resident of San Pedro, had previously pleaded guilty to a single count of tax evasion in July. He admitted to deliberately concealing approximately $8.9 million in gross income generated by his business, Smart Grass LLC, over five years. This manipulation of income was done to evade paying taxes totaling $946,479. Additionally, Voyton used fraudulent W-9 Forms with numerous customers, diverting payments away from himself and his business.
Prosecutors also revealed that Voyton had misappropriated some of the unreported income for personal use, including using $63,000 from a business account to invest in cryptocurrency and spending $500,000 on real estate acquisitions in Nevada and Mexico. Voyton’s attorney confirmed that he had repaid the owed taxes, along with penalties and interest, totaling $3.75 million.
During the sentencing, Voyton expressed remorse for his actions and acknowledged his responsibility. He shared that he had discouraged friends and family from attending the hearing, recognizing the pain his actions had already caused them. Despite the gravity of his actions, Voyton emphasized that he had learned valuable lessons from the experience.
Assistant U.S. Attorney Charles Pell argued for a two-year prison sentence, emphasizing the importance of deterrence for such financial crimes. However, the U.S. District Judge, John W. Holcomb, opted for a 15-month sentence, considering the nonviolent nature of the offense, Voyton’s expressed remorse, and his desire to resume running his business. Judge Holcomb granted Voyton until January 8 to report for custody.
This case shows that the U.S. government treats tax evasion charges very seriously. If you suspect you may be accused of tax evasion, our Dual-Licensed Tax Lawyers & CPAs will determine the proper course of action. Our team will help navigate the legal process so that you may avoid penalties similar to those levied on Charles Voyton.
Getty Back into Compliance without Facing Criminal Tax Prosecution
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 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!
Potential Consequences of Tax Evasion
As previously mentioned, the consequences of tax evasion can be severe. For example, those who illegally dodge their tax obligations may face any of the following:
Financial Penalties
Individuals convicted of tax evasion often face substantial financial penalties. These penalties are separate from the taxes owed and can amount to a significant portion of the unpaid tax amount. Penalties can vary depending on the severity of the evasion, but they can be financially crippling.
Civil and Criminal Penalties
Tax evasion can result in both civil and criminal penalties. Civil penalties, as mentioned earlier, involve monetary fines. Criminal penalties may include fines, probation, community service, and imprisonment. The distinction between civil and criminal charges depends on the circumstances of the case at hand.
Loss of Assets and Property
Individuals convicted of tax evasion may be forced to forfeit assets and property to satisfy their tax liabilities. Tax authorities may seize bank accounts, vehicles, real estate, and other assets to cover unpaid taxes and penalties.
Damage to Reputation
A tax evasion conviction can tarnish one’s personal and professional reputation. It may lead to difficulties in obtaining employment, securing loans, or engaging in certain business ventures. The stigma associated with tax evasion can have long-lasting effects on an individual’s life.
Loss of Professional Licenses
If convicted of tax evasion, law, finance, and accounting professionals may face disciplinary actions, including revoking their professional licenses. This can result in the loss of their livelihood and career prospects.
Increased Scrutiny
After a tax evasion conviction, individuals and their financial activities may come under increased scrutiny by tax authorities. This can lead to more frequent audits and a heightened level of oversight for an extended period, making it challenging to regain trust with tax authorities.
Difficulty Traveling Internationally
Some countries may restrict entry or visas for individuals with tax evasion convictions. International travel can become complicated, limiting personal and business opportunities abroad.
Determining Prison Sentences in Tax Evasion Cases
Prison sentences in tax evasion cases are determined based on various factors, including the nature and extent of the evasion, the amount of unreported income, and the defendant’s level of cooperation and remorse. Judges account for both the legal guidelines and the unique circumstances of each case when deciding on an appropriate sentence.
One crucial factor is the severity of the tax evasion. Cases involving substantial sums of unreported income or elaborate schemes to conceal earnings typically result in longer sentences. Additionally, the defendant’s intent and actions, such as submitting fraudulent documents, can influence the sentencing decision.
Cooperation with authorities and timely payment of owed taxes can somewhat mitigate the sentence. Expressing genuine remorse and taking steps to rectify the situation, such as paying back taxes, penalties, and interest, may also weigh positively in the defendant’s favor.
Furthermore, judges consider the nonviolent nature of tax evasion when determining sentences. While tax evasion is a serious offense, it does not involve physical harm, which may lead to shorter sentences than violent crimes.
Ultimately, each tax evasion case is unique, and the sentencing decision is at the judge’s discretion. It is important for individuals facing tax-related legal issues to seek professional legal counsel to navigate the complexities of these cases and to present the strongest possible defense.
Call Our Legal Professionals for Help with Your Tax Issues
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 fully staffed main office in downtown Irvine California, the Tax Law Offices of David W. Klasing has unstaffed (conference room only) California-based satellite offices in Los Angeles, San Bernardino, Santa Barbara, Panorama City, Oxnard, San Diego, Bakersfield, San Jose, San Francisco, Oakland, Carlsbad, Sacramento. We also have unstaffed (conference room only) satellite offices in Las Vegas, Nevada, Salt Lake City, Utah, Phoenix, Arizona & Albuquerque, New Mexico, Austin, Texas, Washington, D.C., Miami, Florida, and New York New York that solely handle Federal & California Tax issues.
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