According to a Department of Justice press release, a former defense contractor recently pleaded guilty to tax evasion after hiding millions of dollars of otherwise taxable income from the IRS. This story illustrates the potential consequences of failing to appropriately report earned income on your annual tax return. If you have failed to file a tax return for one or more years, or have filed a tax return that is knowingly false, it is in your best interest to contact an experienced tax defense attorney to discuss the best way for you to come back into tax compliance without facing criminal tax prosecution.
Defendant Evaded Tax by Holding Certain Bonus Payments Offshore
Court records reveal that James M. Robar, of Colorado Springs, Colorado, worked as a defense contractor. Between 2012 and 2019, the defendant received substantial compensation for his services. During a portion of that period, the defendant worked as the defense contracting company’s Managing Director. After achieving Managing Director status, the defendant caused his employer to hold certain bonus payments paid to him in offshore corporate bank accounts, rather than having those payments deposited in his domestic bank account.
In 2019, after receiving a substantial bonus payment from his employer, the defendant used the funds to purchase various properties titled solely in his spouse’s name. In all, the IRS and Department of Justice estimate that the defendant failed to report approximately $5.5 million in compensation that he earned. The IRS further estimates that the defendant’s failure to report all of his income resulted in a tax loss of more than $1.5 million.
The defendant will be sentenced later this year and faces up to five years in prison. He may also be sentenced to serve up to three years of supervised release to commence upon the completion of any physical incarceration. Lastly, the defendant will likely be ordered to pay restitution to the IRS representing the total amount of tax loss that he caused.
Coming Into Compliance After Under-Reporting Income
The story above is a simple example of the severe civil and criminal penalties that are associated with under-reporting income on your annual tax return. While there are various strategies that taxpayers can employ to reduce their overall tax burden, simply failing to report earned income is not one of them. Luckily for taxpayers who may have fallen out of tax compliance, there are various programs and initiatives that allow taxpayers to come forward and rectify their tax non-compliance while mitigating some of the more severe consequences that come with a tax examination, investigation, and prosecution.
If you have failed to file a tax return for one or more years, or have filed a tax return that is knowingly false, it is in your best interest to contact a seasoned tax attorney. Together, you will work to establish the pertinent facts of your case. Then, you will mutually agree on a strategy to help bring you into compliance while mitigating risk. While you are being represented by an experienced tax lawyer, you will not have to go up against the IRS or Department of Justice alone.
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.
Our office technology allows clients to meet virtually via GoToMeeting. With end-to-end encryption, strong passwords, and top-rated reliability, no one is messing with your meeting. To schedule a reduced rate initial consultation via GoToMeeting follow this link. Call our office and request a GoToMeeting if you are an existing client.
How Can You Prevent Criminal Tax Charges?
If a taxpayer believes or is aware that they have existing noncompliance in their past tax returns and other filings, they may be able to make use of the voluntary disclosure process. Voluntary disclosure is an avenue by which noncompliant taxpayers may submit amended returns together with supplemental documentation. The government will ordinarily reward the taxpayer for coming forward voluntarily without having to be audited or criminally investigated for tax crimes by reducing the civil penalties that ordinarily apply and providing a pass on criminal prosecution for tax crimes.
Voluntary disclosure will not cure every issue, and it is important that you assess its effectiveness before taking this path. Voluntarily disclosing information that the government has already discovered will likely provide no benefit to the disclosing party. In any case, you will want to discuss your options with your Criminal Tax Defense Attorney as soon as possible to determine the best path forward.
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 disclosure before 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, Kovel CPAs 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!
Talk to a dually licensed Criminal Tax Defense Attorney & CPA About Your Case Today
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.
The first step in defending yourself against invasive, costly, and potentially life changing IRS civil and criminal tax enforcement action is to share your story under attorney client privilege with a dedicated dually licensed Criminal Tax Defense Attorney & CPA like the ones at the Tax Law Offices of David W. Klasing. Call (800) 681-1295 or schedule online here for an initial case evaluation at a reduced rate.
See our Tax Relief and Resolution Q and A Library
See our Offer in Compromise Q and A Library
See our Liens Levys and Garnishments Q and A Library
See our Audit Representation Q and A Library
See our Criminal Tax Law Q and A Library
