According to several news outlets, a former Illinois Alderman was recently indicted for tax evasion in federal court. According to a recently unsealed indictment, Edward Vrdolyak received a large sum of money related to the settlement of a lawsuit against several tobacco companies in the 1990’s.
The criminal indictment alleges that Individual B, a partner in a law firm that led the lawsuit against the tobacco companies, offered to pay Vrdolyak over $65 million in legal fees from that case. Vrdolyak agreed to share a portion of that amount with co-defendant Daniel Soso. Soso was charged with tax evasion relating to, among other things, the income not reported from his share of the tobacco lawsuit legal fees. A superseding indictment added Vrdolyak to Soso’s tax evasion litigation earlier this month.
Vrdolyak is well known in the political community in the Chicago area. He represented Chicago’s 10th Ward from the early 1970’s to 1986. Serving in several roles within the Chicago political community, including the Chair of the Democratic Party in Cook County, Vrdolyak earned the name “Fast Eddie” from fellow Chicagoans for his tendencies to walk the line of legality while making backroom political deals.
Vrdolyak was indicted on one count of tax evasion and one count of impeding the Internal Revenue Service. But this isn’t Vydolyak’s first rodeo when it comes to federal charges. In 2008, he was charged with and pled guilty to a single count of mail fraud. That litigation also stemmed from a plan for Vrdolyak to split a payoff. In that instance, the payoff was tied to the sale of Chicago real estate.
Tax evasion and impeding the Internal Revenue Service are serious allegations that can lead to extremely severe consequences. In addition to fines and penalties, a defendant found guilty of tax evasion can be sentenced to up to five years in a federal prison. Furthermore, a defendant found guilty of impeding the efforts of the Internal Revenue Service can face up to three years in a federal prison. In addition to time actually spent behind bars, convicted defendants typically also receive supervised release, which requires the constant monitoring by a federal parole officer. Needless to say, finding yourself on the guilty end of these types of charges can significantly change your life for the worse.
Knowing when to involve an experienced tax attorney is important. When dealing with federal investigators and prosecutors, it is important to understand that each meeting or interview is an opportunity for the government to obtain incriminating statements or evidence that can be used against you at trial. Even statements that are made in a civil tax examination can be used against a defendant in a tax evasion prosecution.
An tax attorney with experience in representing taxpayers throughout the tax audit and investigation process knows the types of questions that a taxpayer under investigation should avoid and those document requests that he or she should think twice before complying with. Although some federal agents make an attempt to be friendly and gain the taxpayer’s trust, they have a job to do: identify badges of fraud and to deliver those particular cases to the IRS Criminal Investigation Division.
The tax and accounting professionals at the Tax Law Offices of David W. Klasing have extensive experience in representing taxpayers that are facing a civil audit, are the target of a civil or criminal investigation, or are involved in full-blown litigation with the IRS, Department of Justice, or a state taxing authority. Waiting until an audit or investigation has already begun to spiral downward is an important first step, but it is one that could have been taken much earlier and prevented much of the fear and frustration that a negative interaction with the IRS or Department of Justice can bring. Don’t let your troubles with the IRS keep you up at night. Contact the Tax Law Offices of David W. Klasing today for a reduced-rate consultation.
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