In June 2018, a federal grand jury returned an indictment, or charging document, criminally charging defendant Dr. Richard Rogers with felony tax evasion under 26 U.S. Code § 7201. According to the indictment, Dr. Rogers, a licensed chiropractor since 1982, operated a chiropractic business from his home in Northborough, Massachusetts. The indictment stated that Rogers “encouraged” his clients to pay using cash, and, when paid by check, “deposited the checks into a bank account titled not in his own name, but one that he opened and maintained” under a different name. Most significantly, Rogers, the indictment alleged, failed to file personal income tax returns throughout the period from 2008 through 2016. In June 2019, one year after being indicted, Rogers pleaded guilty to income tax evasion for the years 2012 through 2016. Our criminal tax lawyers discuss the details of his sentencing, which took place earlier this month.
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Chiropractor Ordered to Pay IRS $155K, Sentenced to 6 Months for Evading Income Tax
As our tax blog readers may have noticed, the U.S. Department of Justice (DOJ) frequently issues press releases when defendants are indicted or convicted of tax crimes. (Interestingly, more than 1,000 of the Justice Department’s news bulletins are currently tagged as “tax” topics, compared to 500 or fewer for virtually every other type of crime.) Over the previous year, the DOJ has posted at least three separate updates on Rogers’ case, which are available here, here, and here, in chronological order. Readers may find they make useful companions to the indictment, which is also linked above.
The indictment charged Rogers with five counts of tax evasion, which is a felony violation of 26 U.S. Code § 7201 (attempts to evade or defeat tax). Prosecutors alleged that, despite “well knowing” his obligations to file and pay federal income taxes, Rogers deliberately failed to file federal personal income tax returns for the tax years 2012 through 2016, resulting in five criminal counts. In particular, the indictment highlighted four actions that indicated Rogers acted willfully to evade his tax liabilities:
- “Making extensive use of, and dealing in, cash” (a remark which should remind business owners that, unfortunately, cash-intensive businesses have an increased likelihood of being audited)
- “Utilizing a nominee bank account to conceal business receipts [that were] paid by check” instead of cash, as described above
- “Using Postal Money Orders to pay expenses” he owed various creditors, including credit card companies, automotive lenders, and mortgagees
- “Concealing ownership of his residence and place of business by using nominee entities”
In accordance with 26 U.S. Code § 7201, the maximum prison sentence for tax evasion is five years, while the maximum criminal fine is $100,000 (or, for corporations, $500,000). At his hearing before U.S. District Judge Timothy S. Hillman this September, Rogers was sentenced to six months – a comparatively lenient sentence, considering the 17-month average reported by the United States Sentencing Commission. He was also ordered to compensate the IRS approximately $155,160.
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Carrying a maximum sentence of 60 months in federal prison, tax evasion is one of the most serious tax crimes a defendant can be charged with. Other tax offenses also have serious consequences, such as a three-year maximum sentence for making and subscribing false returns, or a one-year maximum sentence for willful failure to file or pay taxes.
Regardless of the offense being charged, or that is at risk of being discovered during an audit, it is in your best interests to consult a tax defense lawyer immediately if you are under investigation or audit in connection with alleged tax crimes. Contact the Tax Law Office of David W. Klasing right away by calling (800) 681-1295, or contact us online to schedule a reduced-rate consultation.
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Also, we’ve expanded our offices! In addition to our offices in Irvine and Los Angeles, the Tax Law Offices of David W. Klasing now have offices San Bernardino, Santa Barbara, Panorama City, Oxnard, San Diego, Bakersfield, San Jose, San Francisco, Oakland and Sacramento.
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