IRS Launches Pre-Filing Tax Enforcement Actions
Each year as tax day approaches, the IRS and Department of Justice (DOJ) are predictably busy. The agencies make an annual showing of their enforcement activity in the months, weeks, and days leading up to the tax filing deadline. Through this effort, the IRS and DOJ attempt to put taxpayers on notice that the federal government is watching, identifying and prosecuting average, everyday taxpayers who commit fraud. In many cases, the indictments charge the taxpayers with multiple tax crimes stemming from years of non-compliance. However, these high-profile prosecutions should not give taxpayers the impression that tax enforcement season is limited to March and April. Rather, investigators, auditors, and prosecutors work year-round to identify, prosecute and convict taxpayers who fail to comply with all aspects of their obligations to file and pay taxes.
In fact, last year, Stephen Boyd, Special Agent-in-Charge of the IRS Criminal Investigation Division in Chicago stated, “Tax fraud does not know a season
-- IRS special agents pursue criminals year round, not only at filing deadlines. Taxpayers who might be thinking about cheating on their taxes should think twice or they will risk the consequences.” Recently, one of those taxpayers indicted in a deterrence enforcement action from last year pleaded guilty to tax charges and will soon face sentencing.
Last Year Eleven Chicago-area Taxpayers Were Indicted before Tax Day to Deter Others
The IRS enforcement actions
coming in the days and weeks leading up to tax filing season are often high-profile and noteworthy in either the scope of the fraud or the number of those accused. The enforcement action in Chicago netted average taxpayers, tax preparers, and other individuals including:
- William Daddano – Daddano was a respected suburban businessman who owned a real estate appraisal business. Mr. Daddano was accused of using his company to funnel income away from his personal finances and using the concealed income to pay personal expenses.
- Leopold Rodriguez – Last year, Mr. Rodriguez was accused of diverting income from sales made by his employer to personal accounts he controlled. Prosecutors also alleged that Rodriguez filed false tax returns.
- Ebony Richardson and Latasha Weatherall – These Chicago individuals were accused of engaging in a scheme to fraudulently claim tax refunds. They faced 4 counts of wire fraud, two counts of theft of government services and other charges.
- Tiffany Eichelberger-Myers – Eichelberger-Myers is a tax prepared and the owner of “Tiff’s Taxes” Prosecutors charged that she fraudulently claimed more than $1 million in tax refunds on the basis of false credits and deductions.
- David A. Brown – Brown was also a tax preparer who was charged with tax crimes including 33 counts of filing false claims and 4 counts of filing false income tax returns.
- Sol K. Winer – Winer was charged with a single count of understating income in one tax year. Even taxpayers whose potential wrongdoing is isolated can face tax charges.
- Dyone Dorsey and Janet Dorsey – As former operators of “Dorsey’s Tax Service” the Dorseys faced a 35-count indictment stemming from allegations that the preparers falsely claimed business losses for clients. They also faced charges for filing false tax returns on their own behalf.
- Ronald Taylor – Mr Taylor faced tax charges based on allegations that he filed false tax returns for trusts in 2007, 2008, and 2009 falsely claiming $900,000 in refunds.
- Solomon Smith, Jr – Smith faced a two-count indictment on the basis that he allegedly filed false income taxes for trusts.
As the tax filing deadline approaches, taxpayers are encouraged to watch the news in the upcoming weeks since similar large enforcement actions are likely to be announced soon.