Most of us have paid for a good or service by check. Some of us may have been asked by the merchant or service provider to make the check payable to a certain entity or person. We typically oblige as we assume that the business bank account is in that name. But some business owners take advantage of a purchasers’ willingness to cut a check to a particular person or entity name and make the request with the intent to evade taxes.
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Drywall Business Sought Checks in Fictitious Names, Owner Indicted
According to a Department of Justice press release, Walter Rodriguez of Manchester, New Hampshire, was charged with three counts of filing false tax returns by a federal grand jury.
Prosecutors allege that between tax years 2011 and 2013, Rodriguez was the owner and operator of Walter Rodriguez Drywall and Finish. The company serviced the Manchester, New Hampshire area and also did work for construction companies in New York and Massachusetts. When Rodriguez’s company completed a job, the construction company that employed him would typically issue a Form 1099 and send a copy of such Form 1099 to the IRS, as required by law.
The grand jury indictment charged that Rodriguez requested, and the construction companies agreed, to have checks written and Forms 1099 issued to fictitious business names. According to prosecutors, this was in an attempt to conceal income. Rodriguez allegedly cashed the checks at local check-cashing businesses around New York and New Hampshire. Note: the IRS has been known to audit or randomly subpoena check cashing business records for just this reason.
When it came time for Rodriguez to file annual tax returns, he failed to accurately report the total gross receipts of his business. Rodriguez is alleged to have, unsurprisingly, omitted the income that was from checks not written to his company’s correct name.
Rodriguez faces three years in a federal prison for each count of filing a false tax return. Additionally, Rodriguez will likely be sentenced to serve a period of supervised release after his stint in federal prison. Lastly, Rodriguez is expected to be ordered to pay restitution to the IRS for the taxes that he failed to pay in prior years.
When to Contact an Experienced Tax Defense Attorney
Requesting customers to pay you with checks written out to a fictitious person or entity with the intent to evade the payment of federal income taxes is illegal and the IRS will seek the assistance of the Department of Justice to pursue federal criminal charges for those who get caught engaged in such conduct. If you believe that prior or current business practices are causing total income to be fraudulently reduced, you should contact an experienced tax defense attorney to determine your exposure and establish your options. In general, those who voluntarily disclose their previous fraudulent tax compliance issues through appropriate IRS defense counsel prior to the IRS identifying the issue have an excellent chance at mitigating (avoiding) the potential criminal tax consequences, of their prior fraudulent actions.
Contact an Experienced Criminal Tax Defense Attorney Today
The tax and accounting professionals at the Tax Law Offices of David W. Klasing have extensive experience representing taxpayers from all walks of life. Whether you are a business owner facing a sales and use tax audit or you have received notice that your individual return is being examined, our team of zealous advocates are standing by to help you develop a sound legal strategy that will keep your personal and financial interests at the forefront of importance. Do not lose sleep over the possibility of tax evasion or other tax-related charges from the IRS or state taxing authorities. Contact the Tax Law Offices of David W. Klasing today for a reduced-rate consultation.
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