According to a Department of Justice press release, a former attorney from Indiana pleaded guilty to a single count of tax evasion, dating back to taxes he owed from the turn of the century. This story should be a reminder to our readers that everyone is susceptible to tax noncompliance, no matter the profession. If you have found yourself questioning whether you have fallen out of tax compliance, you should consider consulting with an experienced tax attorney.
Court documents reveal that Scott C. Cole, 54, from Brownsburg, Indiana, pleaded guilty earlier this month to tax evasion stemming from a multi-year effort to thwart attempts by the IRS to collect on tax debt from 2002. The amount that Cole owed was not in controversy, as his tax liability was litigated in both the United States Tax Court and the U.S. Court of Appeals for the Seventh Circuit. Both courts agreed that Cole owed more than $1 million in taxes resulting from a fraudulent omission of more than $1.5 million from his 2002 individual tax return.
The IRS began collection actions in 2011 and until 2017, Cole took steps to avoid the repayment of his tax debt, including opening bank accounts in the names of nominees, directing payments for tax preparation and legal services to such nominee companies, and paying personal expenses directly from bank accounts owned by nominees. Finally, Cole used cash extensively in an attempt to disguise his income from the IRS, a tactic commonly used by those who are attempting to avoid IRS and state tax collection efforts. In sum, the IRS has only been able to collect $3,000 toward his total tax bill.
Cole is expected to be sentenced in late summer and will face several years in a federal prison. Additionally, the sentencing judge will likely order a term of supervised release that will commence upon Cole’s release from federal custody. Lastly, Cole will likely be ordered to pay restitution to the IRS in the amount of his remaining tax debt, plus interest.
Tax noncompliance is not a situation that only affects one segment of the taxpayer population. It is easy to find yourself late on filing returns, or in a position where payment of the taxes that you owe is difficult or even not feasible. When you find yourself in a situation where you feel backed into a corner and are unsure how to proceed, contacting an experienced IRS tax attorney is oftentimes the best action to take.
A tax defense attorney can help you understand your options and the best route to take to avoid going down a path that could lead to a criminal tax prosecution. The defendant in the story detailed above owed a substantial amount of tax for only one year, but the failure to address the issue escalated the situation into a full-blown federal prosecution. Taxpayers facing a decision about how to handle a large tax bill need to understand that they have options. Along with the assistance of a seasoned tax lawyer, the IRS will oftentimes agree on payment options that will not require you to come up with the entire amount of taxes due right away. A tax defense attorney can help ensure that you are set up for tax compliance success.
The tax and accounting professionals at the Tax Law Offices of David W. Klasing have extensive experience representing taxpayers from all walks of life dealing with various different tax situations. Whether you are a professional, such as an attorney, accountant, or a doctor, or simply have found yourself the target of an IRS or state tax audit, our team of zealous advocates is standing by to help assist in the development of a sound legal and tax strategy aimed at a successful resolution of your tax predicament. Do not let the IRS or state taxing authority keep you up at night. Contact the Tax Law Offices of David W. Kasing today for a reduced-rate consultation.
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