The civil and criminal penalties levied on tax evaders can be life-altering. The United States government works diligently to uncover tax evasion schemes and punish their perpetrators.
For instance, in August of 2023, a California couple was sentenced for their involvement in such a scheme. Brian Beland received a 21-month prison sentence and a $30,000 fine, while Denae Beland was sentenced to five years of supervised release and a $25,000 fine. Their scheme involved filing false tax returns, falsely categorizing personal expenses as business expenses, and obstructing an IRS audit.
If you have encountered a tax-related legal issue, get help from our experienced Dual-Licensed Tax Lawyers & CPAs by calling Tax Law Offices of David W. Klasing at (800) 681-1295 or clicking here to schedule a reduced rate initial consultation.
Brian and Denae Beland Face Federal Prison for Tax Evasion
In a recent legal development, a couple from El Dorado Hills, California, has been sentenced for their involvement in a complex tax evasion scheme. Brian Beland, aged 39, received a 21-month prison sentence along with a $30,000 fine. Meanwhile, Denae Beland, aged 40, was sentenced to five years of supervised release and fined $25,000. The sentencing comes after an eight-day trial, during which Brian Beland was found guilty of four counts, including filing false tax returns for the years 2011, 2012, and 2013 and corruptly impeding a subsequent tax audit. Denae Beland was also found guilty of obstructing the tax audit.
Details of the Tax Evasion Scheme
The Belands’ tax evasion scheme revolved around falsifying their tax returns to avoid paying federal income taxes on their substantial income of approximately $1.1 million. Brian Beland, who worked as a mortgage broker for Wells Fargo and later Bank of America from 2011 to 2013, claimed business expenses exceeding $800,000 for all three years. This allowed him to pay only a minimal 2% tax on his substantial earnings. Denae Beland, an attorney licensed by the California State Bar, was also implicated in the scheme.
Obstructing the IRS Audit
When the IRS initiated a civil audit of their taxes, the Belands attempted to conceal their fraudulent activities. They falsely classified personal expenses as business expenses, provided false information to the civil examiner, and hindered the Internal Revenue Service (IRS) audit by withholding requested documents. During the audit, they claimed that their business records had been destroyed or lost, even though IRS agents discovered tax records and receipts from the years in question during a search warrant executed at their residence. These records contradicted the Belands’ claims of document destruction and further revealed their attempt to justify fraudulent deductions for personal expenses.
Consequences of Tax Evasion
The sentencing of Brian and Denae Beland underscores the serious consequences of tax evasion. Their actions deprived the government of tax revenue and created an unfair advantage over law-abiding taxpayers. The Belands’ extravagant spending on vacations, vehicles, home improvements, and other luxuries funded by tax evasion exemplifies the consequences individuals may face when they fail to comply with federal tax obligations. This case serves as a reminder that the IRS is committed to investigating and prosecuting those who engage in tax fraud, ensuring accountability for individuals subject to tax laws. It is also worth noting that Denae Beland’s legal career was affected as she was suspended from practicing law in California as a result of this conviction.
Conclusion
This case is a reminder of the government’s commitment to prosecuting tax fraud. If you are concerned that you may face criminal charges for tax evasion, then our Dual-Licensed Tax Lawyers & CPAs will provide you with guidance and support. We can determine the appropriate steps to take and fight to avoid the assessment of criminal penalties in your case.
See the following if you have cheated on your tax returns and find yourself under audit:
https://klasing-associates.com/survive-a-tax-audit/
See the following if you are under criminal tax investigation:
https://klasing-associates.com/criminal-tax-defense/
See the following if you have a history of cheating and can sleep at night anymore because you are worried about it:
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 audit, eggshell audit, reverse 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 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!
How Are Tax Evaders Caught?
There are many different methods that the IRS utilizes to identify tax evaders. For example, the agency may employ any of the following without or without the use of artificial intelligence:
Data Matching and Information Reporting
The IRS employs sophisticated data-matching techniques and relies on information reporting to catch tax evaders. Financial institutions, employers, and other entities must report various financial transactions and income to the IRS. The IRS cross-references this information with what taxpayers report on their returns. Discrepancies or omissions can trigger audits and investigations.
Random Audits and Targeted Audits
The IRS conducts both random and targeted audits to detect tax evasion. Random audits are conducted without any specific reason and serve as a deterrent. On the other hand, targeted audits focus on specific issues or groups of taxpayers that are more likely to engage in tax evasion, such as high-income individuals or those claiming unusual deductions.
Whistleblower Program
The IRS has a whistleblower program that encourages individuals with knowledge of tax evasion to come forward. Whistleblowers can receive a percentage of the taxes recovered as a reward for their information. This program incentivizes people to report tax evasion by others.
Many different parties may act as whistleblowers in tax evasion cases. For instance, former employees, business partners, or acquaintances who have firsthand information about tax evasion schemes may choose to blow the whistle. Additionally, businesses’ competitors may report suspected wrongdoing to the IRS in hopes of leveling the playing field within their industries.
Assessing Tax Returns
The IRS employs sophisticated statistical software to analyze tax returns. They use algorithms to flag returns that show unusual patterns or discrepancies, such as unusually high deductions, inconsistent income reporting, or failure to report income from various sources. These flagged returns are then subject to further scrutiny.
International Agreements
The IRS collaborates with foreign governments and financial institutions to combat tax evasion involving offshore accounts. International agreements, such as the Foreign Account Tax Compliance Act (FATCA), require foreign banks to report accounts held by U.S. taxpayers. The IRS can then identify individuals who attempt to hide income and assets in foreign accounts.
The Team at Our Firm Can Help Resolve Your Tax Issues
Get support from our Dual-Licensed Tax Lawyers & CPAs at the Tax Law Offices of David W. Klasing by dialing (800) 681-1295.
We Are Here for You
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.
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