According to a Department of Justice press release, an Idaho man recently pleaded guilty to tax evasion after failing to report more than $500,000 of income over seven tax years. This story should serve as a reminder to those who have under-reported income or over-reported deductions to evade federal income tax. If you have failed to file a tax return for one or more years or have falsified your federal or state income tax returns, it is in your best interest to consult with an experienced tax defense attorney to develop a strategy to get right with the government.
Defendant Hid Income, Failed to Pay Taxes for At Least Seven Years
Court documents reveal that Scott Koritznsky of Meridian, Idaho pleaded guilty to one count of tax evasion after federal authorities accused him of taking various steps to evade the payment of federal income taxes. Federal investigators discovered that Koritznsky did not have a bank account in his name but caused his business income to be deposited into the accounts of others. Koritznsky’s expenses were then paid directly out of the third-party accounts. Purchases made from such accounts included checks made to cash, private school tuition payments, and rent payments.
Koritznsky will be sentenced in July. He faces up to five years in federal prison for the one count of tax evasion. Additionally, Koritznsky could be sentenced to serve up to three years of supervised release, commencing upon the completion of his federal prison term. Lastly, Koritznsky will likely be ordered to pay restitution to the IRS, representing the tax loss that he caused. This case illustrates that there are two ways to commit income tax evasion. In the assessment process by purposefully understating tax due and ownable and in the payment process on tax debt that is already on the books through evasion of payment.
Getting Right with the Government After Getting Behind
As the defendant in the story above has discovered, the repercussions for committing tax crimes can be life changing. In addition to having to come up with the tax due, interest, and penalties, it is likely that the defendant will be required to spend a considerable amount of time in federal prison. Any outstanding tax exposures should be addressed before they escalate to the point of a federal prosecution.
Working with an experienced tax lawyer, you will identify the extent of your tax exposures and work on developing a strategy that can be employed to come into compliance. While there are numerous options that can be used to correct past tax mistakes, your seasoned tax attorney will work to ensure that the correct avenue is used, given your particular facts and circumstances. You should discuss any tax position you have taken that you could not support if it were questioned by the a State Taxing Authority or the IRS in an audit, eggshell audit, reverse egg shell audit or criminal tax investigation. While you are being represented by a tax defense attorney, you will not have to interact with the IRS or State Tax Authority alone.
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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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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Questions and Answers on Unfiled Back Taxes
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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
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- 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
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- 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
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- 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?
- I forgot to pay my taxes or estimated tax. Is this a crime?
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- 5 Ways to Respond to Tax Evasion Charges
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- Requesting conference before investigative report is done
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- What can you generally tell me about tax crimes?
- Continuing filing requirement with investigation pending
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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 income tax evasion and how is it punished?
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- What is the crime of failure to pay tax? What is punishment
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- Specific examples of “attempting” to evade tax assessment
- What is the so-called Spies evasion doctrine?
- Does overstating deductions constitute tax evasion?
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- IRC §7201 attempt to evade vs. common-law crime of attempt
- What are the penalties for Spies tax evasion?
- 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?
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- What is the source of law that defines tax evasion?
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- Common reasons the IRS and DOJ start investigations
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- What is a proffer agreement and what are the risks?
- Why to have an attorney to review a proffer agreement
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- Limited use immunity from proffer agreements
- Difference between civil and criminal fraud allegations
