Former Kansas Race Driver Sentenced to Three Years in Prison for Tax Evasion

Earlier this month, convicted tax evader and racketeer Scott Tucker received additional sentencing after pleading guilty to one count of filing a false tax return. Tucker, the subject of an episode of Netflix’s popular “Dirty Money” series, was already serving time for conducting an illicit payday loan scheme, concealing income from the IRS, and using tribal law to violate state lending laws

After pleading guilty as part of a plea agreement in November, Tucker still received 36 months of prison time and was ordered to pay the IRS roughly $40 million. This additional action just goes to show that the IRS has the capability and motivation to pursue every dime that they believe they are owed. The implications of this extend to every taxpayer with past noncompliance and are not limited to just the most egregious tax cheats like Tucker.

If you believe that past mistakes in your personal or small business tax filings may come back to haunt you, the time is now to act. At the Tax Law Offices of David W. Klasing, we urge you to get immediate assistance from our Dual Licensed Tax Attorney CPAs by calling our offices at (800) 681-1295 today.

Former Racing Star, Subject of “Dirty Money” Netflix Series, Receives Prison Time and $40 Million in Penalties After Pleading Guilty to Tax Evasion

On March 2, the U.S. District Attorney’s Office for the State of Kansas announced that Scott Tucker of Leawood had been sentenced to 36 months in prison and ordered to pay additional restitution and penalties to the IRS estimated to be worth roughly $40 million in total. In November of last year, Tucker, 59, pled guilty to one count of filing a false tax return. Other charges that Tucker faced were dropped as part of a plea agreement.

Prior Career and Criminal History

Tucker’s name rose to prominence due to his racing career. Tucker was a professional driver who competed in multiple racing series under the banner of his own racing company, Level 5 Motorsports.

But Tucker is likely more well known for being featured in an episode of Netflix’s documentary series “Dirty Money,” which documented several notable financial misconduct cases. Tucker’s episode covered the charges leveled against Tucker starting in 2012.

Tucker was the CEO of AMG Services, a company that primarily operated in the payday loan business. It was determined that AMG Services, at the direction of Tucker, charged customers inflated fees based on predatory and incomplete contracts. The court also determined that AMG Services improperly utilized the sovereign immunity laws only available to tribal entities in order to escape state lending regulations.

Tucker was ultimately arrested and convicted of 14 counts of various financial crimes, including racketeering, filing a false tax return, wire fraud, and making illegal payday loans. Tucker himself allegedly failed to report more than $117 million in income across the taxable years of 2009 and 2010. For his part, Tucker received 16 and a half years in prison time at Leavenworth Federal Penitentiary in his 2017 sentence.

However, perhaps the most notable of the sentences came from Tucker’s violation of Section 5 of the Federal Trade Commission Act. The U.S. District Court for the District of Nevada ordered Tucker and his co-conspirators to pay $1.3 billion in penalties for “deceiving consumers across the country and illegally charging them undisclosed and inflated fees.” The $1.3 billion court order represents the largest judgment that the FTC has ever won in court.

New Charges from Racing Business

Tucker’s prior litigation history all had to do with his association with AMG Services. However, the most recent allegations concern Tucker’s concealed income derived from his racing company, Level 5 Motorsports. As part of Tucker’s plea agreement, he admitted that Level 5 did not function as a for-profit business and instead acted as a shield to his tax liability.This resulted in Tucker’s submission of false information on his 2010 filing of his Form 1040 tax return.

Tucker is still serving his sentence from his prior convictions associated with the payday loan scheme. The court has allowed Tucker to serve the two sentences concurrently. Tucker was also ordered to pay $40 million in restitution and penalties for the unpaid tax debt.

What Can We Take Away from the Scott Tucker Case?

Though Tucker’s situation is an extreme and egregious example, it is an example, nonetheless. Even though Tucker was already in federal prison and had received the largest payment order for FTC violations to date, the IRS was not finished.

The federal government’s tax watchdog is keen on discovering the extent of impropriety in tax disclosure and payment, whether it be willful or not. Therefore, minor discrepancies or simple mistakes will often result in additional scrutiny, which could come in the form of an audit or even a criminal tax investigation.

These invasive and serious government actions can be harmful even if you have nothing to hide. The mere existence of a government inquiry can impact your time and resources, personal and professional reputation, and your ability to secure credit. Therefore, if you are facing a government audit or have reason to suspect that you may face one in the future, you must prepare your defenses so that the process resolves as quickly and painlessly as possible.

The best way to do this is to contact a qualified Dual Licensed Tax Attorney CPAs as soon as possible. Government audits use intimidation and invasiveness as tools, but you can prevent those targeted forces from affecting you when you have effective representation.

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.

Note: 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 disclosurebefore 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, KovelCPAs 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!

The Tax Law Offices of David W. Klasing Can Help You Avoid Harsh IRS Penalties

To benefit from the many years of experience our Dual Licensed Tax Attorney CPAs have battling the IRS, call the Tax Law Offices of David W. Klasing today at (800) 681-1295 or schedule online today.

How Can a Dual-Licensed Tax Attorney and CPA Help You with Tax Fraud Charges?

The best way to defeat IRS criminal charges is to avoid them in the first place. At the Tax Law Offices of David W. Klasing, our dual-licensed Tax Attorneys and CPAs take a circumspect approach to representing our clients, including assessing their tax filing histories for potential issues and rectifying them before they actualize.

If you find yourself facing criminal charges or the subject of an invasive IRS audit, it is not too late to benefit from the assistance we can provide. Our dual-licensed Tax Attorneys and CPAs have plenty of experience dealing with criminal defense and can be by your side throughout your advocacy.

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.

Contact the Tax Law Offices of David W. Klasing Today for Your Tax Law Concerns

To benefit from the experience and resources of our team of dual-licensed Tax Attorneys and CPAs, call the Tax Law Offices of David W. Klasing today at (800) 681-1295.

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