We are often surprised to learn that a person of authority has committed a wrongful act. For instance, a police officer that robs a bank evokes feelings of disappointment and even irony. Although the type of situation described above is rare, it can happen in any line of work. Last week, a former United States Tax Court judge learned this lesson the hard way when she pled guilty to federal tax crimes.
Diane Kroupa, 61, found herself in a Minnesota courtroom last week, a setting that she was likely very accustomed to. But instead of keeping a watchful eye over the proceedings of a Tax Court case from the bench, she was seated at the defendant’s table in a U.S. District Court, answering to charges of conspiring to defraud the United States.
According to a Department of Justice press release, from 2004 through 2012, prosecutors allege that Kroupa and her husband, Robert E. Fackler, 62, took various steps to hide income and attempted to illegally lower their income tax liability. The indictment alleged that Kroupa failed to report income resulting from the sale of real estate in South Dakota. Further, prosecutors believe that Kroupa and Fackler, a lobbyist, characterized several personal expenses as business expenses of Grassroots Consulting, Fackler’s lobbying firm. Expenses ranged from lavish trips around the world, to wine club memberships, to foreign language lessons and beyond. Finally, Kroupa is accused of hiding financial information from both her tax preparer and a revenue agent from the IRS during an audit.
Kroupa’s guilty plea came after a federal grand jury indicted the couple in April. Shortly after the indictment, Kroupa and Fackler began divorce proceedings. Fackler pleaded guilty earlier this year on the same charge. The couple was likely attempting to mitigate their punishment. They each face a statutory maximum of five years in a prison on the conspiracy count.
Kroupa was appointed to serve as a U.S. Tax Court judge in 2003. Her appointment was for a 15-year term, but she retired in 2014. “Tax laws of this country apply to everyone, and those of us appointed to federal positions must hold ourselves to an even higher standard” said U.S. Attorney Andrew Luger. This case garnered a decent amount of attention among government and tax officials because of Kroupa’s position as a Tax Court judge during the alleged illegal activity.
Kroupa’s indictment and guilty plea provides evidence that the IRS and Department of Justice will go after absolutely anyone for violating tax laws. Whether you are a public official or a hard-working American just trying to get by, special care should be taken when dealing with tax audits, tax investigations, and litigation. If you have been singled out by the IRS for an examination or if you already have an investigation pending against you, it is in your best interest to contact an experienced tax attorney as soon as possible.
The benefits of consulting with a CPA who is also a tax attorney are plentiful. A tax attorney can develop a strategy to put you and your family in the best position to walk away from a potentially negative tax situation with minimal damage, if any. A seasoned tax lawyer will ensure that you answer only the questions that need to be answered and make sure that you do not provide any documentation that is not legally required.
The tax and accounting professionals at the Tax Law Offices of David W. Klasing have extensive experience in representing taxpayers from all walks of life with a myriad of different tax issues. From eggshell audits to full-blown litigation, our team is ready to zealously advocate on your behalf. Don’t let tax trouble keep you up at night and don’t go up against the IRS alone. Contact the Tax Law Offices of David W. Klasing today for a reduced-rate consultation.
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