As a business owner, it's crucial (and a legal requirement) to accurately report your company's financial results to the IRS. Unfortunately, not everyone follows this legal requirement. A recent case in New Jersey serves as a cautionary tale for the importance of accurate tax reporting. If you have failed to file a tax return for one or more years, or have taken a position on a business or individual tax return that could not be supported upon audit or criminal tax investigation, it is in your best interest to contact an experienced tax defense attorney to determine the best strategy to come into tax compliance without facing criminal tax prosecution.
Tiangang Zhuang, a 49-year-old man from Philadelphia, pleaded guilty to filing a false personal tax return after providing his accountants with inaccurate financial records for his companies, Pilestone Inc. and Golden Mermaid, Inc. These companies were involved in the development and sale of colorblind glasses, electronics, and cosmetics. From 2017 to 2019, Zhuang supplied his accountants with false financial records that intentionally understated the gross receipts earned by the companies. As a result, the accountants prepared corporate tax returns that underreported the income for these years.
Because the business income earned by the two companies flowed through to Zhuang's personal tax return, by providing false information to the accountants he minimized the income and tax liability reported on his personal tax return. For example, on his 2018 individual return, Zhuang reported earning approximately $163,769 in taxable income, even though he knew he received more than $660,000 that year. In total, Zhuang caused a tax loss to the IRS of approximately $219,663.
Zhuang is scheduled to be sentenced on March 14, 2023 and faces a maximum penalty of three years in prison for filing a false tax return. He also faces a period of supervised release, restitution, and monetary penalties.
This case serves as a reminder of the importance of accurately reporting your company's financial information to the IRS. If you're facing a tax audit or criminal tax investigation, it's essential to work with a law firm that specializes in tax high risk audit and criminal investigation defense. The tax and accounting professionals at the Tax Law Offices of David W. Klasing can help you navigate the complex world of tax law and ensure that you're in compliance with all relevant regulations.
At the Tax Law Offices of David W. Klasing, our team of experienced tax professionals has a deep understanding of tax law and can provide the legal guidance you need. Whether you're facing a tax audit, need help with tax planning, or are dealing with other tax-related issues, we can help.
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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