Recently, the family behind a popular Utica donut chain were sentenced to serve time behind bars and pay millions in restitution for a multi-year scheme involving the concealing of cash sales and making under-the-table payments to employees.
The Zourdos family were initially indicted in 2020 on several charges of tax evasion and filing false federal tax returns. At trial, each family member was found guilty on all charges. The Dippin Donuts saga shows an increase in enforcement action on the part of the IRS that should be expected to continue in the near future.
To avoid unfortunate mistakes or willful acts of evasion on past tax filings coming back to haunt you, call (800) 681-1295 or click here to schedule a reduced rate case evaluation with the Tax Law Offices of David W. Klasing.
John and Helen Zourdos owned and operated Dippin Donuts on Erie Boulevard and Black River Boulevard in Rome and on Seneca Turnpike in New Hartford. Their son, Dimitrios Zourdos, actively participated in the business’ operations, according to court documents. All three were indicted in October of 2020 on charges that they hid cash sales from the IRS and paid some employees off the books.
Prosecutors with the United States Attorney's Office claim that, across the taxable years from 2013 to 2017, the family hid more than $2.8 million in cash sales and evaded more than $650,000 in individual taxes by depositing funds directly to their personal bank accounts rather their business accounts. Excess funds were used to purchase items like luxury vehicles, according to court documents. Prosecutors claimed in court that John and Helen Zourdos had a net worth of approximately $3.4 million.
Following a 10-day trial before U.S. District Court Judge David Hurd of the Northern District of New York, a jury found all three family members guilty on all charges in November of 2021, according to court records. These convictions carry maximum sentences of five years in prison on each count of conspiracy and tax evasion and three years on each count of filing false returns, as well as fines of up to $250,000 and a three-year term of supervised release.
None of the family members received the maximum sentence, but each was sentenced to serve prison time. John Zourdos was sentenced to 30 months in prison with a three-year period of supervised release. Helen Zourdos received a 20-month prison sentence with three years of supervised release to follow. Dimitrios Zourdos was sentenced to 10 months in prison and a three-year period of supervised release.
In addition to prison time and supervised release, each of the three family members convicted were also ordered to pay over $2 million each in restitution to the IRS for the tax loss that their evasion caused.
The Treasury Department estimates that around $600 billion dollars go uncollected in taxes each year because of lacking enforcement, and that the top 1% of taxpayers are responsible for a quarter of that uncollected tax revenue. Those numbers are for unpaid tax and seemingly do not even include estimates for uncollected penalties.
Increasing tax revenue by going after high-asset taxpayers, investors, and corporations has been a stated goal of the Biden Administration and its allies in Congress for a while now, so it would not be surprising for these efforts to increase.
With increased audits and criminal tax enforcement on the horizon, it is important to work with a tax professional you can trust and to get out ahead of any potential tax issues you face while there is still time to fix any past mistakes. Consider working with a new tax attorney or CPA today rather than risking your financial future, tax penalties, or even potential jail time for past tax mistakes.
If you are concerned about the possibility of an IRS audit or criminal investigation into you or your business and past filings, it is important to assess all possible options to avoid such a situation.
The federal government’s voluntary disclosure programs provide an avenue for taxpayers who are aware of noncompliance in their filing history to come forward with additional information without being coerced into doing so through audit or criminal tax investigation. By using the voluntary disclosure option, many taxpayers avoid can avoid or reduce the penalties and fines that they might otherwise face if the government had to seek out the violations themselves and secure a pass on criminal tax prosecution.
However, voluntary disclosure may not be right in every situation. Firstly, if an audit or criminal tax investigation is already underway, your decision to voluntary disclose will likely have no effect on the consequences and may even end up doing more harm than good.
No matter what, you should never attempt to apply for voluntary disclosure with the IRS without first having your case assessed by a seasoned Criminal Tax Defense Lawyer. Your lawyer can also help you apply and disclose appropriate documents where appropriate so that you obtain the benefits of disclosure without having to expose yourself so much where it would be unnecessary.
If you will potentially be affected by increased IRS audits and criminal tax enforcement, call (800) 681-1295 or click here to schedule a reduced rate initial consultation with the Criminal Tax Defense Attorneys and CPAs at Tax Law Offices of David W. Klasing.
If you are dealing with serious tax matters, you deserve tax assistance that you can rely on. Schedule your first reduced-rate case evaluation with our Criminal Tax Defense Lawyers by calling (800) 681-1295 today or schedule online here.
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.
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 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, Kovel CPAs 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!