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Man Learns That Even Illegally Acquired Money Must Be Reported

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Man Learns That Even Illegally Acquired Money Must Be Reported

Most have heard of the term “power of attorney”. It is typically used to describe a grant of authority to another person to handle various scopes of financial affairs. Generally, those that are granted a power of attorney take on the role with care and ensure that they do what is right for whoever granted the right to them. But sometimes the individual that holds the power becomes corrupted and has the ability to siphon money and other assets from their victim. That is precisely what happened in the case of William Richmond, a 59-year-old from Atkinson, New Hampshire

According to several news outlets, Richmond pled guilty last week to three counts of tax evasion with regard to a scheme that allowed him to illegally funnel money from his victim’s accounts into his own. Prosecutors allege that Richmond was granted a Power of Attorney by Richard Piller for the purpose of managing Piller’s affairs while he and his wife were overseas for elongated periods of time. Authorities say that while the Piller’s were gone, Richmond not only stole money from the Piller’s accounts, but also used the currency in those accounts to pay for his own personal expenses.

Being Investigated By Any Government Entity? The IRS Will Be Waiting For You

As the Federal Bureau of Investigation was investigating Richmond for wire fraud, with regard to the theft of the Piller’s money, the IRS Criminal Investigation Division was called in to assist. As it turns out, not only did Richmond steal money, he failed to include the stolen funds as income on his taxes for years 2006 through 2008. This brings up an interesting point: the Internal Revenue Code requires that you report all income from whatever source derived. This means that even money that is obtained illegally must be reported on a person’s tax return. Richmond had previously stated that he had only received interest income during the years in question and purported that he owed no taxes.

Richmond will be sentenced on November 3rd and faces serious time in federal prison. Each count of tax evasion carries a maximum sentence of five years in a federal prison. In addition to the potential 15-year prison sentence, Richmond could also face fines up to $250,000. Finally, it is highly likely that Richmond will be ordered to pay back the money that he stole from the Piller’s as well as the taxes that he evaded, an amount that will likely leave him financially devastated.

The lesson to be learned from this story is that whenever any governmental entity is investigating an individual, the IRS may not be far behind them. The FBI, ATF, and Postal Inspectors know that any money that is made through illegal activity must be reported for tax purposes and any effort to hide the illegally acquired money is likely an act of tax evasion. These entities will take little time to refer the case over to the IRS Criminal Investigations Division.

If you are being investigated for any tax or non-tax related crime that involves the receipt of money from any source that you didn’t claim on your taxes, it is in your best interest to contact an experienced tax attorney as soon as possible. Even if you are able to convince an investigator that you received the money legally, you may have nonetheless committed tax fraud by not reporting it to the IRS.

The tax and accounting professionals at the Tax Law Offices of David W. Klasing have years of experience assisting taxpayers navigate the complicated processes that involve the IRS and the Department of Justice. Walking into an examination, investigation, or tax litigation without superior representation could be sealing your own fate. Contact the Tax Law Offices of David W. Klasing today for a reduced-rate consultation.