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Michigan Business Owner Indicted on Tax Evasion and Bank Fraud Charges

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Michigan Business Owner Indicted on Tax Evasion and Bank Fraud Charges

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According to a Department of Justice press release, a Michigan attorney was recently indicated for tax and bank fraud. The charges relate to the defendant’s failure to pay over employment taxes and his subsequent attempt to thwart IRS collection efforts. This story should serve as a reminder to taxpayers with outstanding tax debt that playing games with the IRS, including attempting to hide sources of income or valuable property, typically only makes matters worse. If you have received a notification that your tax return will be audited, have failed to file a tax return for one or more years, or have a large amount of unpaid tax debt, it is in your best interest to contact an experienced tax defense attorney.

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Defendant Failed to Pay Over Employment Taxes, Thwarted IRS Collection Efforts

Prosecutors allege that Scott Allan Chappelle of East Lansing, Michigan, was the owner and operator of Terra Management Company LLC, Terra Holding LLC, and Strathmore Development Company Michigan LLC. Prior to 2010, Chappelle failed to pay over employment taxes to the IRS for the many employees at his various companies. The IRS determined that the unpaid employment taxes exceeded $830,000.

Between 2010 and 2019, Chappelle is accused of evading the payment of his tax debt through a variety of methods. First, prosecutors claim that Chappelle purchased real estate under the names of nominees instead of his own. Second, IRS criminal investigations agents interviewed Chappelle and questioned him about other properties that he owned. Chappelle allegedly lied about the purchases of any new real estate, even though the government now asserts that he purchased a lake home and a condominium.

Lastly, Chappelle is accused of lying while attempting to secure a mortgage. Bank officials asked Chappelle whether he was a party to a lawsuit or if he had any outstanding tax debt. Federal officials allege that he lied in both instances as he had at least two lawsuits against him pending and the tax debt exceeding $830,000, discussed above.

Chappelle faces charges on tax evasion, making a false statement, filing false documentation with the IRS, and bank fraud. If convicted, Chappelle could face a lengthy prison sentence as the bank fraud count can carry up to 30 years, alone.

When to Seek Guidance from an Experienced Tax Attorney

Falling behind on your tax filings or tax payments can be easy to do. The more difficult endeavor becomes coming back into compliance. Many taxpayers become so overwhelmed with the process that they simply ignore the problem. In some situations, some taxpayers will even attempt to fend off collection efforts by the IRS by making false statements about their financial circumstances. As our story above illustrates, such a strategy can quickly backfire and turn a monetary quandary into a criminal prosecution very quickly.

If you have failed to file a tax return for one or more years, have a tax return that is under examination by the IRS or state tax officials, or have a substantial amount of tax debt that has gone unpaid, consulting with an experienced tax defense attorney should be the first item on your to-do list. Working with your tax lawyer, you will determine all of your available options and develop a strategy to execute on one of them. Your tax defense attorney will be with you every step of the way and with every interaction with the IRS or state taxing authority. Ignoring the problem or going up against the government alone can be a recipe for disaster.

We Are Here for You

Regardless of your business or individual tax needs, the professionals at the Tax Law Offices of David W. Klasing are here for you. We are open for business and our team will help ensure that your business is too. Contact the Law Offices of David W. Klasing today to discuss your business with one of our professionals.

In addition to our main office in Irvine,  the Tax Law Offices of David W. Klasing has unstaffed (conference room only) satellite offices in Los Angeles, San Bernardino, Santa Barbara, Panorama City, Oxnard, San Diego, Bakersfield, San Jose, San Francisco, Oakland, Carlsbad and Sacramento. During the COVID-19 pandemic, our staff are working from home, but have full virtual meeting capability.

Our office technology allows clients to meet virtually via GoToMeeting. With end-to-end encryption, strong passwords, and top-rated reliability, no one is messing with your meeting. To schedule a reduced-rate initial consultation via GoToMeeting follow this link.   Call our office and request a GoToMeeting if you are an existing client.