As our regular readers already know, the IRS is prepared to go after any taxpayer for suspected tax crimes, including its own employees. The same is true for the U.S. Department of Justice (DOJ), whose Tax Division works with the IRS Criminal Investigation Division (IRS-CI) to investigate and prosecute federal tax offenders. For a recent example, look to the case of James F. Miller, a former Tax Division employee and tax policy lobbyist. According to a press release issued, appropriately enough, by the DOJ, Miller “was sentenced in December to one year in prison… for willfully filing a false tax return,” concealing millions of dollars from the IRS in the process.
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The Department of Justice frequently issues press releases on tax-related indictments, guilty pleas, and convictions. However, seldom are the defendants featured former DOJ employees.
James F. Miller, 67, described in a previous DOJ press release as a “former employee of the Justice Department’s Tax Division,” was sentenced in December for filing a false return after pleading guilty in June. In court, Miller admitted to concealing more than $2.2 million from the IRS by willfully excluding from his tax returns “substantial portions of the partnership income he received from two law firms he worked at and the gross receipts of his own lobbying firm.” In so doing, Miller intentionally evaded his tax liability, causing a tax loss greater than $735,000.
Appearing in December before U.S. District Judge Leonie M. Brinkema, Miller was sentenced to one year in prison, to be followed by a year of supervised release. Additionally, Miller was ordered by the court “to pay restitution to the United States in the amount of $735,933” – equal to the tax loss caused by his crime.
Willfully filing a false tax return is a felony violation of the Internal Revenue Code and may be prosecuted under 26 U.S. Code § 7206(1) (IRC § 7206(1)), which prohibits the willful, or intentional, filing of any tax return containing false information. For a comprehensive discussion of willfulness, refer to our discussion of the willfulness requirement for tax evasion, learn how the IRS determines whether conduct was willful, or explore the defense tactics that make it difficult for the government to prove willfulness.
Miller’s case should be a lesson to taxpayers that the government is willing to prosecute anyone for tax crimes, regardless of factors like prestige or political influence. (For more proof, simply read about these celebrities who were prosecuted for tax crimes, the former Chicago political leader charged with tax evasion, or the more recent case of lobbyist and political consultant Paul Manafort.) If you willfully fail to report income, fail to file income tax returns, falsify information on your tax returns, fail to report foreign bank accounts or investments, or even fail to report Bitcoin transactions to the IRS, you may land in the government’s crosshairs – a situation made even more alarming by IRS-CI’s conviction rate, which was recently revealed to exceed 91%. If you have been chosen for a high risk tax audit, are concerned about the possibility of a criminal tax investigation, have been contacted by the IRS regarding another individual’s case, or simply have questions about a tax preparation issue as April approaches, the wisest course of action is to consult with a trusted tax lawyer immediately.
If you need help with a tax compliance issue, including a civil IRS audit, criminal audit, or tax fraud investigation, look to the award-winning IRS attorneys at the Tax Law Office of David W. Klasing for representation founded on more than 20 years of experience. Contact us online right away to arrange a reduced rate consultation or call the Tax Law Office of David W. Klasing 24 hours a day, seven days a week, at (800) 681-1295 for assistance.
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