According to a Department of Justice press release, a New Jersey man was recently indicted on criminal tax charges after allegedly evading his tax obligations and failing to file a tax return for multiple years. As we approach the filing deadline for 2020 taxes, it is crucial to appreciate the potential risk associated with attempting to evade the reporting and payment of federal and state income taxes. If you have failed to file a tax return for one or more tax years or have taken a position on a tax return that could not be supported upon an audit, eggshell audit, reverse egg shell audit or criminal tax investigation, it is in your best interest to consult with an experienced tax defense attorney to determine the best strategy to come into tax compliance.
Court records reveal that Jonathan Michael worked for a New Jersey company that was chiefly engaged in operating a local port. Federal prosecutors allege that between 2014 and 2018, Michael, through the filing of an IRS Form W-4, claimed that he was exempt from federal tax. As a result, no federal taxes were withheld from Michael’s paychecks. Additionally, prosecutors and the IRS allege that Michael failed to file an individual tax return for years 2014 through 2018. The IRS estimates that Michael earned more than $1.6 million in wages during the five-year period in question.
If Michael is convicted, he faces up to five years in federal prison for the single count of tax evasion. Additionally, he could be sentenced up to one year in prison for each of the five failure to file counts that he faces. If convicted on any of the charges, Michael faces an additional period of supervised release and could be ordered to pay restitution to the IRS, representing the tax loss caused by the defendant.
The IRS has made it known over the past year that they have increased their headcount to ramp up examination activity. For taxpayers, this means that any tax exposures should be identified and addressed before the IRS initiates any inquiries. For taxpayers who have failed to file a tax return for one or more years, or have filed a tax return containing false information, an experienced tax defense attorney will serve as your most effective ally.
Working together with your seasoned tax lawyer, you will identify tax exposures and the potential impact of any associated civil or criminal liability. You will then jointly determine the best course of action to resolve or minimize the identified exposure, all while keeping your physical and financial freedom top of mind.
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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