According to a Department of Justice press release, a Montana chiropractor and his wife recently pleaded guilty to tax evasion after the couple failed to report hundreds of thousands of dollars of business income on their annual tax returns. This story provides a clear example of the potential repercussions that taxpayers who cheat on their taxes can face. If you have failed to file a tax return for one or more years or have taken a position on a tax return that could not be supported upon an IRS or state tax audit or criminal tax investigation, it is in your best interest to contact an experienced tax defense attorney to discuss your options to come into compliance.
Court records indicate that Jonathan Wilhelm, owned and operated Pro Chiropractic PC and Big Sky Spinal Care Center Inc., serving patients in Montana. Between tax years 2013 and 2018, Wilhelm and his wife instructed their patients to make payments in cash or by check directed to cash. Payments made in this manner were not reported on the books and records of the business that were provided to a local tax preparer.
As a part of their guilty plea, the Wilhelms admitted that by skimming business income and artificially lowering their revenues for the purposes of compiling their business books and records that they would be causing the illegal omission of over $284,000 and causing a tax loss to the government of more than $74,000. Sentencing has been scheduled for early next year. Both Jonathan Wilhelm and his wife face five years in federal prison. Additionally, they will likely be ordered to serve a term of supervised release and be ordered to pay restitution to the IRS.
The story above proves out the concept that the IRS does not only go after those who cheated the government out of millions of dollars. The Wilhelms’ tax bill for the money that they failed to report was under $75,000, bolstering the reality that criminal tax consequences can result from tax fraud and evasion, regardless of the amount in controversy. All it takes is $30,000 under the federal sentencing guidelines to do a year and a day in federal prison.
Business owners often find themselves the targets of IRS and state tax audits. Although this is for a variety of reasons, a major driver for the increased audit activity relates to the abundance of fraud in the areas of business income and deduction reporting. It is relatively easy for a business to report less income than they earned and likewise report business deductions for expenses that they simply did not incur. It is critical that business-owning and operating taxpayers consider their heightened risk for examination.
If you have failed to file a tax return in the past or have taken a position on a tax return that could not be sustained upon examination, such as artificially reducing income or over-inflating deductions, getting right with the government sooner rather than later should be a priority. Working with an experienced tax defense attorney, you can choose the method of coming into compliance that makes sense for you. One of the biggest benefits of tax attorney representation is that you will never have to go up against the IRS or state taxing authority 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!
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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