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New York Businessman Sentenced to Federal Prison for Tax Crimes

Virginia Tax Professional Pleads Guilty to Tax Evasion
April 27, 2021
Denver Business Owner Indicted on Multiple Tax Counts
April 29, 2021

New York Businessman Sentenced to Federal Prison for Tax Crimes

 

A Department of Justice press release revealed that the owner of a New York business was sentenced to serve 19 months in federal prison after previously pleading guilty to conspiracy to defraud the IRS, tax evasion, and failure to pay over payroll taxes. This story should serve as a warning to business owners that structuring your tax affairs in a way that is not permitted under the nation’s tax laws can result in life-altering consequences. If you have failed to file a tax return for one or more years, or have taken a position on a filed 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 contact an experienced tax defense attorney.

Defendant Used Cashed Business Checks for Personal Expenses

According to court records, Bilal Salaj owned a construction business. In 2014, Salaj purported to operate a new business under new ownership, although he remained in control of the business for all intents and purposes. Between July 2014 and 2019, Salaj and an unnamed individual used check cashing facilities to cash business checks to avoid reporting the income on the books and records of the business. The pair used the cash to pay the company’s employees, with the remainder of the cash being used to pay for personal expenses.

Salaj was legally responsible for the withholding, accounting, and paying over of withheld employment taxes. In addition to failing to comply with his employment tax obligations, Salaj failed to include the cash he used to pay for his personal expenses as income on his individual income tax returns. In the filing of the company’s business tax returns, Salaj provided false information to tax professionals tasked with annual tax compliance. The IRS and Department of Justice estimate that Salaj’s illegal activity resulted in a tax loss of $952,778.

In addition to being sentenced to more than a year and a half in federal prison, Salaj was sentenced to serve three years of supervised release to commence upon the physical incarceration ordered by the judge. Lastly, Salaj was ordered to pay $952,778 in restitution to the IRS.

Coming into Compliance Before the IRS Initiates Contact

Both employment taxes and individual income tax compliance is at the top of the IRS’ list of enforcement priorities. Over the past year, the IRS has dramatically increased its staff of agents focused on administering examinations on both individuals and businesses. With many government programs being utilized to provide support in the wake of the COVID-19 pandemic, the IRS is under tremendous pressure to collect as much revenue as possible.

If you have failed to file a tax return for one or more years, or have filed a tax return that is false, you should consult with an experienced tax defense attorney to identify potential exposures and develop a strategy to address them. When working with a seasoned tax lawyer, you will never have to go up against the IRS alone. In a time of great uncertainty, one this is always true: addressing tax noncompliance before the IRS initiates contact will yield numerous benefits.

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!

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