According to a Department of Justice press release, a Michigan man was recently indicted for allegedly committing both tax and bankruptcy fraud. This story reminds taxpayers that positions taken on a tax return that seriously deviate from the truth can be criminally investigated by the IRS or state taxing authorities. Additionally, taxpayers should avoid making false statements to the IRS when confronted about potential tax noncompliance as lying to a federal agent is a felony in and of itself. If you have failed to file a tax return for one or more years, or have filed tax returns containing knowingly-false information, it is in your best interest to contact an experienced tax defense attorney to determine your exposure and the best way to come into tax compliance without facing criminal tax prosecution.
Defendant Allegedly Failed to Properly Report All Items of Income
Court records indicate that Donald Stanley LaVigne, of Detroit, Michigan, was recently indicted on various criminal counts after allegedly failing to report substantial amounts of insurance commissions as a part of his annual individual tax return filings. The alleged tax return omissions occurred between 2013 and 2018. When the IRS identified LaVigne’s potentially criminal behavior and attempted to contact him, he provided false information to the Service asserting that the insurance commissions were not taxable income to him.
LaVigne filed for bankruptcy in 2018, but the Department of Justice alleges that he failed to identify the IRS as a creditor and that he failed to list his tax debt on the bankruptcy schedules listing all outstanding debt. Additionally, the Justice Department alleges that LaVigne provided false information as to his true income for 2016 and 2017 as part of his bankruptcy proceedings. When asked about 2017 federal income tax return, LaVigne is accused of having falsely indicated that his bankruptcy attorney had revenied his tax return and it was “correct and complete”, despite it allegedly being falsified.
If LaVigne is convicted, he faces up to three years in federal prison on each count of filing a false tax return, five years for each count of bankruptcy fraud, and five years in prison for the count related to making a false statement. Additionally, a conviction can carry a term of supervised release following physical incarceration. Lastly, those convicted of tax crimes are generally required to pay restitution to the IRS, representing the tax loss that they caused.
Consulting With an Experienced Tax Attorney to Come into Tax Compliance
The defendant in this case is alleged to have dug himself into a deeper hole and instead of seeking assistance in getting himself out, dug even deeper. Making a mistake or fudging on a tax return is not uncommon. Whether simply a scrivener’s error or an intentional misrepresentation, the tax law provides avenues for taxpayers to work with tax defense lawyers and rectify their tax noncompliance and remove the risk of criminal tax prosecution as long is the taxpayer is willing to knock on the government’s door before the government knocks on the taxpayer’s door with an audit or criminal tax investigation. Taxpayers find themselves in ever increasing hot water with the IRS Criminal Investigations Division and the Department of Justice, Income Tax Division when they try to either hide their wrongdoing or double down on the untruthfulness originally contained in the tax returns being investigated. A similar fact pattern emerges when a taxpayer fails to file a tax return year-over-year.
If you have failed to file a tax return for one or more years or have taken a position on a filed tax return that could not be supported upon an audit, eggshell audit, reverse egg shell audit or criminal tax investigation, it is in your best interest to contact an experienced tax defense attorney to determine your best options to get right with the government and remove the risk of criminal tax prosecution. Together, you will determine your level of civil and/or criminal tax exposure. Then, you will jointly decide on a strategy that will put your physical and financial freedom top of mind. While you are being represented by a seasoned tax defense attorney, you will not have to go up against the IRS 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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Regardless of your business or estate 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.
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Questions and Answers on Unfiled Back Taxes
- What are the common issues that non-filers face?
- Risk of audit after filing delinquent prior year returns
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- How important is it to the government that I didn’t file?
- Delinquent tax return criminal prosecution likelihood
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Questions and Answers for Criminal Tax Representation
- When tax defense counsel parallels tax crime investigation
- Guilty of tax obstruction by backdating documents?
- To be found guilty of tax obstruction must a person actually be successful in impeding the IRS’s functions?
- Help! The Document I Gave the IRS Had False Information
- Tax crime aiding or assisting false return IRC §7206(2)
- What is the crime known as tax obstruction § 7212?
- What is the difference between tax perjury and tax evasion?
- What is the tax crime commonly known as tax perjury?
- What is a Klein Conspiracy?
- Increased possibility of civil action in IRS investigation
- Am I Guilty of Tax Evasion if the Law is Vague?
- What happens if the IRS thinks I committed tax crimes?
- What are ways to defend against a tax evasion charge?
- Difference between criminal tax evasion and civil tax fraud
- What accounting method does the IRS use for tax fraud
- Can I Change Accounting Method to the Accrual Method
- What is the willfulness requirement for tax evasion?
- I didn’t know I committed tax fraud. Can I get off?
- Concealed assets from IRS. Can I avoid tax evasion charges
- How government proves I willfully engaged in tax evasion
- What is the venue or court where a tax crime case is heard?
- Must the IRS prove tax crimes beyond a reasonable doubt?
- Is it a crime to make false statements to the IRS?
- Will the IRS overlook my tax evasion if it’s minor?
- Failed to tell IRS about my nominee account
- Audit risk with cash based business transactions
- How to defend a client charged with tax evasion
- Is it tax evasion if I didn’t file income tax return?
- Government says I attempted to evade my taxes. Now what?
- I forgot to pay my taxes or estimated tax. Is this a crime?
- Government proof I “willfully” failed to pay taxes
- 5 Ways to Respond to Tax Evasion Charges
- Being audited after using a tax professional
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- How the government proves deficiency in a tax evasion case
- Do prior tax crimes factor into new IRS tax convictions?
- Requesting conference before investigative report is done
- Requesting conference after IRS Special Agent Report
- What are my rights during an IRS criminal investigation?
- Avoid prosecution for tax crime with voluntary disclosure?
- Defense tactics that make it hard for to prove willfulness
- How a tax attorney can stop your criminal tax case?
- What can you generally tell me about tax crimes?
- Continuing filing requirement with investigation pending
- Federal criminal code crimes that apply to tax issues
- Penalty for making, subscribing, and filing a false return
- CID special agent’s report for criminal prosecution
- What is the discovery process in a criminal tax case?
- What the IRS includes in indictment for tax case
- What is the hardest element of a tax crime to prove?
- IRS methods of gathering evidence to prove tax crime
- What does a grand jury do in IRS tax crime prosecution?
- Failure to keep records or supply information
- Failure to make a return, supply information, or pay tax
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- What is income tax evasion and how is it punished?
- What is attempted income tax evasion?
- What is the crime of failure to pay tax? What is punishment
- Crime of making or subscribing false return or document
- Criminal Investigation Division investigation tactics
- Tax crimes related to employment tax forms and trust funds
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- How the IRS generates leads about suspected tax crimes
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- Specific examples of “attempting” to evade tax assessment
- What is the so-called Spies evasion doctrine?
- Does overstating deductions constitute tax evasion?
- Is it tax evasion if my W-4 contains false statements?
- IRC §7201 attempt to evade vs. common-law crime of attempt
- What are the penalties for Spies tax evasion?
- How government proves a taxpayer attempted tax fraud
- What is a tax that was “due and owing.”
- What is evasion of assessment for tax liability?
- Is evasion of assessment different from evasion of payment
- Does the IRS have a dollar threshold for tax fraud?
- What is the IRS burden of proof for tax fraud convictions?
- Are Tax Laws Constitutional?
- What is the source of law that defines tax evasion?
- Does section 7201 create two distinct criminal offenses?
- Does tax evasion definition include partnership LLC
- What if I helped someone else evade taxes?
- Is it illegal to overstate deductions on my tax return?
- Is it illegal to conceal bank accounts from the IRS?
- Do later losses justify prior deductions?
- Common reasons the IRS and DOJ start investigations
- What is the Mens Rea component of tax crimes?
- What is a proffer agreement and what are the risks?
- Why to have an attorney to review a proffer agreement
- Why enter into a proffer agreement?
- Limited use immunity from proffer agreements
- Difference between civil and criminal fraud allegations
