According to a Department of Justice press release, Craig P. Orrock, a former IRS attorney, was recently convicted of tax evasion and obstructing the internal revenue laws by a federal jury. The charges developed as a result of the efforts of the IRS Criminal Investigations group, as well as investigators from the Department of Justice and illustrate that taxing authorities and other law enforcement agencies will go after anyone, including their own, in the prosecution of tax crimes.
According to documents and other evidence presented at trial, starting in the early 1990s, Orrock evaded the payment of his federal income taxes and obstructed IRS efforts to collect the taxes that he owed. Although Orrock filed correct federal individual income tax returns for the years 1993 through 2015, he failed to pay the income taxes that he himself reported as due.
In an attempt to prevent the IRS from collecting the reported income taxes Orrock used nominee entities, bank accounts and trusts to hide his income and assets from the IRS. Additionally, Orrock attempted to evade the assessment of a large part of the income tax he owed for 2007 by hiding from the IRS the true ownership of a stake in real estate interest he held and the gain associated with disposing of such property.
Government prosecutors, along with the IRS, estimated that between 1993 and 2015, Orrock evaded the payment of over $500,000 in federal income taxes.
Sentencing is scheduled for late summer and could result in Orrock spending over a decade in a federal prison. Orrock faces up to five years on each of the first two tax evasion counts and up to three years in prison on the third obstructing count. Additionally, Orrock will likely be sentenced to serve a period of supervised release once he is physically released from prison.
It is critical for taxpayers to understand that just because you file your tax return does not mean that you are shielded from tax evasion charges. If you fail to pay your taxes without having an established agreement with the IRS, your actions could constitute tax evasion. Further, if you take affirmative steps to frustrate the efforts of IRS collection agents through lying or other forms of deceit, you could be found guilty of obstruction and evasion of payment, as Mr. Orrock was in this case.
The best course of action for someone who has been accused of tax wrongdoing is contacting an experienced tax defense attorney as soon as possible. Even more, a seasoned tax attorney who also holds CPA licensure brings to the table a diverse skillset that can be used to assist any type of taxpayer. In addition to the technical knowhow that you would expect from licensed CPA, a tax lawyer offers a vast breadth of legal knowledge and training that can be put to use to ensure that your rights are protected.
The tax and accounting professionals at the Tax Law Offices of David W. Klasing have extensive experience in representing taxpayers from all walks of life. From business owners facing payroll or sales tax issues to wage earners that have been targeted for an IRS or state tax examination, our team of zealous advocates are standing by to assist in the development of an effective strategy that keeps your interests top-of-mind. Do not let the threat of an IRS or state tax authority examination keep you from enjoying great moments. Contact the Tax Law Offices of David W. Klasing today for a reduced-rate consultation.
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