According to media reports, a former Florida financial advisor was recently sentenced to serve time in federal prison after he was convicted of various crimes, including tax evasion. It is critical for taxpayers who have failed to pay their taxes for one or more years to understand that although there are millions upon millions of taxpayers in the United States, the potential consequences of being caught and prosecuted for tax evasion outweigh any potential gains. If you have failed to comply with federal or state tax laws by either not filing a tax return, paying taxes owed, or by taking an untruthful position on a filed tax return, it is in your best interest to contact an experienced tax defense attorney today to determine the best way to come into compliance.
Defendant Swindled Elderly Investors Out of Thousands, Failed to Pay Tax
A spokesman for the IRS indicated that Ames A. Young III of Milton, Florida was sentenced to 51 months in federal prison after being convicted of tax evasion and illegally swindling elderly investors out of hundreds of thousands of dollars. As a part of Young’s scheme, he approached various would-be clients, most of whom were over 55 years old, between 2010 and 2014 and presented the results of his own personal investments. He offered to assist placing their money into “side investments”, which ranged from investments in real estate to an investment in an oil and gas venture that he had no connection to. Young used the proceeds for his own personal benefit, as well as to pay off some investors that had previously “invested” with Young.
To make matters worse, Young failed to file federal tax returns for tax years 2012, 2013, and 2014. Even though Young’s fake investment activity was illegal, the stolen proceeds are still considered taxable income and are reportable on a taxpayer’s Form 1040 on an annual basis. The IRS estimated that the tax loss caused by his tax noncompliance was more than $125,000.
In addition to his 51-month federal prison sentence, Young was ordered to pay restitution to his victims in the amount of $402,207 and restitution to the IRS in the amount of $125,107. Finally, the Securities and Exchange Commission has barred Young from participating in the securities industry.
Getting Back into Tax Compliance
The defendant in the story above intentionally failed to file his tax returns, likely because he did not want to report the income that he had stolen from his “investors”. But many Americans who have failed to file tax returns for several years did not start out that way. Instead, they likely missed a tax deadline. Or perhaps they filed an extension with the intent to file their tax return later in the year and never did. After failing to file one tax return, it is easy for them to justify to themselves why they shouldn’t draw attention to themselves by filing the next year’s tax return. Before long, a taxpayer may find themselves with a decade of unfiled tax returns with a mountain of tax debt piled up. It can sometimes feel like an impossible situation to get out of.
An experienced tax attorney can be a valuable resource for taxpayers who are looking to get right with the government. Because the main priority of the IRS is to ensure compliance with federal tax laws, there are programs in place to allow for taxpayers who have fallen behind on their tax filings or payments to come into compliance. Working with your tax attorney to establish the pertinent facts and circumstances behind your situation, you will decide on a strategy to come into tax compliance. Better yet, your tax attorney will be with you every step of the way. You won’t have to go up against the IRS alone.
Note: As long as a taxpayer that has willfully committed tax crimes (potentially including non-filed returns coupled with affirmative evasion of payment) self-reports the tax fraud (including a pattern of non-filed returns) through a domestic or offshore voluntary disclosurebefore 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, 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!
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.
In addition to our main office in Irvine, the Tax Law Offices of David W. Klasing has unstaffed (conference room only) satellite offices in Los Angeles, San Bernardino, Santa Barbara, Panorama City, Oxnard, San Diego, Bakersfield, San Jose, San Francisco, Oakland, Carlsbad and Sacramento. During the COVID-19 pandemic, our staff are working from home, but have full virtual meeting capability.
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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
