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Gladwyne Pennsylvania Businessman Sentenced to Six Years in Prison on Tax Evasion and Fraud Charges

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Gladwyne Pennsylvania Businessman Sentenced to Six Years in Prison on Tax Evasion and Fraud Charges

 

The government’s tax crime prosecution activity increases every day. Most recently, their efforts resulted in the sentencing of a Pennsylvania man to six years in jail and $18 million in monetary penalties.

The defendant, Christopher Hogg, pled guilty to allegations of tax evasion, bank fraud, and filing false tax returns in September of last year. Hogg was engaged in a $21 million insurance scheme, but what tipped the government off to his activities was his failure to include $750,000 of income on a tax return.

The IRS is more vigilant and aggressive than ever before regarding unreported income. To make sure that you don’t find yourself in a sticky situation with the federal government, contact the dual-licensed Tax Lawyers and CPAs at the Tax Law Offices of David W. Klasing by calling (800) 681-1295.

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.

Businessman Sentenced to Six Years in Prison on Tax Evasion and Fraud Charges

On February 8, 2022, the IRS announced that Christopher Hogg of Gladwyne, PA had been sentenced to six years and three months in prison, with two subsequent years of supervised release. Additionally, United States District Court Judge Nitza Quinones Alejandro ordered Hogg to hand over more than $18 million in penalties and restitution to the federal government. The sentence comes after Hogg pled guilty last September to charges including bank fraud and conspiracy to commit bank fraud, filing a false tax return, and tax evasion.

The initial indictment alleged that between November of 2016 and January of 2018, the defendant participated in an insurance premium financing scheme. Together with other co-conspirators, the defendant submitted more than 30 applications to a financing company for loans that they purported were meant to be used for purchasing insurance.

Instead of purchasing that insurance, the defendant used the money to finance his business and his personal wealth. Hogg purchased several personal luxuries with the fraudulent funds, including a Mercedes Benz S-Class, a house on the Main Line, vacations, and membership at a country club.

How Did the Government Discover the Scheme?

The IRS was alerted to Hogg’s affairs when he failed to report income on consecutive tax returns. Hogg failed to include more than $370,000 on his Form 1040 in 2016 and failed to file a tax return in 2017 when he earned roughly $1.7 million in taxable income. The resulting loss of tax revenue for the government from these two years was around $750,000, to which the IRS did not take kindly.

This story represents a gross violation of tax law that was almost sure to be discovered. However, though many tax errors are not this egregious, the government announced Hogg’s sentencing with a clear message in mind – if you don’t report income, the government will find out, and they won’t be kind when they do.

Special Agent in Charge Jacqueline Maguire made this clear in her statement in the IRS’ press release announcing the sentencing: “Today’s sentence is significant enough that it should serve as a warning to other criminals: give careful thought to whether the ill-gotten gains you are receiving are worth going to prison; because that’s exactly where you’re going.”

The IRS Is Planning to Conduct More Audits and Criminal Tax Investigations

The Hogg case is just the start. The IRS has received considerably more funding from the current administration than in years past. The money is being used to bolster the IRS’s Criminal Investigations Department (IRS-CI). The IRS-CI is adding staff, upgrading their technology, and upping their litigation budget.

Practically, what this means is that the IRS is planning more audits. When the audits happen, they will take longer, and the government will investigate more thoroughly. And if the audit results in any suspicions of criminal tax violations, the IRS will have the resources to take the target to court and criminally prosecute.

This doesn’t just apply to future filings. You should expect the federal government’s tax watchdog to go back into past filings to investigate offenses where the statute of limitations has not expired. The range on a typical tax audit could run as long as six years in the past, meaning that issues that you thought had already been resolved might come back to haunt you.

The IRS got funds added to their war chest on the premise that they would close the tax gap, which is estimated to be over $1 trillion annually. Essentially, through tax prosecutions and convictions of previously undetected tax evaders, the federal government will recoup their investment in the IRS, and then some.

How Can You Prevent Tax Audits or Criminal Tax Allegations?

No one wants to find themselves staring down the barrel of an exhausting and invasive government tax audit or, worse yet, a criminal tax indictment. The best way to prevent yourself from falling into this situation is to make sure that you remain in compliance with the complex federal tax regulations.

Even if you have criminal tax exposure emanating from returns filed in years past, you still may have the opportunity to correct them. The federal government offers a voluntary disclosure program to taxpayers wishing to come clean about previous potentially criminal tax issues and avoid eggshell / reverse shell audits, criminal investigations and criminal tax indictments followed by prosecution. You can even secure predictable program based civil penalties by voluntarily disclosing your past noncompliance and simultaneously avoid criminal tax prosecution altogether.

However, you should not attempt to voluntarily disclose without the help of a seasoned dual licensed Tax Attorney & CPA. Depending on the circumstances, providing the government with information may not aid your case. If done incorrectly or at the wrong time, you could even exacerbate your existing criminal tax exposure. The dual-licensed Tax Attorneys and CPAs at the Law Offices of David W. Klasing have decades of experience with the voluntary disclosure process and can advise you if the program is appropriate to get you back into tax compliance without facing criminal tax 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!

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Get Tax Law Help by Calling the Tax Law Offices of David W. Klasing Today

Get the Tax Law expertise that you need to avoid government audits and criminal tax charges by calling our dual-licensed Tax Attorneys and CPAs at (800) 681-1295.

Regardless of your business or estate needs, the professionals at the Tax Law Offices of David W. Klasing are here for you. We are open for business and our team will help ensure that your business is too. Contact the Law Offices of David W. Klasing today to discuss your business with one of our professionals.

In addition to our main office in Irvine, the Tax Law Offices of David W. Klasing has unstaffed (conference room only) satellite offices in Los Angeles, San Bernardino, Santa Barbara, Panorama City, Oxnard, San Diego, Bakersfield, San Jose, San Francisco, Oakland, Carlsbad and Sacramento.

Our office technology allows clients to meet virtually via GoToMeeting. With end-to-end encryption, strong passwords, and top-rated reliability, no one is messing with your meeting. To schedule a reduced rate initial consultation via GoToMeeting follow this link. Call our office and request a GoToMeeting if you are an existing client. 

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