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Can a CEO / CFO/ Controller/ Any Officer or Accounting Employee be Criminally Charged for Tax Fraud at the Company?

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    Can a CEO / CFO/ Controller/ Any Officer/ Accounting Employee of a Company be Criminally Charged for Tax Fraud at the Company?

    As the CEO, Founder or Owner of a company, you are usually aware of the most important happenings with your company, including the way your taxes are being filed. If the IRS can prove that you willfully participated in or orchestrated a scheme to defraud the government of tax revenue to which it is entitled, it does not matter if you are the CEO or a new hire: you have exposed yourself to criminal liability. For the best chances of working out a deal to mitigate the damage and bring the matter to the most favorable resolution possible, contact our skilled tax attorneys and CPAs at the Tax Law Offices of David W. Klasing as soon as possible.

    Are CEOs Able to Be Charged with Tax Fraud That Occurs at Their Company?

    The answer to this question is a resounding yes! CEOs CFOs / Controllers /Any Officer /Accounting Employee can be, and often are, held accountable for tax fraud or other tax crimes that occur under their watch. Most of the time, the behavior will have to have been willful on the part of the CEO, like telling subordinate to commit tax fraud or committing it themselves, for it to constitute a chargeable tax crime. However, there are times when the prosecution will be able to prove its case under a theory of “willful blindness.” The basic concept of willful blindness is that even if you did not technically know that tax fraud was being committed, you should have known better due to your position and background. Your lack of knowledge was due to your intentional avoidance of the facts rather than a genuine mistake or oversight.

    Of course, there may be situations where the CEO genuinely did not know what was happening or made an unintentional error when filing, rather than engaged in a deliberate scheme to defraud the IRS. However, because the CEO has oversight over everything that happens and often has to sign-off on tax-related documents, this can be a tough argument to make, especially considering the possibility of a willful blindness jury instruction. The best thing you can do if you are a CEO who knows they have exposed themselves to potential criminal liability is to hire a skilled tax lawyer like those at the Tax Law Offices of David W. Klasing before an audit or criminal investigation begins. We can try to get you back into compliance through a voluntary disclosure program. If you have already been charged, our lawyers can work to negotiate a settlement or fight for a not guilty verdict at trial, where the government must prove its case beyond a reasonable doubt.

    Examples of Cases Where a CEO Was Successfully Charged with Tax Crimes

    The following are just a few of the many examples of conduct that has led CEOs to be convicted of tax crimes. In 2015, the former CEO of Arrow Trucking Company was sentenced to 7 and a half years in jail for tax fraud. According to the plea agreement, the CEO and others conspired to defraud the United States by failing to account for and pay federal withholding taxes on behalf of Arrow Trucking Company and by making payments to the CEO outside the payroll system.  The CEO and others also withheld Arrow Trucking Company employees’ federal income tax withholdings, Medicare, and social security taxes, without reporting or paying over these taxes to the IRS, despite knowing they had a duty to do so.

    In 2019, the former CEO of a Pennsylvania oil and gas company was charged with and eventually pleaded guilty to tax evasion and the related tax-adjacent crime of bank fraud. After entering a plea agreement, he was sentenced in July 2020 to 14 years in prison for submitting false financial records on loan applications and failing to report over $650,000 worth of income on his tax returns. Also in July 2020, the CEO of a McCandless, PA cleaning company was sentenced to two years in prison for tax evasion that occurred under his watch at his company.  The CEO entered a plea agreement where he admitted to underreporting his income and assets, including two Bentley sports cars and a bank account in his son’s name.

    If You Are a CEO / CFO / Controller / Officer /Accounting Employee of a Company Concerned That Your Actions Have Opened You Up to Criminal Tax Liability, Call Our Skilled Tax Attorneys Today

    As the old saying goes, the buck stops at the top. For this reason, CEOs must be cautious when signing off on tax returns and other tax documents for their company, as a strong possibility exists that you will be criminally charged if tax fraud is found to be occurring within the company you run. At the Tax Law Offices of David W. Klasing, our experienced tax attorneys can work to bring you back into compliance if charges have not yet been filed. If charges have been filed, we can work to mitigate the damage and bring the matter to the best possible resolution for you and your future. To set up a consultation, call our office today at (800) 681-1295 or book ONLINE today.

    Note:  As long as a CEO / CFO / Controller / Officer /Accounting Employee 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 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, Kovel CPAs 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!

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    Regardless of your particular 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.

     

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