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Michigan Man Pleads Guilty to Filing False Tax Returns and Bank Fraud  

According to a Department of Justice press release, a Michigan businessman recently pleaded guilty to charges related to filing a false tax return and bank fraud. This story highlights the importance of filing tax returns that accurately reflect a taxpayer’s financial conditions. Although lying on a tax return may seem like a harmless crime, there are thousands of Americans currently sitting in a federal prison who likely thought the same thing. Coming into compliance with the assistance of an experienced tax defense attorney will likely provide the best chance at getting right with the government while minimizing some of the negative consequences that come along with prior tax noncompliance.

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Businessman Stole Funds from Carferry Business and Falsified Tax Return

Court documents reveal that Paul Patrick Piper, 58, of Ludington, Michigan, served as the controller of Lake Michigan Carferry for many years. The company provided car ferries between Michigan and Wisconsin. Federal investigators determined that Piper had used his position as Controller to defraud Lake Michigan Carferry and various financial institutions by overriding accounting systems and self-dealing with his own tax and accounting groups.

Investigators discovered that Piper forged signatures on checks written directly to his companies for work not performed. Subsequently, Piper hid those transactions by classifying the expense as an insurance expense. Finally, Piper failed to report the income earned by his businesses, including the money that he embezzled from Lake Michigan Carferry, on his personal federal income tax return.

Federal investigators estimate that Piper stole between $550,000 and $3.5 million from Lake Michigan Carferry and failed to pay more than $363,000 of income taxes. Piper’s sentencing has been scheduled for late summer. The defendant faces up to 30 years in prison on the bank fraud count and up to three years in prison for filing a false tax return. Piper will also likely be ordered to pay restitution to Lake Michigan Carferry and serve a period of supervised release.

Failing to Include Income on Your Tax Return Could Land You in Hot Water

Although many taxpayers believe that their tax return will not be reviewed by the IRS and use that misconception as a justification to omit business, wage, or other income, many taxpayers who do so have found themselves in hot water with the government. Upon filing a tax return, a complex set of computer systems at the IRS use all of the information at the government’s disposal to analyze your reported income and deductions. If any badges of fraud are found, the return is forwarded on for further review. Needless to say, the implementation of advanced data analytics has allowed the IRS to become very efficient in their fight against tax fraud and evasion.

Even though the IRS has improved their internal processes to catch those cheating on their taxes, there is still hope for taxpayers who are looking to come into compliance. There are a myriad of methods to getting right with the government. Especially now when the IRS has announced that during the COVID-19 pandemic, they have slowed the initiation of new audits. Working with your experienced tax defense attorney, you can determine the best strategy to come into compliance and execute on that strategy. Attempting to comply with the tax laws generally yields a better result than waiting for the government to come and find you.

Note:  As long as a taxpayer that has willfully committed tax crimes (potentially including non-filed returns coupled with affirmative evasion of payment) self-reports the tax fraud (including a pattern of non-filed returns) through a domestic or offshore voluntary disclosure before 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, Kovel CPAs 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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We Are Here for You

Regardless of your particular 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.