Kansas Business Owner Gets 1 Year of Probation for Federal Income Tax Evasion

Published by David Klasing at March 11, 2019

Businessman Fails to Report Income, Ordered to Pay IRS Over $100K

In his guilty plea, Barker confessed to failing to report all of his taxable business income to the IRS, underreporting income from the company during the four-year period from 2011 to 2014. According to the DOJ, Barker “took direct payments from customers, removed cash from business deposits and altered invoices to show less income for the business” than the actual amounts earned.

Many tax offenders receive even tougher penalties than a year of probation – including prison time. According to statistics published by the United States Sentencing Commission, “More than half of tax fraud offenders were sentenced to imprisonment only (59.1%)” in 2017, while, during the same period, “The average sentence length for tax fraud offenders was 17 months,” or one year and five months in prison. Like many tax offenders, Barker also paid a high financial price, with costly IRS restitution orders commonplace. (Take, for example, the Minnesota business owner recently ordered to pay the IRS over $1 million, or the Connecticut salesman ordered to pay more than $650,000.)

Tax evasion is a felony offense, defined at 26 U.S. Code § 7201, which refers to the crime as an “attempt to evade or defeat tax.” Under this statute, the maximum federal prison sentence for tax evasion is five years, in addition to or in place of a criminal fine of up to $100,000 (or, for corporations, $500,000), separate from any IRS restitution otherwise imposed. Other crimes similar to tax evasion include:

Willful failure to file return, supply information, or pay tax – Under 26 U.S. Code § 7203, it is a misdemeanor offense to knowingly and intentionally (“willfully”) fail to file a tax return, or to fail to pay estimated taxes. The criminal penalties are fines of up to $25,000 and up to one year in jail. The civil penalty is generally 5% or 0.5% of the outstanding balance per full or partial month in which the return remains unfiled or unpaid, respectively. If you failed or forgot to file taxes in 2018, 2017, 2016, or earlier, ask our IRS tax attorneys about California non-filer assistance for filing back taxes.

Fraud and false statements – The first two sections of 26 U.S. Code § 7206 define two separate (and common) violations: (1) willfully making or subscribing a false return (U.S. Code § 7206(1)), and (2) aiding or assisting a false return (U.S. Code § 7206(2)). The former occurs when a taxpayer “willfully makes and subscribes any tax return… or other document… which he [or she] does not believe to be true and correct…”; the latter, when a financial professional assists a taxpayer in doing so. Examples include underreporting taxable income and falsely claiming tax credits. The maximum criminal penalty for either type of violation is a fine of $100,000 and a prison sentence of three years.

Orange County IRS Tax Evasion Attorneys Offering Reduced-Rate Consultations

Tax evasion, failure to file returns, failure to pay taxes, filing false returns, aiding false returns, and other tax crimes are punishable by probation, high fines, large restitution orders, and months or years of prison time, in addition to professional sanctions where appropriate. The consequences of a tax evasion arrest or investigation can be devastating. Protect your rights aggressively and proactively by seeking counsel from an award-winning income tax evasion lawyer with more than 20 years of legal experience practicing tax law in California. To arrange a confidential, reduced-rate consultation, contact the Tax Law Office of David W. Klasing online, or call our main office in Irvine at (800) 681-1295 today.