In April 2018, a federal jury convicted 51-year-old defendant William Todd Coontz, a former author, business owner, and minister from Fort Lauderdale, Florida, of two tax offenses: (1) aiding and assisting with false returns (which violates 26 U.S. Code § 7206), and (2) failing to pay taxes (which violates 26 U.S. Code § 7203). Though sometimes treated as a civil matter, failing to pay one’s taxes can also be treated like a criminal offense, depending on factors like the taxpayer’s intent, the statute of limitations, and the burden of proof the government feels it is able to meet, as discussed in our article on the difference between criminal tax evasion and civil tax fraud. If you owe unpaid state or federal taxes, the safest course of action is to discuss your situation and the next steps with a tax compliance attorney and CPA immediately. The sooner and more proactively you address the problem with an experienced tax lawyer, the less interest you will owe the IRS – and the lower the risk of criminal prosecution will be.
Defendant Convicted, Sentenced After Hiding Income, Failing to Pay Federal Taxes
Originally from Florida, defendant William Todd Coontz was tried – and convicted – in federal court in North Carolina, where he practiced as a minister. According to a press release from the U.S. Department of Justice (DOJ), Coontz engaged in a number of violations during the tax period from approximately 2000 through 2014. The DOJ indicated that these violations included, but were not limited to, the following:
- From 2000 to 2014, Coontz (1) filed late tax returns with the IRS, and (2) “consistently failed” to pay tax debts when due, “despite receiving multiple letters and late notices from the IRS.” In particular, the press release highlighted the period from 2011 to 2013, during which Coontz, filing delinquent returns, amassed and failed to pay tax liabilities exceeding $326,000.
- For the tax years 2010 to 2013, Coontz “also filed false federal income tax returns… which underreported his income.” For example, Coontz claimed business travel expenses despite being reimbursed for the costs, causing his income to appear lower than it actually was. Moreover, “the travel reimbursement checks… were for amounts in excess of the actual travel expenses incurred,” with Coontz using fraudulent invoices to misrepresent fares and payments.
- During approximately the same period, Coontz, a writer whose publications included Please Don’t Repo My Car and other financial books, caused checks “for the purchase of books and other products” to be issued to his residence, generating more income which went unreported. Between the travel reimbursement scheme and the payments, he received for books and other products, “Coontz concealed and cashed at least 102 checks… totaling at least $252,037.99” during that time. He continued this practice into 2014, when Coontz “cashed at least 32 checks totaling $105,454.90 which were not reflected in his accounting records.”
- Additionally, during the period from 2010 through 2013, Coontz “spent substantial amounts of business funds to pay for personal expenditures” – at least $367,000, used primarily on dining out, buying clothing, and going to movie theatres. Significantly, the press release notes that Coontz acted against the advice of his CPA, who warned Coontz against “comingling personal and business funds” – an action that not only makes it easier for creditors to pierce the corporate veil successfully, but further, invites suspicion from the IRS. In its handbook on recognizing and developing tax fraud cases, the IRS references the “failure to follow the advice of an accountant, attorney or return preparer” (and similarly, “failure to make full disclosure of relevant facts to the accountant, attorney or return preparer”) as an indicator of fraud.
In January 2019, Coontz was sentenced to 60 months in federal prison for his crimes. Additionally, he was ordered by the court to pay the IRS restitution totaling more than $755,000. Furthermore, Coontz will be subject to one year of supervised release once he completes his prison sentence.
IRS Tax Evasion Lawyers Serving Northern and Southern California
At the Tax Law Office of David W. Klasing, we are tax evasion defense attorneys with extensive experience representing taxpayers and business entities in civil and criminal matters, including state and federal audits, IRS criminal investigations, and tax appeals. Whether we are appearing in Tax Court, before the Internal Revenue Service, or before a state tax agency such as the California Franchise Tax Board, we provide sophisticated, strategic, around-the-clock guidance in complex foreign and domestic tax issues. To arrange a reduced-rate tax consultation with our IRS tax attorneys and CPAs, contact the Tax Law Office of David W. Klasing online, or call us today at (800) 681-1295.
Also, we’ve expanded our offices! In addition to our offices in Irvine and Los Angeles, the Tax Law Offices of David W. Klasing now have offices San Bernardino, Santa Barbara, Panorama City, Oxnard, San Diego, Bakersfield, San Jose, San Francisco, Oakland and Sacramento.
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