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.
Defendant Claimed Fraudulent Deductions on Income Tax Returns, Submitted Fabricated Documents to IRS
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.
False Tax Returns
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.
Obstruction of IRS Audit
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).
Indictment and Plea
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.
Sentencing
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.
What Should You Do if You Are Facing a Government Audit?
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.
Our Criminal Tax Defense Attorneys Are Here to Help You Today
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.
Concerned About Criminal Tax Charges? Call the Tax Law Offices of David W. Klasing
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!
More Commonly Asked Tax Audit Questions
- How should Tax Audits be Handled by Criminal Tax Counsel?
- How to survive audit when I cheated on return being audited
- What is an eggshell audit?
- What is a reverse egg shell audit?
- Why is a reverse egg shell audit dangerous for a taxpayer?
- Warning signs of a criminal referral from an IRS audit
- Effective tax defense counsels goals in an egg shell audit?
- How are the 4 goals and outcomes 1 and 2 best obtained?
- What are the possible outcomes of an egg shell audit?
- Is it my right to know why I was selected for examination?
- What can I do to prepare for an audit?
- What is an IRS civil examination?
- How IRS decides which tax returns are audited
- What are my appeal options if I disagree with IRS?
- What are my basic taxpayer rights if the IRS audits me?
- Options if I am unable to pay at the conclusion of audit
- What a 30 or 90-Day Letter from the IRS means
- What is involved with appealing disagreements?
- Rights to disagree with IRS tax auditor’s findings
- Can I stop the IRS from repeatedly auditing me?
- Can I have the examination transferred to another area?
- Can I record my IRS interview and is it a good idea?
- How many years of returns are at risk during an audit?
- Common reasons for the IRS to conduct a tax audit
- How to avoid negative consequences from an IRS interview
- Have to agree to interview by taxing authority directly?
- Are all audits the same?
- What should I do if the IRS is investigating me?
- What if I don’t respond to a taxing authority audit notice
- Your rights during an IRS tax audit
- Risks of attending an IRS audit without a tax lawyer
- Most common audit technique used by taxing authorities
- Don’t go into an IRS audit without representation
- Why hire an attorney to represent me in an audit?
- Why hire David W. Klasing to represent me in an audit
Questions and Answers for Criminal Tax Representation
- When tax defense counsel parallels tax crime investigation
- Guilty of tax obstruction by backdating documents?
- To be found guilty of tax obstruction must a person actually be successful in impeding the IRS’s functions?
- Help! The Document I Gave the IRS Had False Information
- Tax crime aiding or assisting false return IRC §7206(2)
- What is the crime known as tax obstruction § 7212?
- What is the difference between tax perjury and tax evasion?
- What is the tax crime commonly known as tax perjury?
- What is a Klein Conspiracy?
- Increased possibility of civil action in IRS investigation
- Am I Guilty of Tax Evasion if the Law is Vague?
- What happens if the IRS thinks I committed tax crimes?
- What are ways to defend against a tax evasion charge?
- Difference between criminal tax evasion and civil tax fraud
- What accounting method does the IRS use for tax fraud
- Can I Change Accounting Method to the Accrual Method
- What is the willfulness requirement for tax evasion?
- I didn’t know I committed tax fraud. Can I get off?
- Concealed assets from IRS. Can I avoid tax evasion charges
- How government proves I willfully engaged in tax evasion
- What is the venue or court where a tax crime case is heard?
- Must the IRS prove tax crimes beyond a reasonable doubt?
- Is it a crime to make false statements to the IRS?
- Will the IRS overlook my tax evasion if it’s minor?
- Failed to tell IRS about my nominee account
- Audit risk with cash based business transactions
- How to defend a client charged with tax evasion
- Is it tax evasion if I didn’t file income tax return?
- Government says I attempted to evade my taxes. Now what?
- I forgot to pay my taxes or estimated tax. Is this a crime?
- Government proof I “willfully” failed to pay taxes
- 5 Ways to Respond to Tax Evasion Charges
- Being audited after using a tax professional
- Rules for what an IRS agent can do while investigating me
- How tax preparers, attorneys and accountants are punished
- How the IRS selects tax crime lead for investigation
- How does the IRS prosecute suspected tax crimes?
- Does IRS reward informant leads for suspected tax crimes?
- How the government proves deficiency in a tax evasion case
- Do prior tax crimes factor into new IRS tax convictions?
- Requesting conference before investigative report is done
- Requesting conference after IRS Special Agent Report
- What are my rights during an IRS criminal investigation?
- Avoid prosecution for tax crime with voluntary disclosure?
- Defense tactics that make it hard for to prove willfulness
- How a tax attorney can stop your criminal tax case?
- What can you generally tell me about tax crimes?
- Continuing filing requirement with investigation pending
- Federal criminal code crimes that apply to tax issues
- Penalty for making, subscribing, and filing a false return
- CID special agent’s report for criminal prosecution
- What is the discovery process in a criminal tax case?
- What the IRS includes in indictment for tax case
- What is the hardest element of a tax crime to prove?
- IRS methods of gathering evidence to prove tax crime
- What does a grand jury do in IRS tax crime prosecution?
- Failure to keep records or supply information
- Failure to make a return, supply information, or pay tax
- What is attempting to evade payment of taxes?
- What is income tax evasion and how is it punished?
- What is attempted income tax evasion?
- What is the crime of failure to pay tax? What is punishment
- Crime of making or subscribing false return or document
- Criminal Investigation Division investigation tactics
- Tax crimes related to employment tax forms and trust funds
- Tactics to defend or mitigate IRS criminal tax charges
- How the IRS generates leads about suspected tax crimes
- What is the crime ”evasion of assessment” of tax?
- Specific examples of “attempting” to evade tax assessment
- What is the so-called Spies evasion doctrine?
- Does overstating deductions constitute tax evasion?
- Is it tax evasion if my W-4 contains false statements?
- IRC §7201 attempt to evade vs. common-law crime of attempt
- What are the penalties for Spies tax evasion?
- How government proves a taxpayer attempted tax fraud
- What is a tax that was “due and owing.”
- What is evasion of assessment for tax liability?
- Is evasion of assessment different from evasion of payment
- Does the IRS have a dollar threshold for tax fraud?
- What is the IRS burden of proof for tax fraud convictions?
- Are Tax Laws Constitutional?
- What is the source of law that defines tax evasion?
- Does section 7201 create two distinct criminal offenses?
- Does tax evasion definition include partnership LLC
- What if I helped someone else evade taxes?
- Is it illegal to overstate deductions on my tax return?
- Is it illegal to conceal bank accounts from the IRS?
- Do later losses justify prior deductions?
- Common reasons the IRS and DOJ start investigations
- What is the Mens Rea component of tax crimes?
- What is a proffer agreement and what are the risks?
- Why to have an attorney to review a proffer agreement
- Why enter into a proffer agreement?
- Limited use immunity from proffer agreements
- Difference between civil and criminal fraud allegations
Questions and Answers on Unfiled Back Taxes
- What are the common issues that non-filers face?
- Risk of audit after filing delinquent prior year returns
- Can substitute return deficiency be discharge in bankruptcy
- Substitute return modified by subsequent delinquent return?
- Do I file every delinquent return for each missing year?
- How does the IRS identify non-filers?
- How important is it to the government that I didn’t file?
- Delinquent tax return criminal prosecution likelihood
- Will I get a refund on a delinquent tax year?
- What happens after enforcement action has begun?
- Should I use an attorney, EA or a CPA to represent me when I re-enter the tax system?
- Why do people drop out of the tax system?
- What happens after the IRS identifies me as a non-filer?
- IRS has not previously filed substitute returns
- Tax attorney representation when re-entering tax system
- How will the government force me to file returns?
- What penalties can IRS impose on delinquent tax filings?
- What should I do to re-enter the tax system?
- Can Law Office of David W. Klasing help me re-enter system?
- Will tax collection taken by authorities affect my credit
- I concealed bank accounts from the government
- Forgetting or failing to file tax return
