A recent Department of Justice press release revealed that a New Jersey man was recently convicted of conspiring to defraud the IRS through a scheme involving claiming refunds that he or his clients were not entitled to. The takeaway from this story is that although you may be able to achieve a tax refund in the short term, if such a refund claim is fraudulent, it is only a matter of time until the IRS will catch up and come knocking, generally with more than just a demand for the return of the refund. If you have filed your taxes inaccurately, resulting in a lower tax bill or a refund, it is in your best interest to contact an experienced tax defense attorney to discuss your options to come into tax compliance before the IRS initiates an audit or criminal investigation, or refers your case to the Department of Justice for potential criminal prosecution.
Note: As long as a taxpayer that has willfully committed tax crimes (potentially including fraudulent refund claims coupled with affirmative evasion of U.S. income tax 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!
Defendant Helped Taxpayers Seek Bogus Refunds from the IRS
According to court records, John Barry Jr. of Pemberton, New Jersey was recently convicted of conspiring to defraud the United States. Along with co-conspirators, Barry assisted in the filing of fraudulent tax returns on behalf of clients. Barry told potential clients that they could pay off their mortgage debt by obtaining tax refunds. Unbeknownst to Barry and his co-conspirator’s clients, refunds from the IRS were fraudulently claimed by representing that financial institutions had made payments to the taxpayers and had withheld substantial amounts of federal income tax, for which a refund was claimed by Barry. The defendant took a fee of between 20 and 35 percent of the refund obtained by the client. All-in-all, the IRS estimates that they paid out more than $3 million in false refunds to Barry’s clients. In addition to the refund scheme described above, Barry was also convicted of failing to file his own 2016 federal income tax return, despite earning substantial amounts of income.
When the dust settled, Barry was convicted on multiple counts of conspiracy to defraud the IRS, aiding and assisting the filing of false tax returns, obstructing the internal revenue laws, and failure to file a tax return. Sentencing is scheduled for this winter. Barry faces more than a decade in prison. Additionally, Barry will likely be ordered to serve a period of supervised release upon the completion of any physical incarceration. Lastly, Barry will likely be ordered to pay restitution to the IRS, representing the tax loss that he caused taxpayers.
Getting Ahead of an IRS Audit or Investigation
The above story illustrates the importance of filing accurate income tax returns. Although the defendant in this case helped multiple taxpayers file fraudulent returns, the IRS process for identifying and investigating potential bogus refund claims remains the same. If you have failed to file a tax return in the past or have filed a return with incorrect information in order to reduce your tax liability or to generate a refund, it is imperative that you discuss your potential exposure with an experienced tax defense attorney.
With the help of a seasoned tax lawyer, you will jointly establish the details of your case and identify the most efficient way to get right with the government. While your tax attorney works through the process of bringing you into tax compliance, you will not need to liaise with the IRS alone. Further, handing over the heavy lifting to a dual-licensed Tax Lawyer and CPA will allow you to spend time focusing on the important and much more joyful things in life.
We Are Here for You
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.
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.
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Questions and Answers for Criminal Tax Representation
- When tax defense counsel parallels tax crime investigation
- Guilty of tax obstruction by backdating documents?
- To be found guilty of tax obstruction must a person actually be successful in impeding the IRS’s functions?
- Help! The Document I Gave the IRS Had False Information
- Tax crime aiding or assisting false return IRC §7206(2)
- What is the crime known as tax obstruction § 7212?
- What is the difference between tax perjury and tax evasion?
- What is the tax crime commonly known as tax perjury?
- What is a Klein Conspiracy?
- Increased possibility of civil action in IRS investigation
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- Difference between criminal tax evasion and civil tax fraud
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- What is the willfulness requirement for tax evasion?
- I didn’t know I committed tax fraud. Can I get off?
- Concealed assets from IRS. Can I avoid tax evasion charges
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- Must the IRS prove tax crimes beyond a reasonable doubt?
- Is it a crime to make false statements to the IRS?
- Will the IRS overlook my tax evasion if it’s minor?
- Failed to tell IRS about my nominee account
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- Government says I attempted to evade my taxes. Now what?
- I forgot to pay my taxes or estimated tax. Is this a crime?
- Government proof I “willfully” failed to pay taxes
- 5 Ways to Respond to Tax Evasion Charges
- Being audited after using a tax professional
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- How the IRS selects tax crime lead for investigation
- How does the IRS prosecute suspected tax crimes?
- Does IRS reward informant leads for suspected tax crimes?
- How the government proves deficiency in a tax evasion case
- Do prior tax crimes factor into new IRS tax convictions?
- Requesting conference before investigative report is done
- Requesting conference after IRS Special Agent Report
- What are my rights during an IRS criminal investigation?
- Avoid prosecution for tax crime with voluntary disclosure?
- Defense tactics that make it hard for to prove willfulness
- How a tax attorney can stop your criminal tax case?
- What can you generally tell me about tax crimes?
- Continuing filing requirement with investigation pending
- Federal criminal code crimes that apply to tax issues
- Penalty for making, subscribing, and filing a false return
- CID special agent’s report for criminal prosecution
- What is the discovery process in a criminal tax case?
- What the IRS includes in indictment for tax case
- What is the hardest element of a tax crime to prove?
- IRS methods of gathering evidence to prove tax crime
- What does a grand jury do in IRS tax crime prosecution?
- Failure to keep records or supply information
- Failure to make a return, supply information, or pay tax
- What is attempting to evade payment of taxes?
- What is income tax evasion and how is it punished?
- What is attempted income tax evasion?
- What is the crime of failure to pay tax? What is punishment
- Crime of making or subscribing false return or document
- Criminal Investigation Division investigation tactics
- Tax crimes related to employment tax forms and trust funds
- Tactics to defend or mitigate IRS criminal tax charges
- How the IRS generates leads about suspected tax crimes
- What is the crime ”evasion of assessment” of tax?
- Specific examples of “attempting” to evade tax assessment
- What is the so-called Spies evasion doctrine?
- Does overstating deductions constitute tax evasion?
- Is it tax evasion if my W-4 contains false statements?
- IRC §7201 attempt to evade vs. common-law crime of attempt
- What are the penalties for Spies tax evasion?
- How government proves a taxpayer attempted tax fraud
- What is a tax that was “due and owing.”
- What is evasion of assessment for tax liability?
- Is evasion of assessment different from evasion of payment
- Does the IRS have a dollar threshold for tax fraud?
- What is the IRS burden of proof for tax fraud convictions?
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- What is the source of law that defines tax evasion?
- Does section 7201 create two distinct criminal offenses?
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- Do later losses justify prior deductions?
- Common reasons the IRS and DOJ start investigations
- What is the Mens Rea component of tax crimes?
- What is a proffer agreement and what are the risks?
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- Why enter into a proffer agreement?
- Limited use immunity from proffer agreements
- Difference between civil and criminal fraud allegations