According to a Department of Justice press release, two Florida residents were recently found in contempt of court after violating a federal judge’s order prohibiting them from preparing tax returns from their business, headquartered in North Lauderdale, Florida. This story exemplifies the seriousness of engaging in tax-related crimes, especially when they pertain to the accurate and timely filing of an individual or business tax return. If you have failed to file a tax return for one or more years or have filed a tax return containing information that is not accurate, you should consider consulting with an experienced tax defense attorney to work on coming into tax compliance.
Court records reveal that Wendell Devallon and Berald Dominique were the owners and operators of Tax Time Group, Inc. The defendants and their tax preparation business primarily served clients in North Lauderdale, Florida, but also had offices in New York, Indiana, and North Carolina. After suspecting that the defendants and their business were fraudulently preparing tax returns by claiming phony expenses and fictitious credits, the Department of Justice sought to enjoin the defendants and their business from preparing tax returns. A federal court granted that request for preliminary injunction in early 2021.
In May, federal prosecutors sought a temporary restraining order to further prevent the defendants from operating their business after evidence surfaced that the pair were still preparing tax returns, in violation of the court’s order. Additionally, federal prosecutors requested that the court find the defendants in contempt. In the motion for the temporary restraining order, federal prosecutors alleged that the defendants were still preparing returns from their North Lauderdale business but routed paperwork through their satellite offices to give the appearance that the returns were being prepared out of state. Additionally, federal prosecutors alleged that proceeds from prepared returns during such time were deposited into accounts of nominee entities.
The defendants stipulated that there was sufficient evidence to find them in contempt and with the Department of Justice, they jointly moved for an order holding the defendants in contempt. The federal judge presiding over the case will determine the sanctions for the contempt later.
Although most of our readers are not tax preparers who have violated a preliminary injunction, the undertone of the story should resonate just the same: the Department of Justice, together with the IRS, takes enforcement of the nation’s tax laws incredibly seriously. Federal and state authorities will not hesitate to utilize the criminal process to ensure tax compliance. Although not all tax noncompliance can result in criminal liability, many instances can and frequently do.
The first step to determining what action you should take about your tax compliance history is determining the level of exposure that you currently have. Working with an experienced dual licensed Tax Defense Attorney & CPA, you will identify areas of noncompliance and the associated civil or criminal penalties that could be imposed if discovered. Next, you will work with your seasoned tax lawyer to develop a plan that keeps your physical and financial freedom top of mind. Working alongside a combo Tax Attorney & CPA ensures that you do not have to go up against the IRS alone and that you can focus on things in life that matter the most.
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.
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.
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Note: 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 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!
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