Following a guilty plea agreement, a South Carolina federal court recently sentenced a defendant to over a year in prison plus restitution payments for filing false returns and submitting fraudulent documents to the IRS. Most interestingly, the defendant in question actually used to work for the IRS.
This case tells a story of how one or two mistakes can turn into a criminal tax violation nightmare where the wrong steps are taken. It is incredibly important to seek out competent legal representation if you find yourself facing an eggshell, reverse eggshell or criminal tax investigation or have reason to believe that you may have fallen out of tax compliance.
To get the help that your case needs today, call (800) 681-1295 or schedule online here to schedule your reduced-rate initial case evaluation with the Tax Law Offices of David W. Klasing as soon as possible.
In a July press release, the Department of Justice announced that a federal court had sentenced a former employee of the federal tax agency on charges of obstruction and filing false tax returns.
Wayne M. Garvin, who most recently resided in Columbia, South Carolina, spent over two and a half decades in various roles with the IRS. His most recent role was as a Supervisory Associate Advocate with the IRS’ Taxpayer Advocate Service in Philadelphia. The Taxpayer Advocate Service is a public resource dedicated to helping ordinary taxpayers navigate complex tax issues. Garvin, 57, is also a former member of the U.S. Army Reserves.
Garvin attracted the scrutiny of his former employer for his tax return filings from 2012 to 2016. According to court documents, the IRS alleged that Garvin filed his federal returns with a number of inconsistencies and factual errors. Garvin allegedly claimed false deductions based on expenses from rental properties, nonexistent real estate taxes on his personal home, and fraudulent charitable contributions.
Additionally, Garvin included a $16,000 deduction on his 2013 federal tax return based on what the government claimed were false expenses stemming from his involvement in the U.S. Army Reserves, despite Garvin not having performed any reservist duties during that taxable year.
Once the IRS became suspicious of Garvin’s returns, they instituted a formal audit of Garvin’s returns for the taxable years of 2013 and 2014. Instead of cooperating with the audit, however, Garvin allegedly dug himself even deeper by creating and submitting falsified documentation to substantiate his filings. These falsified documents included receipts for charitable donations to a church, invoices from a contractor, and a letter from the Army about his reservist obligations.
Even after the government shifted their efforts from an audit to a formal criminal tax investigation, Garvin allegedly continued the ruse, including submitting these same manufactured documents to the IRS’ Criminal Investigations Division (IRS-CI).
Garvin was initially charged with three counts of federal tax evasion and two counts of corruptly endeavoring to impair and impede the due administration of the Internal Revenue Code (IRC).
In front of Judge John Milton Younge of the U.S. District Court for the Eastern District of Pennsylvania, Garvin entered a guilty plea, admitting to underreporting his income by more than $74,000 over the course of the years in question.
Garvin entered a plea of guilty as part of a prearranged agreement, in which he also agreed to pay back the tax debt that he owed the government.
Prior to entering into his plea agreement, Garvin faced up to five years in prison, combined with supervised release, restitution, and additional fines. Ultimately, Garvin was sentenced to 13 months in prison with an additional three years of supervised release.
Garvin was also ordered to pay restitution in the amount of $74,662, which reflects the amount that the IRS lost as a result of Garvin’s noncompliance. This part of the sentence was agreed upon between Garvin and prosecutors as part of the plea agreement.
If we can take one critical lesson away from this case, it is that Garvin made his situation substantially worse by creating and submitting false records and documentation to the government. When the government has enough curiosity to initiate a formal investigation like an audit, they will likely want to confirm the veracity of whatever you provide to them.
If the government determines that you submitted false or manipulated documents in the course of an audit, that is enough to signal that you were willful in avoiding taxes in the first place. The difference between willful and non-willful tax violations is enormous. Look no further than Garvin’s situation, where the government transitioned their investigation from a civil audit to a criminal tax investigation upon receiving the falsified documents.
One area where honest taxpayers frequently get caught up in this issue is where they honestly claimed deductions that they believed were valid but did not have the documentation to back it up. Faced with an IRS audit, a panicked taxpayer, especially where they do not have legal representation, may decide to create this documentation. Whether your original tax return filings were valid or not, fabricating evidence and using it in and audit is a crime in and of itself.
If you don’t know how to deal with the questions being asked in an IRS audit on you or your small business, do not try to fix the situation yourself. Reach out to one of the seasoned Dual Licensed Tax Lawyers and CPAs at the Tax Law Offices of David W. Klasing. Together, we can help you come up with creative and valid strategies for explaining your tax filings without adding further issues to your already troublesome situation.
To schedule your first-time case assessment for a reduced rate with an experienced criminal tax defense lawyer, contact the Tax Law Offices of David W. Klasing at (800) 681-1295 or schedule online here today.
If you are dealing with serious tax matters, you deserve tax assistance that you can rely on. Schedule your first reduced-rate case evaluation with our Criminal Tax Defense Lawyers by calling (800) 681-1295 today or schedule online here.
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.
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!