Houston Attorney Indicted on Tax Evasion and Conspiracy Charges

According to a Department of Justice press release, an indictment was returned against Steve Pursley, a Houston-area attorney, on charges of conspiring to defraud the United States and tax evasion. Prosecutors allege that Pursley and his co-conspirator client executed a plan to move untaxed earnings in the amount of $18 million from the Isle of Man back to the United States in a manner that avoided U.S. taxation.

Court documents allege that Pursley moved his client/co-conspirator’s millions from the Isle of Man to the United States through a purported purchase of equity in a U.S. entity owned by the co-conspirator and Pursley. This plan would have allowed the tax-free investment of funds into the United States. Prosecutors say that the pair then accessed the funds through transactions classified as interest-free loans and returns of capital. The IRS and Department of Justice have taken the position that their series of transactions was an illegal scheme structured in the manner that it was for the sole purpose of avoiding U.S. taxation.

Pursley personally gained from the transactions that he helped set up. Prosecutors allege that he received over $4.8 million in exchange for his services. Court documents reveal that he is alleged to have spent a part of his cut on a Colorado vacation home, as well as a residence in Houston. Pursley’s indictment is not a finding of guilt. His case will be tried in the near-future and he faces up to five years in federal prison on the conspiracy count, as well as five years for each of the three tax evasion counts in the indictment.

The past 10 years have ushered in a renewed focus on taxpayers that do not report offshore income on investments and businesses overseas. It was once very common to have an undisclosed Swiss bank account or money invested offshore through a corporation on a distant tropical island. Ensuring that taxpayers are paying their fair share of tax has always been a priority for most developed nations, including the United States. But as the world becomes more connected, governments now have tools that allow easier communication and collaboration with other governments.

With a focus on cross-border transactions, IRS teams dedicated to international tax closely scrutinize transactions that could be viewed as abusive. Even if a taxpayer doesn’t have the intent to defraud the United States, the IRS may still attempt to recharacterize a transaction. A tax attorney that has experience in negotiating with the IRS and state taxing authorities may play an instrumental role in helping ensure that your transactions are respected. An international tax defense attorney will work with you to ensure that all necessary steps are taken from a tax perspective before the transaction is executed.

If the transaction has already been completed and the IRS or state taxing authority is questioning its validity, a tax defense attorney will quickly get up to speed with regard to the transaction, determine the most effective next steps, and work with you though those steps to resolve the issue. Many taxpayers wait to contact a tax attorney until it’s late in the examination or investigation. The earlier that a tax attorney is brought onto the team to assist, the better.

The tax and accounting professionals at the Tax Law Offices of David W. Klasing have extensive experience representing taxpayers in a myriad of offshore tax-related matters. Whether you have an undeclared foreign bank account or are in need of tax advice relating to investing outside or inside of the United States, our team of zealous advocates are standing by to assist. Don’t let the threat of adverse tax consequences or negative interactions with the IRS or state taxing authorities cause you to lose sleep. Contact the Tax Law Offices of David W. Klasing today for a reduced-rate initial consultation.

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