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According to a Department of Justice press release, a Chicago-area tax preparer was the target of a civil action after he was accused of claiming phony business deductions for his clients in an attempt to secure lower tax liabilities or fraudulent refunds. This story should serve as a reminder to taxpayers that business income and related deductions are heavily scrutinized and should be given particular attention. If you have failed to file a tax return for one or more years or have filed a tax return that has omitted income or overstated deductions or claimed credits for which you were not entitled, it is in your best interest to contact an experienced tax defense attorney as soon as possible to determine the best strategy to get right with the government.
Court records reveal that the Department of Justice initiated a civil action to prevent Lavon Boyd, a tax return preparer in Chicago, from preparing tax returns in the future. Federal authorities cited instances of Boyd intentionally overstating or fabricating business expenses for his clients that resulted in fraudulent deductions. The IRS interviewed multiple clients of Boyd and most indicated they did not give him any reason to believe that the claimed deductions for business expenses were legitimate.
The government argued in their court filing that Boyd has caused substantial tax revenue loss. Although the court filing demanding that he ceases filing tax returns for a fee is only civil in nature, criminal charges could still result. A criminal tax prosecution can result in a federal prison sentence, monetary penalties, among other serious repercussions.
The IRS has always taken federal tax compliance seriously but have recently committed to increase their enforcement efforts. Over the past year, the IRS has added hundreds of new revenue agents to assist in the completion of federal audits. The added manpower signals a clear intent to ramp up examinations and other enforcement actions.
If you have failed to file a tax return for one or more years or have taken a position on a filed tax return that could not be supported if examined or criminally investigated by the IRS, you should consider working with a seasoned tax lawyer to come into tax compliance. Your tax lawyer will work with you to understand the facts of your case and recommend an effective strategy. Then, your tax attorney will represent you every step of the way and in every interaction with the IRS until your situation is resolved.
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 disclosurebefore 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!
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.
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