In April, the government announced that they had secured a criminal information against a Cogan Station small business owner for an alleged tax evasion scheme that lasted for nearly five years. If found guilty, the defendant faces up to five years imprisonment on top of any ordered fines or restitution.
A criminal information is what the government prosecutors may use when they choose to initiate a criminal tax evasion case against a defendant without having to go through a grand jury first. This allows the government to act quickly, resulting in taxpayers being caught off-guard by allegations.
To avoid being blindsided by IRS action against you or your small business, you can act today to enlist the help of the Dual Licensed Tax Lawyers and CPAs at the Tax Law Offices of David W. Klasing. Call us at (800) 681-1295 to find out more about how our wide range of services could benefit you or schedule a reduced rate initial consultation online HERE.
Through a Department of Justice press release, the U.S. Attorney’s Office for the Middle District of Pennsylvania announced on April 20 that Devon Buck of Cogan Station, Pennsylvania had been charged in a criminal information with one count of tax evasion. The criminal information alleges that Buck, 33, made special arrangements with his small business’ clients that would aid him in underreporting the business’ gross receipts.
Buck owned and operated a landscaping business known as DCL Landscaping. Between the calendar years of 2015 and 2019, Buck prepared and delivered business invoices to clients of DCL Landscaping which requested that the clients make payments out to Buck individually rather than DCL and asked that they not include DCL’s name in any field of the check.
During the period at concern, Buck cashed more than $660,000 in client checks, while only depositing roughly $240,000 in payments into the company bank account. According to allegations, Buck then provided fraudulently created business statements and documentation to his tax preparer for use in filling out IRS Form 1040 income tax return filings and Schedule C statements of business receipts and expenses. This resulted in the underreporting of the business’s taxable income, which prosecutors estimate to amount to just over $200,000 in unpaid taxes.
Buck has not entered a plea at this time. If he is found guilty, Buck faces a potential sentence of up to five years in prison with a period of supervised release, plus the possibility of additional fines and restitution.
According to the Department of Justice’s announcement, Buck faces charges through a criminal information. An information functions similarly to an indictment, but there are critical differences between the two that all taxpayers should be aware of if they ever find themselves in such an unfortunate situation.
To secure a federal criminal indictment, the prosecutor must present their case to a grand jury, who investigates the allegations and determines whether the charges should be filed. If the grand jury finds that the prosecution has sufficient evidence to proceed with the charges, they then issue an indictment, which is the first step in a criminal prosecution. The requirement that prosecutors obtain an indictment comes from the 5th Amendment and is designed to protect against overly aggressive prosecutors initiating proceedings without a requisite amount of evidence to substantiate their claims.
However, an information also serves the purpose of beginning a criminal prosecution. The critical difference between an information and an indictment is that an information is not issued by a grand jury, but rather by a judicial officer, normally a magistrate judge, who makes a similar determination to what is required of a grand jury for an indictment. This allows the process of obtaining an indictment against a criminal defendant to become much faster. This can be useful to the government if they are looking to make an arrest or question a target as soon as possible.
Most federal white-collar crimes require the prosecutor to obtain an indictment, not an information, to proceed with charges. However, there are some types of federal criminal allegations where an information will suffice. Tax evasion allegations are one example of a felony that can be charged with an information.
Therefore, a prosecutor does not need to get approval from a grand jury to initiate a criminal case against a suspected tax evader. This should concern even the most honest taxpayers, as criminal tax information frequently leads to arrests.
It is unnaturally easy for the government to initiate a criminal investigation or court case against a taxpaying individual, even if they have not actually done anything wrong or have made honest mistakes in their past filings. While you may ultimately defeat the charges, the allegations themselves can cost you a substantial amount in time, money, and personal reputation. Therefore, it is best to get out in front of these potential consequences.
The opportunity to do so does not last long, so it is always in your best interest to reach out to one of our Dual Licensed Tax Attorneys and CPAs. The circumspect approach to tax issues that we provide can not only identify holes in your past reporting, but also provide solutions that will keep you out of a court room or a jail cell. Everyone’s situation is different, so you will want a specified assessment of your own tax standing to help you build your defenses and implement effective tax strategies.
You can help yourself both personally and financially when you take the first step of contacting the Dual Licensed Tax Lawyers and CPAs at the Tax Law Offices of David W. Klasing as soon as possible. You can reach us right now by calling our offices at (800) 681-1295.
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!