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.
Family Behind Local Donut Shop Chain Each Receive Prison Sentences and Pay $2 Million in Restitution
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.
Indictment
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.
Conviction
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.
Sentencing
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.
Dippin Donuts is an Example of Increased IRS Enforcement
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.
You Can Prevent an IRS Criminal Investigation Through Voluntary Disclosure
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.
Call Our Criminal Tax Defense Attorneys and CPAs for Help Today
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.
Concerned About Criminal Tax Charges? Call the 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!
More Commonly Asked Tax Audit Questions
- How should Tax Audits be Handled by Criminal Tax Counsel?
- How to survive audit when I cheated on return being audited
- What is an eggshell audit?
- What is a reverse egg shell audit?
- Why is a reverse egg shell audit dangerous for a taxpayer?
- Warning signs of a criminal referral from an IRS audit
- Effective tax defense counsels goals in an egg shell audit?
- How are the 4 goals and outcomes 1 and 2 best obtained?
- What are the possible outcomes of an egg shell audit?
- Is it my right to know why I was selected for examination?
- What can I do to prepare for an audit?
- What is an IRS civil examination?
- How IRS decides which tax returns are audited
- What are my appeal options if I disagree with IRS?
- What are my basic taxpayer rights if the IRS audits me?
- Options if I am unable to pay at the conclusion of audit
- What a 30 or 90-Day Letter from the IRS means
- What is involved with appealing disagreements?
- Rights to disagree with IRS tax auditor’s findings
- Can I stop the IRS from repeatedly auditing me?
- Can I have the examination transferred to another area?
- Can I record my IRS interview and is it a good idea?
- How many years of returns are at risk during an audit?
- Common reasons for the IRS to conduct a tax audit
- How to avoid negative consequences from an IRS interview
- Have to agree to interview by taxing authority directly?
- Are all audits the same?
- What should I do if the IRS is investigating me?
- What if I don’t respond to a taxing authority audit notice
- Your rights during an IRS tax audit
- Risks of attending an IRS audit without a tax lawyer
- Most common audit technique used by taxing authorities
- Don’t go into an IRS audit without representation
- Why hire an attorney to represent me in an audit?
- Why hire David W. Klasing to represent me in an audit
Questions and Answers for Criminal Tax Representation
- When tax defense counsel parallels tax crime investigation
- Guilty of tax obstruction by backdating documents?
- To be found guilty of tax obstruction must a person actually be successful in impeding the IRS’s functions?
- Help! The Document I Gave the IRS Had False Information
- Tax crime aiding or assisting false return IRC §7206(2)
- What is the crime known as tax obstruction § 7212?
- What is the difference between tax perjury and tax evasion?
- What is the tax crime commonly known as tax perjury?
- What is a Klein Conspiracy?
- Increased possibility of civil action in IRS investigation
- Am I Guilty of Tax Evasion if the Law is Vague?
- What happens if the IRS thinks I committed tax crimes?
- What are ways to defend against a tax evasion charge?
- Difference between criminal tax evasion and civil tax fraud
- What accounting method does the IRS use for tax fraud
- Can I Change Accounting Method to the Accrual Method
- What is the willfulness requirement for tax evasion?
- I didn’t know I committed tax fraud. Can I get off?
- Concealed assets from IRS. Can I avoid tax evasion charges
- How government proves I willfully engaged in tax evasion
- What is the venue or court where a tax crime case is heard?
- Must the IRS prove tax crimes beyond a reasonable doubt?
- Is it a crime to make false statements to the IRS?
- Will the IRS overlook my tax evasion if it’s minor?
- Failed to tell IRS about my nominee account
- Audit risk with cash based business transactions
- How to defend a client charged with tax evasion
- Is it tax evasion if I didn’t file income tax return?
- Government says I attempted to evade my taxes. Now what?
- I forgot to pay my taxes or estimated tax. Is this a crime?
- Government proof I “willfully” failed to pay taxes
- 5 Ways to Respond to Tax Evasion Charges
- Being audited after using a tax professional
- Rules for what an IRS agent can do while investigating me
- How tax preparers, attorneys and accountants are punished
- How the IRS selects tax crime lead for investigation
- How does the IRS prosecute suspected tax crimes?
- Does IRS reward informant leads for suspected tax crimes?
- How the government proves deficiency in a tax evasion case
- Do prior tax crimes factor into new IRS tax convictions?
- Requesting conference before investigative report is done
- Requesting conference after IRS Special Agent Report
- What are my rights during an IRS criminal investigation?
- Avoid prosecution for tax crime with voluntary disclosure?
- Defense tactics that make it hard for to prove willfulness
- How a tax attorney can stop your criminal tax case?
- What can you generally tell me about tax crimes?
- Continuing filing requirement with investigation pending
- Federal criminal code crimes that apply to tax issues
- Penalty for making, subscribing, and filing a false return
- CID special agent’s report for criminal prosecution
- What is the discovery process in a criminal tax case?
- What the IRS includes in indictment for tax case
- What is the hardest element of a tax crime to prove?
- IRS methods of gathering evidence to prove tax crime
- What does a grand jury do in IRS tax crime prosecution?
- Failure to keep records or supply information
- Failure to make a return, supply information, or pay tax
- What is attempting to evade payment of taxes?
- What is income tax evasion and how is it punished?
- What is attempted income tax evasion?
- What is the crime of failure to pay tax? What is punishment
- Crime of making or subscribing false return or document
- Criminal Investigation Division investigation tactics
- Tax crimes related to employment tax forms and trust funds
- Tactics to defend or mitigate IRS criminal tax charges
- How the IRS generates leads about suspected tax crimes
- What is the crime ”evasion of assessment” of tax?
- Specific examples of “attempting” to evade tax assessment
- What is the so-called Spies evasion doctrine?
- Does overstating deductions constitute tax evasion?
- Is it tax evasion if my W-4 contains false statements?
- IRC §7201 attempt to evade vs. common-law crime of attempt
- What are the penalties for Spies tax evasion?
- How government proves a taxpayer attempted tax fraud
- What is a tax that was “due and owing.”
- What is evasion of assessment for tax liability?
- Is evasion of assessment different from evasion of payment
- Does the IRS have a dollar threshold for tax fraud?
- What is the IRS burden of proof for tax fraud convictions?
- Are Tax Laws Constitutional?
- What is the source of law that defines tax evasion?
- Does section 7201 create two distinct criminal offenses?
- Does tax evasion definition include partnership LLC
- What if I helped someone else evade taxes?
- Is it illegal to overstate deductions on my tax return?
- Is it illegal to conceal bank accounts from the IRS?
- Do later losses justify prior deductions?
- Common reasons the IRS and DOJ start investigations
- What is the Mens Rea component of tax crimes?
- What is a proffer agreement and what are the risks?
- Why to have an attorney to review a proffer agreement
- Why enter into a proffer agreement?
- Limited use immunity from proffer agreements
- Difference between civil and criminal fraud allegations
Questions and Answers on Unfiled Back Taxes
- What are the common issues that non-filers face?
- Risk of audit after filing delinquent prior year returns
- Can substitute return deficiency be discharge in bankruptcy
- Substitute return modified by subsequent delinquent return?
- Do I file every delinquent return for each missing year?
- How does the IRS identify non-filers?
- How important is it to the government that I didn’t file?
- Delinquent tax return criminal prosecution likelihood
- Will I get a refund on a delinquent tax year?
- What happens after enforcement action has begun?
- Should I use an attorney, EA or a CPA to represent me when I re-enter the tax system?
- Why do people drop out of the tax system?
- What happens after the IRS identifies me as a non-filer?
- IRS has not previously filed substitute returns
- Tax attorney representation when re-entering tax system
- How will the government force me to file returns?
- What penalties can IRS impose on delinquent tax filings?
- What should I do to re-enter the tax system?
- Can Law Office of David W. Klasing help me re-enter system?
- Will tax collection taken by authorities affect my credit
- I concealed bank accounts from the government
- Forgetting or failing to file tax return
