With funding dwindling for many government agencies, it is becoming commonplace for federal agencies to work together to bring down and lock up those who are in violation of the law. As this story details, there are often negative tax implications that come from being investigated for unrelated crimes. When investigators uncover evidence of seemingly unrelated cases of tax fraud or evasion, they are quick to turn it over to the IRS and Department of Justice. If you have violated federal law, you should consider what the IRS or other federal investigators might dig up from a criminal tax perspective.
According to a press release by the Department of Justice, Yaowapha Ritdet, 56, of northern California, was sentenced to 24 months in a federal prison. Court documents revealed that Ritdet owned two Thai restaurants in northern California and staffed them with workers who were not authorized to work in the United States. In addition to hiring illegal immigrants, she was accused of underpaying the employees. Court documents revealed that Ritdet instructed the employees to not talk to anyone about their employment at Ritdet’s restaurants. She paid the employees in cash and did not pay employment taxes associated with the cash wages.
In addition, Ritdet was accused of underreporting several tax items including gross receipts, sales, and income from her restaurants. An investigation into Ritdet further uncovered that she failed to report rental income. Finally, tax authorities discovered that she had failed to report a foreign bank account that she controlled in Thailand, as required by Foreign Bank Account Reporting (FBAR) laws.
Ritdet pleaded guilty to corruptly endeavoring to obstruct the internal revenue laws and harboring illegal aliens for profit in August of 2016. In addition to her two-year federal prison sentence, Ritdet was sentenced to serve three years of supervised release after she is released from federal prison and was ordered to pay restitution in excess of $567,000.
The prosecution resulted from a joint investigation between the IRS Criminal Investigation Division and U.S. Immigration and Customs Enforcement’s Homeland Security Investigations. The investigation evidences the federal government’s willingness to work together to identify and prosecute offenses across the federal criminal law and regulatory spectrum. This style of investigation and prosecuting should put business owners who may be breaking any laws (voluntarily or involuntarily) on notice, as their activities may not only result in prosecution for the underlying illegal activity (such as harboring illegal aliens for profit), but may trigger a criminal tax investigation that could lead to additional criminal charges.
Only an experienced tax attorney that is also a CPA can give you the technical tax and accounting assistance that you require and the comprehensive legal advocacy that you deserve. Attorneys have received extensive training and education in constitutional law, criminal law and procedure, and criminal tax law, a feature that is unique among tax professionals. If you are being audited or may be in violation of the law (tax-related or otherwise) that could result in an investigation, it is in your best interest to contact an experienced criminal tax defense attorney as soon as possible to ensure that your tax affairs are in good hands.
The tax and accounting professionals at the Tax Law Offices of David W. Klasing have a plethora of experience representing taxpayers in various situations ranging from individual and business tax planning and compliance to civil audit and criminal tax investigations and the related appeals and where necessary, litigation. Our team of zealous advocates is standing by to develop an effective and personalized strategy for your particular set of circumstances. Do not lose sleep over tax troubles with the IRS or state taxing authority. Contact the Tax Law Offices of David W. Klasing today for a reduced-rate consultation.
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Here is a link to our practice overview video on warning signs than an audit has gone criminal.
Here is a link to our practice overview video on criminal tax evasion defense.