Recently, the U.S. Attorney for the Eastern District of Michigan, in cooperation with the IRS, FBI, and Michigan Board of Education, announced an indictment against Albert Morrison. The indictment alleges that the former school board president committed tax evasion and failed to file federal income tax returns over multiple years.
The charges stem from Morrison’s receipt of alleged kickback benefits from a contracting business. The government claims that Morrison deliberately concealed this income from the knowledge of the IRS. However, in doing so, Morrison failed to file multiple years of federal tax returns, a major red flag for investigators.
The IRS is tracking down more leads than ever, which would affect you for even slight mistakes going back years into your return history. To build your defense0 against these invasive measures now, call the Tax Law Offices of David W. Klasing. Learn more about the services that our Dual Licensed Tax Attorneys and CPAs can provide when you call our offices at (800) 681-1295 today.
Ex-President Allegedly Failed to Report Over $500,000 in Income
On April 6, the Justice Department accounted via press release that Albert Morrison, the former President of the Madison District Public Schools Board of Education had been charged in an indictment with tax evasion and failure to file tax returns in connection with the President’s failure to report over $500,000 in income from a school district contractor.
Background
Morrison was the elected President of the Madison District Public Schools Board of Education in 2012 and served through 2018. According to allegations, the Madison Board of Education repeatedly awarded maintenance and construction projects to the same contracting company (identified in the press release as “Company A”).
According to the indictment, the owner of Company A was a long-time friend of Morrison. From 2014 to 2018, the owner wrote numerous checks from Company A’s business accounts to Morrison’s own business, Comfort Consulting.
Each check was allegedly worth just under $10,000. This is significant because federal legislation requires banks to report transactions of $10,000 or more.
Morrison allegedly would then deposit these checks into a personal bank account. Prosecutors estimate that Morrison received roughly $560,000 in check payments from Company A.
Evasion
Not only did Morrison not declare these alleged payments on any of his federal income tax returns for the years in question, but he actually did not file a federal income tax return in any of these years. Prosecutors allege that Morrison used the money gained from the payments for personal expenditures. By failing to disclose the income to the IRS, Morrison allegedly avoided payment of nearly $120,000 in income taxes.
Indictment
The announcement of Morrison’s indictment was made by Dawn N. Ison, U.S. Attorney for the Eastern District of Michigan, in partnership with Sarah Kull, Special Agent in Charge of the IRS’ Criminal Investigations Division (IRS-CI). Representatives of the FBI’s Michigan office, the state’s Department of Education, and the Office of Inspector General. Cooperative efforts by multiple state and federal agencies are becoming more commonplace in the criminal tax world.
Morrison faces four counts of federal income tax evasion and four counts of failing to file a federal tax return. Each count of tax evasion carries a maximum statutory penalty of five years in prison plus additional fines. Each count of failure to file a tax return carried an additional maximum penalty of one year in prison, plus fines. Morrison may also be ordered to pay restitution to the IRS for the tax revenue that was lost.
Missing Tax Returns is a Red Flag for the IRS
As evidenced by the press release, Morrison’s failure to file federal tax returns for the years in question was a major portion of the indictment. However, the failure to file is more than just a tax crime. It is also a warning sign to the federal government’s investigators that there may be other issues with a taxpayer’s compliance.
In the past, the IRS has not had the ability to chase down all of these red flags, meaning many who failed to file returns may have slipped through the cracks. However, under the current administration’s new funding efforts for their tax watchdog, investigative efforts have ramped up. The government’s newfound technological sophistication and manpower means an increase in both the quantity and thoroughness of audits and criminal tax investigations, which is how cases like Morrison’s come to light.
Voluntary Disclosure May Prevent Future Consequences of Noncompliance
Many who have already missed their federal income tax filing deadlines are intimidated by confronting the issues and will instead choose to do nothing. Instead of waiting for the government to discover your noncompliance, however, it may be a better strategy to get out in front of the problem and apply for a government voluntary disclosure program.
Through voluntary disclosure, taxpayers can provide amended returns and additional information that details the inconsistencies in prior filings. By taking this step first before the government has to go through the process of tracking the noncompliance down, taxpayers may qualify for a number of favorable benefits such as reduction of fines and lightened violations. Through voluntary disclosure, taxpayers may even be able to avoid criminal prosecution.
This is a delicate process, however, and will not provide the same benefits in every case. It is important to get seasoned assessment in any case from a Dual Licensed Tax Attorney and CPA to determine how engaging in voluntary disclosure could benefit you and your financial future.
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!
Concerned About Your Past Tax Filings? The Tax Law Offices of David W. Klasing Can Help
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.
You can act now to prevent invasive and costly IRS action against you for past mistakes. To learn more about the services that our Dual Licensed Tax Attorneys and CPAs offer, 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
