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According to a Department of Justice press release, a Las Vegas real estate broker was recently convicted of failing to file tax returns or pay tax for over 20 years. This story highlights the predicament of many taxpayers throughout the United States. When a taxpayer gets behind on tax payments, it is often difficult to catch up. Though, the prison sentence that the defendant in this case will likely serve is a reminder that if you make the IRS and Department of Justice come after you, they will do so with the full force of the law. Contacting an experienced tax defense attorney will allow you to develop a strategy to try to mitigate some of the negative repercussions that the defendant in the case has and will encounter, most importantly, the risk of criminal tax prosecution.
Prosecutors alleged that William Walter Jr. earned substantial income over the past 20 years but failed to file a tax return or pay taxes during that time. A real estate broker, Walter earned over $500,000 for the years 2004 through 2009. The IRS realized the he had not filed a federal income tax return on that income and initiated collection procedures. In order to avoid the collection of the tax he owed during that time, Walter structured his finances to utilize his business bank accounts for personal expenses. Additionally, Walter used loans to borrow against property that he owned, drawing down his equity in the property for the purposes of evading the collection of tax.
Prosecutors presented evidence that showed that Walter’s last income tax return had been filed in 1998, showing zero income. Walter faces up to five years in prison for the tax evasion count and one year in a federal prison for each count of failing to file a tax return. Additionally, Walter will likely be required to serve a term of supervised release after his time in prison, and likely will be required to pay restitution to the IRS for the taxes that he owes. Walter will be sentenced on June 21st.
Many taxpayers that have failed to file tax returns for one or two years then fall into a spiral of noncompliance that can involve not filing tax returns for decades or more. The thought among taxpayers is often “if I file a tax return this year, the IRS will find out that I did not file a tax return last year”. The non-filing continues until the taxpayer is finally caught by the IRS or state taxing authority, and by that time, enough back taxes, interest, and penalties have likely piled up that the taxpayer will likely have a difficult time getting out of the hole they have dug.
Luckily, there is help out there. An experienced and dually qualitied tax defense attorney and CPA is perfectly suited to assist a taxpayer in getting back into compliance and keeping their scalp intact in the process. A tax defense attorney is like a doctor for tax compliance and has a bag full of tools that can help make getting right with the government less painful than if the government were to make the discovery and force you into submission. It is ALWAYS better to approach the government about your non compliance than to have them reach out to you about it.
An experienced tax attorney has both the technical tax knowledge to develop a strategy based firmly in tax law to rectify the situation and extensive legal training that can be used navigate the complex processes that the IRS and state taxing authorities have established. In addition, an experienced tax defense attorney will be present at your meetings with the government, should there be any, to ensure that the government does not solicit criminal admissions to questions that may be used against you in the future.
An experienced CPA will make sure that the accounting for your business withstands scrutiny. The last thing you want to do when re-entering the system is to get caught cheating on the way back in. There is no debtors prison in this country but the very act of non-filing when you have a filing requirement is already a completed crime. The odds of an audit being opened after you reenter the system are greatly elevated. Our firm has never had a client that we have helped to renter the system after being a non-filer criminally prosecuted. While this is not a guarantee, we feel very strongly about our ability to successfully navigate any part of the process which invariably involves assessment, and occasionally involves audit or investigation, any necessary appeal to the collections process.
The tax and accounting professionals at the Tax Law Offices of David W. Klasing have extensive experience in representing taxpayers that have fallen out of compliance with federal or state tax laws. From individuals to businesses, our team of zealous advocates is standing by to help develop a plan will aim to help mitigate the potentially devastating impacts of being caught up in a IRS or state tax examination or criminal investigation. Do not let the threat of a criminal investigation or jail time keep you up at night. Contact the Tax Law Offices of David W. Klasing today for a reduced-rate consultation.
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