According to a Department of Justice press release, a North Carolina businessman recently pleaded guilty to filing a false income tax return after severely under-reporting his business’s income. This story should remind taxpayers, whether they own a business or not, that filing a tax return with under-reported income can result in severe civil and criminal tax consequences. If you have failed to file a tax return for one or more years, or have filed a tax return that has understated the amount of income that you earned or overstated the deductions you are properly entitled to, it is in your best interest to contact an experienced tax defense attorney to determine the best method to come back into tax compliance.
Defendant Admitted to Under-Reporting Income
Court records reveal that Steve Sloan, a North Carolina resident, was the owner and operator of Total Lawn and Landscape Pros LLC. Between 2014 and 2018, federal prosecutors alleged that tax returns filed by Sloan had severely under-reported the business profits of Total Lawn. Prosecutors indicated that in 2017, for example, Sloan’s business tax return reported gross receipts of less than $200,000. In actuality, prosecutors had evidence to support that gross receipts exceeded $450,000 for that year. All told, the IRS estimated that Sloan’s illegal activity caused a tax loss of more than $315,000.
Sloan will be sentenced on June 21st, 2022. He faces a maximum of three years in federal prison. In addition, Sloan may be sentenced to serve a period of supervised release to commence upon the completion of any physical incarceration. Lastly, Sloan may be ordered to pay restitution to the IRS, representing the amount of tax loss that he caused.
Any Taxpayer Can Find Themselves on the Wrong End of a Criminal Tax Prosecution
In many of the stories that we bring to you, the defendants highlighted are involved in multi-million-dollar tax schemes. On the other hand, there are a large number of taxpayers who are prosecuted by the Department of Justice for tax-related offenses who are not high-profile defendants. Thus, it is important to recognize that tax offenses, regardless of the amount at issue, can and will be investigated by the IRS and could be prosecuted by the Department of Justice. New and improving technology employed by the Service helps Revenue Agents identify potential tax crimes. Such cases will be scrutinized and referred to the Department of Justice, if necessary.
If you have failed to file a tax return for one or more years, or have filed a tax return that contains knowingly false information, you should contact an experienced tax defense lawyer as soon as possible to determine the best strategy to get you right with the government. Together, you will first work to identify the critical facts and circumstances of your case. Then, you will jointly decide on a route to bring you back into compliance that keeps both your physical and financial freedom top of mind.
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: 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!
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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