It may not be surprising to hear that people cheat on their taxes. Many U.S. citizens have attempted to save money by evading their tax obligations. However, tax evasion is a serious crime, and its perpetrators can face severe penalties.
For example, a woman in Newport News, VA was sentenced to prison and ordered to pay severe fines for tax evasion pertaining to her 2015 and 2016 income tax returns. Over $2.2 million was not properly reported. The culprit used fraudulent proceeds to fund their family home and other real estate investments.
If you are concerned about a potential issue regarding your federal income tax returns, get help seeking a resolution. Call our team of Dual Licensed Tax Attorneys and CPAs at the Tax Law Offices of David W. Klasing by dialing (800) 681-1295 or clicking here to schedule a reduce rate initial consultation online.
Woman in Newport News, VA Faces Jail Time and Fines for Tax Evasion
Nosuk Kim is a 61-year-old woman from Newport News. She was formerly a licensed attorney, substitute judge, and member of her state bar’s disciplinary committee. During her professional career, she laundered millions of dollars through her attorney-trust account and through an unspecified entity in China. The fraudulent proceeds were used to fund her family home and other real estate investments.
Despite laundering this excessive amount of taxable income, Kim failed to properly report over $2.2 million on her federal income tax returns for 2015 and 2016. As a consequence of her tax evasion, the U.S. lost over $868,924 in tax revenue.
On January 25, 2023, Kim was sentenced to 52 months of jail time for her tax crimes. Furthermore, she must pay a $200,000 fine for evading proper assessment of her 2015 and 2016 federal income tax returns.
There is no civil statute of limitations for tax fraud. There is up to a six-year statute of limitations for tax crimes. This means that the Internal Revenue Service (IRS) has an indefinite amount of time to come after you civilly for your tax crimes. For example, you could be charged with tax crimes many years after a fraudulent act was committed. If you suspect you may have improperly reported income in the past, you can contact our Dual Licensed Tax Attorneys and CPAs for help determining the appropriate next steps.
How Do People Get in Trouble for Cheating on Their Taxes?
A common way that people cheat on their taxes is by deliberately underreporting their personal or business income. Both legal and non-legal sources of income should be reported. That income should be reported even if someone has earned money through illicit activities.
Another common form of cheating on taxes involves phony deductions and credits. For example, someone may donate clothes to goodwill but severely overvalue the used goods they donated. Our Dual Licensed Tax Attorneys and CPAs can help those who have encountered issues with their tax credits and deductions.
Furthermore, citizens cheat on their taxes by failing to report tips they receive at work. Waiters, cab drivers, bartenders, caddies, and many other types of workers regularly receive gratuities. Those who receive tips at work should report them to their employers. Penalties may be imposed on people who fail to do so.
Lastly, hiding gambling winnings is another common example of how people cheat on their taxes. Winnings from casinos and other gambling institutions must be reported to the Internal Revenue Service (IRS). You can contact our law firm for help if you are worried that your gambling winnings have not been properly reported.
What is the Difference Between Negligently Filing Taxes and Tax Fraud?
Cheating on your taxes is distinctly different from negligently filing them. The Internal Revenue Service (IRS) knows that filing your taxes is a complicated process, and they expect there to be occasional errors on peoples’ tax returns. In most cases, taxpayers who submit improper filings will be given the benefit of the doubt and will not be charged with tax fraud. There will often be fines (negligence penalty) for making a mistake on your tax return, but they are significantly less severe than the criminal penalties associated with tax fraud.
Tax fraud is defined as a willful act performed with the intent to defraud the IRS. For example, you may be charged with tax fraud if you use a fake social security number or claim a dependent while living alone.
Auditors are trained to look for signs of tax fraud, also referred to as “badges of fraud.” An example of a sign of tax fraud would be a business that keeps two sets of financial records or fails to keep any records at all or deals excessively in cash to avoid creating a paper trail surrounding their business. If an auditor suspects that tax fraud has occurred, they are required to notify the IRS’s Criminal Investigation Division (CID). You will not automatically be notified if an auditor has made a criminal tax fraud referral pertaining to your tax filings.
Unfortunately, in some cases, people are wrongfully investigated and charged with tax fraud. If you believe you are at risk of being investigated and charged for tax fraud, you can call our law firm for support and guidance. Our experienced Dual Licensed Criminal Tax Defense Attorneys and CPAs can help protect your interests, net worth, and your very liberty. We have nearly a perfect record of keeping our client’s out of jail when engaged early in the tax audit process or criminal tax investigation.
How Long Do You Go to Jail for Tax Evasion?
The amount of time people go to jail for tax evasion can differ from case to case. The primary consideration when determining sentences for tax evasion is the amount of tax loss your actions caused the government. Those who cause greater tax losses will generally face lengthier sentences.
However, several other factors can play a role in establishing sentences for tax crimes. For instance, a defendant’s criminal history can play a role in determining how much prison time they will serve. Our Dual Licensed Criminal Tax Defense Attorneys and CPAs can help those who are at risk of being charged with tax evasion understand the potential consequences and keep matters civil wherever possible and thus ordinarily avoid criminal tax prosecution all together.
Our Law Firm Can Offer Help Regarding Your Tax Concerns
If you are concerned about an issue pertaining to your federal tax returns, seek assistance from our experienced Dual Licensed Tax Attorneys and CPAs at the Tax Law Offices of David W. Klasing by dialing (800) 681-1295 or clicking here to schedule a reduce rate initial consultation online.
If you have failed to file a tax return for one or more years or have taken a position on a tax return that could not be supported upon an IRS or state tax authority audit, eggshell audit, reverse eggshell audit, or criminal tax investigation, it is in your best interest to contact an experienced tax defense attorney to determine your best route back into federal or state tax compliance without facing criminal prosecution.
Note:
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- As long as a taxpayer that has
willfully committed tax crimes
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- (potentially including non-filed foreign information returns coupled with
affirmative evasion of U.S. income tax
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- on offshore income) self-reports the tax fraud (including a pattern of non-filed returns) through a
-
- or
offshore voluntary disclosure before the IRS has started an audit or criminal tax investigation / prosecution
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- , the taxpayer can ordinarily be successfully brought back into tax compliance and
receive a nearly guaranteed pass on criminal tax prosecution
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- 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
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- . Only an Attorney has the
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- and
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- 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.
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- Moreover,
only an Attorney
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- can enter you into a voluntary disclosure without engaging in the
- (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.
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- As uniquely qualified and extensively experienced
Criminal Tax Defense Tax Attorneys
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- ,
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- , 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!
More Commonly Asked Tax Audit Questions
- How should Tax Audits be Handled by Criminal Tax Counsel?
- How to survive audit when I cheated on return being audited
- What is an eggshell audit?
- What is a reverse egg shell audit?
- Why is a reverse egg shell audit dangerous for a taxpayer?
- Warning signs of a criminal referral from an IRS audit
- Effective tax defense counsels goals in an egg shell audit?
- How are the 4 goals and outcomes 1 and 2 best obtained?
- What are the possible outcomes of an egg shell audit?
- Is it my right to know why I was selected for examination?
- What can I do to prepare for an audit?
- What is an IRS civil examination?
- How IRS decides which tax returns are audited
- What are my appeal options if I disagree with IRS?
- What are my basic taxpayer rights if the IRS audits me?
- Options if I am unable to pay at the conclusion of audit
- What a 30 or 90-Day Letter from the IRS means
- What is involved with appealing disagreements?
- Rights to disagree with IRS tax auditor’s findings
- Can I stop the IRS from repeatedly auditing me?
- Can I have the examination transferred to another area?
- Can I record my IRS interview and is it a good idea?
- How many years of returns are at risk during an audit?
- Common reasons for the IRS to conduct a tax audit
- How to avoid negative consequences from an IRS interview
- Have to agree to interview by taxing authority directly?
- Are all audits the same?
- What should I do if the IRS is investigating me?
- What if I don’t respond to a taxing authority audit notice
- Your rights during an IRS tax audit
- Risks of attending an IRS audit without a tax lawyer
- Most common audit technique used by taxing authorities
- Don’t go into an IRS audit without representation
- Why hire an attorney to represent me in an audit?
- Why hire David W. Klasing to represent me in an audit
California Sales Tax Questions and Answers
- Common issues encountered during sales tax audit
- What is a sales tax audit?
- Disagreeing with business audit conclusions
- Timeline to file Petition for Redetermination?
- What should Petition for Redetermination contain?
- Is the appeals conference formal or informal?
- Appeals Division’s Decision and Recommendation
- Are a mark-up percentage and a profit margin the same?
- Problems with the mark up audit
- Can State Board of Equalization ignore my business records
- What is a sales tax deficiency determination?
- Business being audited for sales tax. Should I be worried?
- Audit determined fraud to avoid sales and use tax
- Definition of “sale” for California Sales Tax
- What do California sellers need to know about sales tax?
- How do I apply for a sellers permit?
- What are my obligations as a permit holder?
- What is sales tax?
- What is tangible personal property?
- What is a sale?
- What are total gross receipts?
- What is use tax?
- Who is responsible for paying the use tax?
- Who is a retailer engaged in business in California?
- Who is a qualified purchaser?
- Do I need a Certificate of Registration Use tax?
- Do I need a Use Tax Direct Payment Permit?
- What types of sales are exempt from sales tax?
- How are Internet Transactions Taxed?
- How is California sales or use tax determined?
- What is the statewide sales and use tax rate?
- Are there other local and district sales and use taxes?
- Total sales and use tax rate calculation
- How to protect against successor liability in California
- Recourse when issued California sales tax liability notice
- CA Sales Tax liability extend to purchasers/successors?
- Waiting Until Audited to Take Action on Tax Matters
- Sales tax records needed in California
- What are California’s sales and use taxes?
- Why does the State of California audit businesses to ensure compliance with sales and use taxes? How does the State determine whether to audit my business?
- The BOE reviews the purchase invoices of my business
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
- Am I Guilty of Tax Evasion if the Law is Vague?
- What happens if the IRS thinks I committed tax crimes?
- What are ways to defend against a tax evasion charge?
- Difference between criminal tax evasion and civil tax fraud
- What accounting method does the IRS use for tax fraud
- Can I Change Accounting Method to the Accrual Method
- 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
- How government proves I willfully engaged in tax evasion
- What is the venue or court where a tax crime case is heard?
- 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
- Audit risk with cash based business transactions
- How to defend a client charged with tax evasion
- Is it tax evasion if I didn’t file income tax return?
- 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
- Rules for what an IRS agent can do while investigating me
- How tax preparers, attorneys and accountants are punished
- 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?
- Are Tax Laws Constitutional?
- What is the source of law that defines tax evasion?
- Does section 7201 create two distinct criminal offenses?
- Does tax evasion definition include partnership LLC
- What if I helped someone else evade taxes?
- Is it illegal to overstate deductions on my tax return?
- Is it illegal to conceal bank accounts from the IRS?
- 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?
- Why to have an attorney to review a proffer agreement
- Why enter into a proffer agreement?
- Limited use immunity from proffer agreements
- Difference between civil and criminal fraud allegation
