In recent tax law news, a Twin Cities resident and company executive found himself facing charges of tax evasion, causing an alleged total federal tax loss of over $6 million. He plans to plead guilty as part of a deal with prosecutors and awaits potential sentencing of up to five years in prison, along with restitution payments.
The defendant’s issues started over a decade ago when he agreed to make payments on his tax balance but allegedly concealed income fraudulently to escape the paying taxes he admittedly owed. A Dual Licensed Tax Attorney and CPA can help by negotiating a reasonable plan with the federal government and finding ways to deal with those payments that don’t constitute a federal tax crime.
To find out more about the services offered by the Dual Licensed Tax Relief and Resolution Tax Lawyers and CPAs at the Tax Law Offices of David W. Klasing, reach out to us today to schedule a reduced rate consultation at (800) 681-1295 or schedule online here.
The CEO of a medical device company located in the Twin Cities area was charged with tax evasion last month in U.S. District Court in Minneapolis. The IRS alleges that the defendant, Larry W. Lindberg, 68, failed to pay the IRS hundreds of thousands of dollars in payroll taxes each quarter, resulting in a total tax loss of over $6 million.
Lindberg is a former pharmacist and owner and CEO of Midwest Medical Holdings, a medical device firm located in Mounds View. However, according to board records, Lindberg had his pharmaceutical license revoked by the state’s Pharmacy Board over unrelated matters, including allegations of unsanitary work conditions.
Midwest Medical Holdings is still in operation and employs over 200 workers but is in the process of searching for new leadership.
According to the charging document, Lindberg had previously racked up a substantial tax debt and, in 2011, entered into multiple separate agreements with the federal government where he would provide payment to the IRS through periodic installments. However, the defendant allegedly failed to make the promised payments and would ultimately default on each installment agreement.
To avoid paying down his tax obligation, the defendant allegedly diverted the money he should have been using to other business entities within his control, which he then spent on real estate, personal vacations and travel, and other personal expenses.
To further the evasive tactics, the government alleges that the defendant placed real estate holdings and other assets in the names of limited liability companies (LLCs) that were controlled in name by third parties. According to the charging documents, this effort was meant to disguise Lindberg’s ownership and control of the property.
In total, the government estimates that Lindberg’s total tax debt owed to the IRS is over $4.4 million. Combined with additional penalties and interest, the total value that prosecutors claim Lindberg owes is just over $6 million.
The defendant was formally charged in U.S. District Court for the District of Minnesota with one count of tax evasion. Federal tax evasion carries a potential sentence of up to five years in prison, combined with any fines and restitution that the court may additionally order. According to statements made by Lindberg’s attorney shortly after the charges were filed, statutory guidelines would suggest a prison sentence in the range of two years and four months to two years and nine months.
Lindberg’s attorney also indicated that his client had agreed on the terms of an agreement with prosecutors and intends to plead guilty at his upcoming hearing. “Larry felt bad about it,” said attorney Tom Brever. “He knew he screwed up … He knew he had to make peace.”
The proposed agreement also apparently stipulates that Lindberg would be required to pay back the more than $6 million in debt that he is said to owe the IRS.
While Lindberg may have committed crimes and deceived the IRS, his story is an example of an unfortunate and all-too-common situation that many taxpayers face every year. Taxpayers who owe a large balance of tax debt may find themselves unable to pay off the debt by the required deadline, like Lindberg did in 2011.
If you find yourself in this situation, there are several steps that you should– and should not– take that can help you get through your difficulties without making the situation worse or forcing you to make payments that compromise your way of life.
By recognizing your situation early, you can go to the IRS ahead of time to work out a way to pay off your debt over time. This also saves the IRS the time and cost of tracking you down and potentially prosecuting you. In exchange, the government may treat you more favorably when assessing the balance you owe and any additional penalties that might apply.
But taking on a payment plan that you cannot handle will only make matters worse. This makes it important that you use the advice of your Dual Licensed Relief & Resolution Tax Lawyer and CPA throughout the negotiations process.
You should also not attempt to conceal income to avoid meeting the obligations you agreed to. There are always better options than committing additional tax offenses. This costly mistake is how Lindberg’s case turned from a cash flow problem to a jail time problem. We can help you strategize opportunities that can make short-term compliance easier and help you implement effective (and legal) tax avoidance strategies that can benefit you down the road.