Colorado Man Convicted of Conspiracy and Making False Claims Against the U.S. in Tax Credit Case

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Colorado Man Convicted of Conspiracy and Making False Claims Against the U.S. in Tax Credit Case

According to a Department of Justice press release, a Denver, Colorado man was found guilty of conspiracy to commit money laundering, conspiracy to defraud the United States, making false claims against the United states, and money laundering by a federal jury last week. This case involves the improper utilization of certain tax credits related to renewable fuels, but the takeaway is broader than that and is a reminder that you should consult with an experienced tax attorney if you are unsure about the applicability of certain tax credits or if you are in search of legally permissible methods to reduce your tax liability.

At trial, prosecutors presented evidence that Martin Fields worked alongside various other individuals to file knowingly false claims for certain tax credits for the production and utilization of renewable fuels. The renewable fuel tax credit one of many credits under a federal program that rewards companies for producing renewable fuel. Tax credits are valuable to taxpayers because they offset tax liability on a dollar-for-dollar basis and certain tax credits are refundable.

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Conspirators Created Fake Company, Claimed Credits Based on Fictitious Facts

Evidence indicated that Martin and his co-conspirators created a fake entity called Shintan Inc. that held itself out to be a creator of renewable biodiesel fuel. Fields and his associates caused Shintan Inc. to file false documentation with the IRS for tax years 2010 through 2013, claiming that the entity was entitled to more than $7.2 million in renewable fuel tax credits. In reality, the company had not produced any renewable fuel that qualified under the biodiesel renewable energy credit program.

When the tax credits were refunded to the Fields and his co-conspirators, the defendants passed the funds through various bank accounts and shell companies as a part of a laundering scheme. During his trial, government attorneys presented evidence that Fields personally benefited from the scheme and received more than $1.8 million.

The other two defendants pleaded guilty to similar charges prior to Fields’ trial. Sentencing has been scheduled for early next year. As he was convicted on all of the counts against him, Fields faces up to 10 years in prison on the money laundering count, five years in prison for each conspiracy count, and five years in prison for making a false claim against the United States. Additionally, Fields will likely be sentenced to serve a term of supervised release upon the completion of his physical incarceration. Lastly, Fields is expected to be ordered to pay restitution to the IRS.

Knowing When to Consult with a Tax Attorney About Tax Credits

As we mentioned above, the biodiesel renewable energy credit applies to a relatively small number of taxpayers, but there are hundreds of different tax credits that benefit millions of taxpayers annually. Whether you are a businessperson investigating whether your company qualifies for a particular business-related tax credit, or an individual who may have claimed a higher education-related tax credit, you should always be cautious about overstating the credits that you qualify for on your taxes.

One of the most common areas of interest for an IRS agent during examination is tax credits. Because one dollar of tax credit offsets tax liability on a dollar-for-dollar basis and the fact that some are refundable, make the utilization of tax credits an easy target. Whether you have utilized tax credits on your tax return or not, if you receive notice that you have been selected for examination, it is in your best interest to contact an experienced tax defense attorney as soon as possible to discuss your strategy.

Contact an Experienced Tax Attorney Today

The tax and accounting professionals at the Tax Law Offices of David W. Klasing have worked with business owners of companies ranging in size from mom and pop to middle market to small. If you have received notice from the IRS or state taxing authorities that your payroll tax withholding, accounting, and remittance procedures are being scrutinized, our team of zealous advocates will help you develop a legal strategy aimed at preserving the integrity of you and your business. Do not let the threat of a criminal tax investigation or tax prosecution keep you up at night. Contact the Tax Law Offices of David W. Klasing today for a reduced-rate consultation.

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