Earlier this month, we brought you the story of a Massachusetts business owner who was sentenced to prison for tax evasion. In that case, a former-chiropractor was investigated, charged, and convicted of crimes relating to evading federal income taxes by using several different methods to hide and misreport income. Two days after that story posted to our website, news of yet another chiropractic professional being charged with tax evasion broke. Although chiropractors are not (to our knowledge) singled out as having a high risk of audit, this story goes to show that any professional, including medical personnel, can be subject to an IRS investigation and charged in a federal court for a tax crime.
According to a press release by the Department of Justice, Donald Gibson, a chiropractor from Minnesota was charged with one count of federal tax evasion and one count of passing a fictitious obligation, in a federal court. A federal grand jury indicted Gibson at the beginning of the month after they found probable cause to exist that he had committed at least two crimes.
The indictment alleges that Gibson failed to file federal tax returns with the IRS for tax years 2004 through 2010. Gibson earned the majority of his income as a chiropractor. When the IRS found out (and they most always find out) that Gibson had not been living up to his duty to pay Uncle Sam, they sent him a tax bill for approximately $330,000. At this point, most taxpayers would proceed down one of a few different paths: they would work out a payment plan with the IRS, they would declare bankruptcy and try to get as much of the tax bill wiped out, or they may (as many taxpayers do) ignore the bill and wait until the IRS garnishes their wages or threatens to seize their property to choose one of the first two options. But Mr. Gibson forged his own path. He submitted a phony bond to the Department of the Treasury that he claimed to be valued at $300 million.
Gibson also engaged in several different methods that are somewhat common to those professionals who evade federal income tax. The indictment charges that Gibson cashed his paychecks at a check-cashing business and stored his business income on pre-paid debit cards, in order to keep his wealth out of banks that could be easily discovered by the federal government. Additionally, Gibson registered the Sovereign Christian Mission as a non-profit with the Oregon Secretary of State and used the entity to hold some of his income and to pay his personal expenses.
Gibson faces up to a combined 30 years in prison for the combined federal tax evasion and passing a fictitious obligation charges. An indictment from a federal grand jury does not necessarily mean that Gibson is guilty of committing a crime, but merely affirms that there is probable cause to bring him to trial. We will provide updates to this story as we receive them.
Mr. Gibson’s story is not uncommon. Many taxpayers, whether acting intentionally or not, fail to pay the proper amount of federal income tax each year. Many of those taxpayers do not worry about an examination because they believe that they are just a small fish in a big pond and their chances of being caught are incredibly small. But one thing is for certain, when you find yourself in the midst of an IRS investigation, all of your prior assumptions about being caught go out the window. After the government has decided to hone in on your financial affairs, things can move very quickly and many different law enforcement groups (including the IRS Criminal Investigations Division) can become involved, making the process frightening (to say the least).
When you are in trouble with the IRS, your first priority should be to contact an experienced criminal tax attorney. Time and time again, many taxpayers under investigation try to run the gauntlet of representing themselves, only to reach the end of the line in handcuffs and being ordered to pay an obscene amount to the government in penalties and restitution. Only a criminal tax attorney has the education and experience in the realm of criminal tax defense, criminal procedure, and constitutional law, a skill set that will ensure that you speak only when it benefits you and prevents the IRS or Department of Justice from bullying their way into your papers and personal effects to gather evidence for your trial.
The tax law and accounting professionals at the Tax Law Offices of David W. Klasing have extensive experience in representing a vast array of taxpayers from all walks of life. Whether you are an individual or a business owner, and whether you are facing an examination or a full-blown criminal prosecution, our team is ready to zealously advocate for your best interests and are here to keep you out of prison. At the end of the day, the IRS exists to collect money and the Department of Justice exists to put people in prison. Don’t become one their “success stories”. Contact the Tax Law Offices of David W. Klasing for a reduced-rate consultation, today.