For many, the American Dream is starting, growing, and running a successful business that will provide for one’s family. Potential opportunities can be found in many areas and industries provided that entrepreneurial-minded individuals are willing to work hard and play by the rules. Many people have found success beyond their wildest dreams by working hard. However, some business owners and managers are always looking for an extra “edge” over the competition. While there is nothing wrong with seeking a competitive advantage, there are certain lines that cannot be crossed.
Business owners should never seek to boost their bottom line or to gain a leg-up on competitors through any form of tax fraud. While business owners may, at the time, believe that the short-term gains are worth the risk, in the long-run all parties, will be negatively impacted. Depending on the extent of the impropriety or fraud consequences can range from monetary penalties to a Federal or State prison sentence. Working with a business tax and transaction lawyer can help your company avoid mistakes that could have criminal tax consequences.
Company was Honored as an “American success story” in 2012 by Pennsylvania’s Governor
Brian J. Bolus was the owner of the Pennsylvania environmental clean-up company known as Minuteman Spill Response which was the entity that initially came under investigation. However, Bolus first got his start when he formed Minuteman Towing Inc. in 1991 while a sophomore in college. Due to the success of that company, he started his environmental company in 2001. The sustained success of Bolus’ operations apparently necessitated the formation of an umbrella entity known as BPK Management, Inc. Minuteman Spill Response and Minuteman Towing were included under this organizational structure. In 2012, then Pennsylvania Governor Tom Corbett called the companies an example of an “American success story.”
Unfortunately, the company’s success was, at least partially, built on potential tax fraud. Originally, Bolus faced state criminal charges regarding illegally dumping solid waste from natural gas drilling operations, making fictitious employees eligible for company insurance, and overbilling clients. At one time Bolus was facing 64 charges that also included insurance fraud, corrupt organizations and theft charges. While most of the state charges were dropped and Bolus ended up facing just two state charges, the investigation ended up spurring criminal federal tax charges.
Owner Pleaded Guilty to Tax Evasion Charges
This case perhaps stands for the idea that if the government is unable to secure a conviction in any other area, it probably can still secure a tax conviction. Bolus was also accused of violating the tax code by knowingly understating the amount of income tax he and his wife owed for the 2012 tax year. Bolus was accused of shorting his taxes by $139,202. A tax evasion conviction can result in a prison sentence of up to 5 years.
Recently, Bolus pleaded guilty to the tax charge. While the charge concerned only the 2012 tax year, Bolus agreed to pay restitution in the amount of $468,765 to cover taxes, interest, and penalties for 2010 through 2012. Perhaps due to his apparent desire to correct his wrongdoing, Bolus was able to avoid a prison sentence. However, he was sentenced to probation for his tax crimes.
Tax Fraud Allegations Can Burn Even a Successful Business
While Bolus was able to avoid prison, it is important to recognize the full extent of the damage caused by tax and other charges. In 2014, Bolus’s Minuteman companies filed for Chapter 11 bankruptcy protection. In the filing, he claimed that the company’s ability to conduct business was essentially destroyed by the seizures and disruptions the tax and other civil fraud investigations caused. While business owners may think they can beat the charges they may face due to aggressive tax or business practices, the collateral damage to one’s livelihood is often already done long before a verdict is rendered. Therefore, preventing even an inkling of fraud or wrongdoing in company books and tax filings is an essential part of protecting your company.
Work with a Tax Lawyer When Accused of Tax Evasion or Fraud
If you or your company is facing a tax audit or criminal tax allegations, it is essential to have a criminal defense tax lawyer who can stand up to a federal or state tax prosecutors and fight for you. The tax audit and criminal tax defense lawyers of The Tax Law Offices of David Klasing are ready and able to fight for you. To schedule a reduced rate consultation at our Los Angeles or Irvine tax law offices, call 800-681-1295 or schedule online today.
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Here is a link to our practice overview video on:
Warning signs an audit has gone criminal
https://www.youtube.com/watch?v=gTW_KSjf57w
What is an eggshell tax audit?
https://www.youtube.com/watch?v=saJLVlER-iM
What is an effective tax defense in an IRS eggshell tax audit?
https://www.youtube.com/watch?v=7qixPqWTtvA
So you cheated on your taxes and you are under a tax audit
https://www.youtube.com/watch?v=FZce4jqQJpI
Why should I hire a tax attorney to represent me in a tax audit?
https://www.youtube.com/watch?v=NDwc4GUfBX8
Criminal Tax Evasion
https://www.youtube.com/watch?v=2rBasJaRz2o
