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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.
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.
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.
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.
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.
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.
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!
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.