The IRS recently announced that Abraham and Samar Elsaghir had pled guilty to multiple charges, including lying to an agency of the United States, tax evasion, and bankruptcy fraud. Prosecutors alleged that the couple, amongst other violations, made false statements on tax filings in order to improperly secure qualifications for food stamps.
Fraudulent schemes to abuse government public assistance programs are one of many areas of focus for the IRS’ Criminal Investigations Division (IRS-CI). Taking the recent statements and actions of the federal government’s tax agency together, it is clear that audits, as well as criminal investigations and prosecutions, are on the upswing.
To find out more about how you can safeguard yourself from getting caught up in the recent wave of IRS criminal investigative and prosecutorial activity, get in touch with one of the Dual Licensed Tax Attorneys and CPAs at the Tax Law Offices of David W. Klasing by calling (800) 681-1295 today.
Husband and Wife Plead Guilty for False Statements to a United States Agency, Tax Evasion, and Bankruptcy Fraud
Two married defendants from Dearborn Michigan were arraigned and pled guilty on February 23, 2022. Abraham Elsaghir, 52, pled guilty to one count of making a false statement to an agency of the United States, one count of tax evasion, and one count of bankruptcy fraud. Samar Elsaghir, 51, pled guilty to one count of false statement to an agency of the United States and one count of tax evasion.
According to the information and the plea agreements, in May 2017, Abraham and Samar Elsaghir filed a voluntary Chapter 7 petition for bankruptcy, and they received a discharge of their debts in August 2017. As the plea agreement acknowledges, however, the Elsaghirs made false declarations in their bankruptcy petition, by both failing to report and underreporting their income.
During the same time period, the Elsaghirs made similar false statements to both the I.R.S. on their 2016 tax return and to the U.S. Department of Agriculture in order to receive Supplemental Nutritional Assistance Program (SNAP) benefits, better known as food stamps.
In the plea agreements, the Elsaghirs agreed that, from 2014 to 2020, they had received nearly $60,000 in SNAP benefits they were not entitled to receive and that they, in fact, owed the IRS an additional $70,000 for all tax calendar years from 2014 to 2018. Abraham Elsaghir also agreed he owed and to pay over $166,000 to unsecured creditors in the bankruptcy case.
Both Abraham and Samar Elsaghir will appear for sentencing before Judge Laurie J. Michelson of the District Court for the Eastern District of Michigan on June 23, 2022. Both spouses face up to five years in prison, in addition to any monetary penalties or ordered restitution.
The Government is Investigating Schemes that Target Federal Assistance Programs
Not only is the government aware that there has been an increase in fraudulent schemes targeting government aid efforts, but they are actively increasing efforts to seek out the abusers for prosecution. There are a number of agencies involved in this effort, including the IRS, the FBI, and various District Attorneys’ Offices.
“We have seen an unprecedented number of people commit fraud on government programs,” said Josh Hauxhurst, Acting Special Agent in Charge of the FBI’s Detroit Division. This case involved multiples layers of deception – lying to the bankruptcy court, the IRS, and the [U.S. Department of Agriculture]. This conduct will not be tolerated, and individuals who make false statements to exploit resources intended for those most in need will be vigorously investigated and prosecuted.”
“The Elsaghirs’ plea serves as an important reminder that Federal income tax compliance should be equally shared among all Americans,” said Detroit IRS Criminal Investigation Special Agent in Charge Sarah Kull. “Conspiring to defraud the government with a scheme to underreport taxable income and to steal money meant for low-income families is unlawful and shameful.”
Other Focuses of IRS Investigative Efforts
With a new budget, updated technological sophistication, and an intense mandate from the White House, the IRS is looking to root out tax noncompliance in more areas than just SNAP and bankruptcy processes. Below are some of the areas in which the government has expressed significant interest in recent weeks and months.
COVID-19 Relief Program Schemes
As more information comes out about how federal pandemic assistance funds were obtained and used, it is becoming clear that many exploited the government’s aid efforts for their own illicit gain. To combat this, President Biden has signaled his administration’s willingness to go back through the record and investigate these issues, even going so far as to mention it in his most recent “State of the Union” address to Congress.
Foreign Asset Nondisclosure
Many U.S. taxpayers who have long had assets or accounts in foreign countries have avoided any issues because of the IRS’s limited capabilities in these areas. However, the federal tax watchdog has recently secured several favorable judgments concerning their ability to require foreign entity cooperation, making it more likely that past international tax issues that went undiscovered could now present themselves.
Cryptocurrency
As Bitcoin and other cryptocurrencies gain popularity, it is important to understand how the tax code treats them. This can be complicated, especially because tax legislation is likely to undergo changes as the use of crypto develops. If you need help recording and declaring your crypto assets and income, we urge you to contact our Dual Licensed Tax Lawyers and CPAs today.
The Tax Law Offices of David W. Klasing Can Provide the Tax Defense You Deserve
If you are concerned about how the uptick in criminal tax investigations and prosecutions may affect you or your small business, you should act soon before it is too late. To find out more about the services that our Dual Licensed Tax Attorneys and CPAs can provide, call us at the Tax Law Offices of David W. Klasing today at (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.
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 failed to provide accurate information to the IRS, you may be facing tax fraud charges if you do not come into compliance through a domestic or offshore voluntary disclosure. Our experienced dual licensed California Tax Fraud Defense Lawyers and CPAs are here to help. Call the Tax Law Offices of David W. Klasing at (800) 681-1295 to arrange a consultation with our team or schedule a reduced rate initial consultation directly HERE.
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.
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More Commonly Asked Tax Audit Questions
- How should Tax Audits be Handled by Criminal Tax Counsel?
- How to survive audit when I cheated on return being audited
- What is an eggshell audit?
- What is a reverse egg shell audit?
- Why is a reverse egg shell audit dangerous for a taxpayer?
- Warning signs of a criminal referral from an IRS audit
- Effective tax defense counsels goals in an egg shell audit?
- How are the 4 goals and outcomes 1 and 2 best obtained?
- What are the possible outcomes of an egg shell audit?
- Is it my right to know why I was selected for examination?
- What can I do to prepare for an audit?
- What is an IRS civil examination?
- How IRS decides which tax returns are audited
- What are my appeal options if I disagree with IRS?
- What are my basic taxpayer rights if the IRS audits me?
- Options if I am unable to pay at the conclusion of audit
- What a 30 or 90-Day Letter from the IRS means
- What is involved with appealing disagreements?
- Rights to disagree with IRS tax auditor’s findings
- Can I stop the IRS from repeatedly auditing me?
- Can I have the examination transferred to another area?
- Can I record my IRS interview and is it a good idea?
- How many years of returns are at risk during an audit?
- Common reasons for the IRS to conduct a tax audit
- How to avoid negative consequences from an IRS interview
- Have to agree to interview by taxing authority directly?
- Are all audits the same?
- What should I do if the IRS is investigating me?
- What if I don’t respond to a taxing authority audit notice
- Your rights during an IRS tax audit
- Risks of attending an IRS audit without a tax lawyer
- Most common audit technique used by taxing authorities
- Don’t go into an IRS audit without representation
- Why hire an attorney to represent me in an audit?
- Why hire David W. Klasing to represent me in an audit
Questions and Answers for Criminal Tax Representation
- When tax defense counsel parallels tax crime investigation
- Guilty of tax obstruction by backdating documents?
- To be found guilty of tax obstruction must a person actually be successful in impeding the IRS’s functions?
- Help! The Document I Gave the IRS Had False Information
- Tax crime aiding or assisting false return IRC §7206(2)
- What is the crime known as tax obstruction § 7212?
- What is the difference between tax perjury and tax evasion?
- What is the tax crime commonly known as tax perjury?
- What is a Klein Conspiracy?
- Increased possibility of civil action in IRS investigation
- Am I Guilty of Tax Evasion if the Law is Vague?
- What happens if the IRS thinks I committed tax crimes?
- What are ways to defend against a tax evasion charge?
- Difference between criminal tax evasion and civil tax fraud
- What accounting method does the IRS use for tax fraud
- Can I Change Accounting Method to the Accrual Method
- What is the willfulness requirement for tax evasion?
- I didn’t know I committed tax fraud. Can I get off?
- Concealed assets from IRS. Can I avoid tax evasion charges
- How government proves I willfully engaged in tax evasion
- What is the venue or court where a tax crime case is heard?
- Must the IRS prove tax crimes beyond a reasonable doubt?
- Is it a crime to make false statements to the IRS?
- Will the IRS overlook my tax evasion if it’s minor?
- Failed to tell IRS about my nominee account
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- Government says I attempted to evade my taxes. Now what?
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- How the IRS selects tax crime lead for investigation
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- What the IRS includes in indictment for tax case
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- IRS methods of gathering evidence to prove tax crime
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- Failure to keep records or supply information
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- What is attempting to evade payment of taxes?
- What is income tax evasion and how is it punished?
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- Is it tax evasion if my W-4 contains false statements?
- IRC §7201 attempt to evade vs. common-law crime of attempt
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- How government proves a taxpayer attempted tax fraud
- What is a tax that was “due and owing.”
- What is evasion of assessment for tax liability?
- Is evasion of assessment different from evasion of payment
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- What is the IRS burden of proof for tax fraud convictions?
- Are Tax Laws Constitutional?
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Questions and Answers on Unfiled Back Taxes
- What are the common issues that non-filers face?
- Risk of audit after filing delinquent prior year returns
- Can substitute return deficiency be discharge in bankruptcy
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- How important is it to the government that I didn’t file?
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- What happens after enforcement action has begun?
- Should I use an attorney, EA or a CPA to represent me when I re-enter the tax system?
- Why do people drop out of the tax system?
- What happens after the IRS identifies me as a non-filer?
- IRS has not previously filed substitute returns
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- How will the government force me to file returns?
- What penalties can IRS impose on delinquent tax filings?
- What should I do to re-enter the tax system?
- Can Law Office of David W. Klasing help me re-enter system?
- Will tax collection taken by authorities affect my credit
- I concealed bank accounts from the government
- Forgetting or failing to file tax return
