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Construction Company Owner in New York Pleads Guilty to Tax Evasion

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    Illegally avoiding tax obligations can get you into big trouble. Such behavior may result in hefty fines and lengthy prison sentences. Furthermore, the reputational harm caused by tax evasion charges can be significant.

    For instance, Khuram Raja, a 37-year-old resident of Locust Valley, NY, confessed to evading personal income taxes from 2016 to 2018. As the owner of a construction company, Raja understated income in business tax returns failed to report cash transactions and omitted personal expenses. His actions caused the government to incur a $543,815 tax loss. Raja confessed in November of 2023, and his sentencing is scheduled for April 16, 2024. He is facing significant fines as well as a potential prison sentence of five years.

    If you need to resolve a tax-related issue, get help from our Dual-Licensed Tax Lawyers & CPAs at the Tax Law Offices of David W. Klasing by calling (800) 681-1295.

    The Tax Evasion Case of Khuram Raja

    In November of 2023, a resident of Locust Valley, NY, named Khuram Raja, aged 37, confessed to the act of evading personal income taxes spanning the years 2016 through 2018. The admission was made before U.S. District Judge Zahid N. Quraishi in Trenton federal court.

    Raja, the proprietor of a construction and building services company during the mentioned tax years, acknowledged guilt in connection with one count of tax evasion. Court documents and statements revealed that Raja significantly understated his company’s income in the filed business tax returns for 2016 and 2017. The misrepresentation included the failure to report cash and check transactions and the inclusion of personal expenses unrelated to the company’s operations. Additionally, Raja neglected to submit business tax returns for 2018 within the stipulated timeframe and failed to file personal income tax returns for 2016, 2017, and 2018.

    Consequently, his actions resulted in the evasion of $543,815 in personal income taxes. The charge of tax evasion carries a potential penalty of up to five years in prison and a maximum fine of $250,000, or double the gross pecuniary gain or loss, whichever is higher. Sentencing is slated for April 16, 2024, and the investigation leading to this guilty plea was credited to special agents of the IRS.

    As evidenced by the case against Raja, the U.S. government does not treat crimes of tax evasion lightly. If you suspect that you may be accused of tax evasion, then you must seek legal support immediately. Thankfully, our Dual-Licensed Tax Lawyers & CPAs are prepared to assist with your case. Our team can help protect your rights and fight to avoid significant penalties.

    Defending Against Tax Evasion Charges

    The penalties associated with tax evasion charges can be highly severe. Thankfully, there are multiple types of defenses that the accused may employ. After reviewing the specifics of your case, our legal team can help determine if any of the following may be applied:

    Lack of Intent

    Individuals facing tax evasion charges commonly assert that they lacked the intention to willfully evade taxes. Some argue that they were unaware of intricate tax laws, contending that any discrepancies were unintentional errors rather than deliberate evasion. This defense hinges on establishing that the actions leading to the charges were not driven by a purposeful intent to evade tax obligations.

    Insufficient Evidence

    Another defense strategy involves challenging tax evasion charges based on the insufficiency of evidence presented by the prosecution. Defendants may question the accuracy or relevance of financial records, transactions, or other proofs put forth to support the allegations. By casting doubt on the strength of the evidence, individuals aim to create reasonable doubt about their culpability.

    Mistaken Interpretation of Tax Laws

    Some individuals may argue that they misunderstood or misinterpreted complex tax laws, asserting that their actions were based on a genuine belief in compliance. This defense contends that any discrepancies arose from an innocent misinterpretation rather than a deliberate attempt to evade taxes, emphasizing the importance of the accused’s state of mind in determining culpability.

    Reliance on Professional Advice

    Defendants might claim reliance on professional advice as a defense, arguing that they followed the guidance of tax professionals or accountants. This defense implies that any errors or omissions were unintentional and resulted from relying on the expertise of qualified professionals. Establishing a reliance on expert advice can serve to mitigate the perception of willful evasion.

    Statute of Limitations

    In some cases, individuals may invoke the statute of limitations defense, arguing that too much time has passed between the alleged tax evasion and the initiation of legal proceedings. This defense challenges the validity of charges based on the expiration of the legally defined time limit, emphasizing the importance of timely prosecution.

    Constitutional Challenges

    Defendants may choose to challenge the constitutionality of certain tax laws or argue that their constitutional rights were violated during the investigation or prosecution. This defense strategy aims to dismiss or reduce charges by asserting that the legal process itself was flawed or violated the defendant’s constitutional rights. Engaging in constitutional challenges requires thoroughly examining the specific circumstances surrounding the case.

    Factual Disputes

    Defendants may dispute the factual accuracy of the prosecution’s claims, asserting that the circumstances leading to the charges are not accurately represented. This defense involves challenging the prosecution’s narrative by presenting alternative facts or interpretations of events, aiming to create doubt about the accuracy of the allegations.

    Voluntary Disclosure

    Some individuals facing tax evasion charges may proactively disclose their non-compliance to tax authorities before an audit or criminal tax investigation begins. This defense, known as voluntary disclosure, demonstrates a willingness to rectify errors and cooperate with tax authorities. While it may not absolve individuals of financial consequences, it can be utilized to avoid criminal tax prosecution in proper circumstances.

    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 auditeggshell auditreverse 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 AttorneysKovelCPAs 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 worthSee our Testimonials to see what our clients have to say about us!

    Contact Our Law Firm Today for Assistance with Your Tax Issues

    If you need to resolve a tax-related legal issue, seek guidance and support from our Dual-Licensed Tax Lawyers & CPAs at the Tax Law Offices of David W. Klasing by dialing (800) 681-1295.

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