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Michigan Business Owner Charged with Various Tax Offenses

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    According to a Department of Justice press release, a Michigan business owner was recently charged with tax evasion and other federal offenses after an extensive use of cash to pay for business expenses, among other illegal activity. This story reminds those with both personal and business activity that taking liberties such as commingling business and personal expenses can have both civil and criminal tax consequences. If you have paid for personal expenses using business funds and failed to report such an amount as income or worse yet, took a deduction for such expenditure, it is in your best interest to have a conversation with an experienced tax defense attorney to determine the level of exposure that you face.

    Defendant Allegedly Obscured True Income, Used Cash to Evade Taxes

    Court records reveal that Ryan Richmond was the owner and operator of Relief Choices, LLC, a marijuana dispensary in Warren, Michigan. Prosecutors allege that between 2011 and 2014, Richmond used cash to pay for business expenses and routed customer payments through third-party entities to conceal such income. Additionally, IRS investigators allege that in 2015 and 2016, Richmond made false statements to an IRS auditor regarding the control of and the profit earned by his company. Lastly, federal prosecutors allege that Richmond failed to file an individual tax return for at least one year.

    If he is convicted, Richmond faces up to five years in prison for each count of tax evasion. The counts related to making false statements to the IRS also carry a maximum sentence of five years. The obstruction of the IRS count carries a maximum sentence of up to three years in prison and finally, Richmond faces up to one year in prison for each year that he failed to file a tax return.

    Working with an Experienced Tax Lawyer to Get Right with the Government

    Many Americans who own their own businesses take liberties when benefiting from their business expenditures. For instance, a business owner may use a luxury vehicle for work purposes and write off certain expenses pertaining to the maintenance and other costs of the vehicle as business expenses. While there is settled law about expenses that have personal and business overlap, some taxpayers take the commingling of their business and personal expenses too far. Additionally, many of the same taxpayers attempt to artificially lower their taxable income by engaging in skimming, structuring, or other methods that fraudulently reduce their earnings.

    If you have failed to file a tax return for one or more years, or have engaged in one of the illegal strategies described above and find yourself under audit or criminal tax investigation it is in your best interest to contact an experienced tax defense attorney as soon as possible to discuss your options. Fraudulently reducing your taxable income or using business funds to pay for personal expenses can result in civil and criminal exposure. As the defendant in this case has discovered, the possibility of a federal prison sentence is a reality. Your seasoned tax defense lawyer will work with you to identify the areas of exposure that you face and craft a winning strategy to bring you into compliance. All the while, you will not have to go up against the IRS or state taxing authorities alone.

    Note: As long as a taxpayer that has willfully committed tax crimes (potentially including non-filed foreign information returns coupled with affirmative evasion of U.S. income tax on offshore income) self-reports the tax fraud (including a pattern of non-filed returns) through a domestic or offshore voluntary disclosurebefore the IRS has started an audit or criminal tax investigation / prosecution, the taxpayer can ordinarily be successfully brought back into tax compliance and receive a nearly guaranteed pass on criminal tax prosecution and simultaneously often receive a break on the civil penalties that would otherwise apply. 

    It is imperative that you hire an experienced and reputable criminal tax defense attorney to take you through the voluntary disclosure process. Only an Attorney has the Attorney Client Privilege and Work Product Privileges that will prevent the very professional that you hire from being potentially being forced to become a witness against you, especially where they prepared the returns that need to be amended, in a subsequent criminal tax audit, investigation or prosecution.

    Moreover, only an Attorney can enter you into a voluntary disclosure without engaging in the unauthorized practice of law (a crime in itself). Only an Attorney trained in Criminal Tax Defense fully understands the risks and rewards involved in voluntary disclosures and how to protect you if you do not qualify for a voluntary disclosure.

    As uniquely qualified and extensively experienced Criminal Tax Defense Tax Attorneys, KovelCPAs and EAs, our firm provides a one stop shop to efficiently achieve the optimal and predictable results that simultaneously protect your liberty and your net worth. See our Testimonials to see what our clients have to say about us!

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