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Former Michigan Business Owner Pleads Guilty to Tax Crimes, Faces Federal Prison Sentence

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Former Michigan Business Owner Pleads Guilty to Tax Crimes, Faces Federal Prison Sentence


A recent Department of Justice press release revealed that a former home healthcare business owner from Michigan recently pleaded guilty to tax fraud after claiming false business expenses. This story should serve as a reminder to taxpayers who frequently deduct purported business-related expenses on an annual tax return that the IRS does indeed scrutinize such deductions and will investigate and prosecute those taxpayers who fraudulently claim fake / unsubstantiated business deductions. If you have filed a tax return containing information that is known to be false or if you have failed to file a tax return altogether, it is in your best interest to contact an experienced tax defense attorney to discuss the best strategy to get right with the government.

Defendant Inflated Business-Related Deductions

According to court documents, Robert Nakfoor, of Lansing, Michigan, pleaded guilty to filing a false individual tax return after he claimed multiple deductions for expenses that he did not incur. The deductions appeared on his 2011 through 2015 individual income tax returns. The deductions related to insurance, legal, and professional services, as well as wages and contracted labor that Nakfoor’s company did not actually incur. Nakfoor admitted that at the time of preparing his tax returns, he knew that the company did not incur such expenses. Prosecutors and the IRS estimated that Nakfoor’s fraudulent tax activity resulted in the underpayment of $481,465 of tax.

The defendant’s sentencing has not yet been scheduled, but he faces up to three years in federal prison for the single count of filing a false tax return. Additionally, Nakfoor will likely be sentenced to serve a period of supervised release upon the completion of his physical incarceration. Lastly, Nakfoor will likely be ordered to pay restitution to the IRS, representing the tax loss that he caused.

Bringing Your Business and Individual Tax Filings Back into Tax Compliance

The facts at play in the story above likely ring true to a plethora of business owners. Among some taxpayers, there is an itch to over-embellish / overstate deductible expenses to lower their overall tax liability. But as the defendant in today’s story is discovering, the upside of falsifying deductions on a tax return are substantially outweighed by the potential for being criminally investigated, convicted, and sent to federal prison. Nonetheless, the temptation often dominates, and business owners create unnecessary risk of criminal prosecution or other life changing civil liabilities.

If you have inflated your deductions or credits, underreported income, or have failed to file tax returns altogether, it is in your best interest to consult with an experienced tax defense attorney. Together, you will work to identify your key items of exposure and develop a plan to come into compliance. While you are being represented by a seasoned tax lawyer, you will not have to communicate or go up against the IRS alone. Do not continue to lose sleep over unpaid taxes or a looming tax audit.

Note: As long as a taxpayer that has willfully committed tax crimes (potentially including understated income, overstated deductions and credits along with affirmative evasion of U.S. income tax ) 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 find yourself under audit and have filed a fraudulent return you are facing and eggshell or reverse eggshell audit and whether you realize it or not need criminal tax defense representation in your audit. We have extensive experience and so far, a 100% success rate to date at resolving these types of audits as standard civil audits.

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