According to a Department of Justice press release, a tax professional from North Carolina that had recently pleaded guilty to engaging in tax crimes was sentenced to serve more than four years in federal prison. This story should remind taxpayers that the potential consequences of engaging in criminal tax activity is severe. 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 demand from the IRS in an audit, egg shell audit or reverse egg shell audit, you should strongly consider seeking the guidance of an experienced criminal tax defense attorney on a strategy to come into tax compliance.
We brought our readers the story of Adrienne Williams, a North Carolina tax return preparer, last year. As you may recall from our previous blog post, Williams owned and operated Ultimate Tax Service, a tax return business in Rocky Mount, North Carolina. As a part of her 2020 guilty plea, Williams admitted that she taught her employees how to break tax laws, including how to file falsified tax returns. Specifically, Williams instructed her employees to claim false federal tax withholdings that in many cases, generated unlawful refunds. The IRS estimates that Williams’ business requested more than $3.5 million in fraudulent tax refunds.
At her recent sentencing hearing, Williams was sentenced to serve 50 months in federal prison. Additionally, she was sentenced to three years of supervised release upon the completion of her physical incarceration. Lastly, Williams was ordered to pay over $4.8 million in restitution to the IRS to make up for the tax loss that she caused.
The defendant in the case detailed above assisted her employees and clients cheat on their tax returns. But that does not mean that only wayward tax preparers can go to prison for violating U.S. or state tax laws. To the contrary, the vast majority of those investigated and prosecuted for tax-related offenses are ordinary taxpayers and the criminal investigation division of the IRS has a 90% + conviction ratio. Although feelings of uncertainty, dread, guilt and confliction abound among individuals and businesses who have purposefully not complied with tax laws, one thing is certain: the negative effects of the stress surrounding potentially life-changing consequences of being caught red handed cheating on your taxes in and audit, eggshell audit or reverse eggshell audit are not worth the financial benefit of continued noncompliance.
If you have understated items of income, overstated items of deduction (especially where personnel in nature) or claimed credits for which you were not entitled on your filed tax return, the IRS will search for evidence that you knew or should have known that such discrepancies were intentionally false. Likewise, if the IRS proves that you knowingly failed to file a tax return, a criminal tax investigation or even felony prosecution for Spies Evasion could easily result. If either of these situations apply to you or to your business, it is in your best interest to contact an experienced dually licensed Criminal Tax Defense Attorney & CPA to determine the next steps to bring you into tax compliance.
A seasoned tax lawyer will work with you to develop a strategy to correct past tax omissions or misrepresentations. After developing such a strategy, you will be fully represented in any interaction with the IRS or other government agency. Thus, from the filing of any required documentation, including amended tax returns, all the way through meetings with the IRS, you will never have to go up against the government alone.
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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