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New Mexico Man Indicted Over Alleged 10- Year Tax Fraud Scheme

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    On this blog we frequently discuss the importance of adhering to all tax obligations including filing one’s income tax returns every year where an obligation exists to do so. Since the income threshold that one can earn before a filing obligation exists is so low, most people living and working in the United States have an obligation to file income taxes. Furthermore, we also routinely emphasize the importance of making comprehensive and accurate reports regarding one’s taxes. While many people seem to believe that the IRS is unable or uninterested in verifying this information, this is not true. The IRS engages in a number of practices and procedures, including information-matching and form-matching, to identify taxpayers who make incomplete filings, inaccurate filings, or fail to file their tax return.

    Unfortunately, taxpayers who shirk their duties and obligations are only kicking the can down the road for a year, two, or maybe three. However in some instances, such as in this indictment, taxpayers may be able to escape notice for longer periods of time. However, these taxpayers are detected in time and when they face an audit and enforcement actions they often face life changing civil fines and criminal penalties due to their years of noncompliance.

    How Did the Tax Fraud Scheme Function?

    On November 2, 2015, Darryl J. Gutierrez, 60, of Santa Fe, New Mexico was arrested for his alleged role in a decade-long tax fraud scheme. He was arraigned on December 3rd on an 11 count indictment which charges that Gutierrez engaged in one count of tax fraud and 10 counts of filing materially false tax returns. These are serious charges carrying consequences that include federal prison time and significant fines and penalties.  Gutierrez has entered a “not guilty” plea on all charges that he faces.

    According to allegations advanced by federal prosecutors for the Department of Justice (DOJ), Gutierrez fraudulently claimed eligibility for a tax refund for the tax years from 2000 to 2009. According to prosecutors, Gutierrez was not entitled to receive any refunds during this years but requested and received more than $170,000 in fraudulent tax refunds. In fact, prosecutors charge that over the period  Gutierrez actually owed more than $125,000 in unpaid income taxes currently due and owing. Prosecutor’s state that the alleged fraudulent refunds along with the unpaid taxes brings the total amounts owed to just under $300,000 though that number does not include fines or additional interest.

    What Tax Charges and Penalties Does he Face?

    Gutierrez faces charges under two separate statutes. First, he faces a single charge under 26 U.S. Code § 7201 – Attempt to evade or defeat tax. The statute holds that it is illegal for any person to “willfully attempts in any manner to evade or defeat any tax imposed by this title or the payment thereof.” Individuals who attempt to commit tax fraud by intentionally or voluntarily endeavoring to defeat its imposition or payment can face felony-level consequences. Any individual charged with violating 26 U.S. Code § 7201 can face a fine of up to $100,000 ($500,000 if a corporation), responsibility for the costs of prosecution, and up to five years in federal prison.

    Gutierrez is also charged with multiple counts of violating 26 U.S. Code § 7206 – Fraud and false statements. While this crime can be charged in a number of circumstances, one application is when a taxpayer, “Willfully makes and subscribes any return, statement, or other document, which contains or is verified by a written declaration that it is made under the penalties of perjury, and which he does not believe to be true and correct as to every material matter.”  In other words, taxpayers who submit official tax documents containing information that he or she knows to be false have committed a tax crime and are subject to fines and penalties including up to three years in federal prison.

    If convicted Gutierrez could face an extremely lengthy prison sentence. For the first charge he could face up to five years in prison. For the ten subsequent charges Gutierrez could face up to three years in prison on each count. If convicted on all 10 counts under § 7206, he could face 30 years in prison. In all, Gutierrez faces a potential 36 year federal prison sentence for his alleged acts of tax fraud.

    Facing Criminal Tax Allegations?

    If you are facing criminal tax charges, penalties can be particularly harsh. If the fraud continued for a number of years, you may find yourself in a similar situation as Mr. Gutierrez who facing multiple criminal tax charges that, if convicted, could result in up to 36 years in prison. The experienced tax professionals of the Tax Law Offices of David W. Klasing can fight to protect you from the imposition of a lengthy prison sentence and other serious consequences. To schedule a reduced-rate consultation with an experienced tax professional call 800-681-1295 or contact us online.

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