Tax evasion cases can involve criminal penalties when individuals intentionally engage in fraudulent schemes to conceal their income. Criminal charges typically arise when there is clear evidence of deliberate deception and a willful disregard for tax obligations.
This is demonstrated by the recent conviction of John Everson from Liberty Center, Ohio. Everson, a former electrical engineer, was sentenced to 30 months in prison and two years of supervised release for his role in a tax evasion scheme. He concealed over $2.3 million in income from his business by directing clients to make payments to a fraudulent trust. Additionally, he attempted to hide income by funneling certain funds into non-profit entities under his control. His actions resulted in a tax loss of $658,487 to the Internal Revenue Service (IRS).
If you need assistance dealing with a tax-related legal issue, seek guidance from our Dual-Licensed Tax Lawyers & CPAs at the Tax Law Offices of David W. Klasing by dialing (800) 681-1295.
John Everson, a Liberty Center, Ohio resident, recently faced legal consequences for his involvement in a tax evasion scheme. A federal jury found him guilty of three counts of tax evasion in October of 2022. He was subsequently sentenced to a 30-month prison term by U.S. District Judge Jeffrey J. Helmick for the Northern District of Ohio. This conviction comes after it was revealed that Everson used a fraudulent trust to conceal income earned from his electrical engineering business. The following is a summary of his case.
The case against John Everson spanned several years, from approximately 2009 through 2016. During this time, Everson managed to accumulate over $2.3 million in income. To evade taxes, he employed a scheme where he directed clients to make payments to a trust under his control. This trust was used as a shield to hide his earnings from the Internal Revenue Service (IRS). Instead of paying the owed taxes, Everson utilized the concealed funds to cover personal expenses and made substantial cash withdrawals.
In an attempt to further obscure his financial activities, John Everson redirected some of the concealed funds into bank accounts held in the names of non-profit organizations. These non-profits were not genuinely charitable entities but were instead controlled by Everson and several of his family members. Even his home and airplane were registered under the name of one of these non-profit organizations, showcasing the extent of his efforts to evade taxes.
The repercussions of John Everson's tax evasion scheme are significant. The IRS suffered a total loss of $658,487 because of his actions. In addition to his prison sentence, he was also ordered to serve two years of supervised release. Furthermore, Everson is obligated to make restitution to the United States as part of his punishment.
This case serves as a stark reminder of the serious consequences individuals may face when attempting to evade taxes through fraudulent means. If you face civil or potentially criminal tax-related legal issues, seeking guidance and representation from our Dual-Licensed Tax Lawyers & CPAs is crucial. We can help navigate the complexities of the legal system and fight to avoid potential civil and criminal penalties that could apply in your case.
Tax evasion schemes can take several different forms, each involving deceptive practices used to avoid paying taxes to the government. Understanding these different schemes is crucial for individuals and businesses to remain compliant with tax laws and avoid serious legal consequences.
Underreporting income is a prevalent form of tax evasion where individuals or businesses intentionally disclose less income than they genuinely earned. This deceitful practice is designed to reduce tax liabilities and may involve tactics such as omitting cash income, inflating deductions, or concealing assets.
Offshore tax evasion entails concealing income or assets in offshore accounts or foreign jurisdictions to evade taxation. Individuals utilize these accounts to shield income from tax authorities, complicating efforts to identify and tax the hidden funds. This form of evasion can lead to substantial civil and criminal penalties when discovered. Furthermore, as of 2023, the United States is continually working on legislation that enhances its ability to track down and audit / investigate/prosecute those engaged in offshore tax evasion schemes.
Tax evasion also encompasses the submission of fraudulent deductions or credits on tax returns. Taxpayers may exaggerate expenses or claim credits to which they are not entitled, artificially diminishing their tax obligations. This type of evasion often hinges on the use of counterfeit documentation, which can result in severe criminal tax consequences.
Abusive tax shelters involve intricate financial arrangements engineered to minimize or eliminate tax liabilities. These schemes exploit loopholes in tax laws, potentially offering short-term financial gains. However, once detected, participants may face substantial fines, penalties, and potentially criminal tax prosecution
Identity theft and tax fraud entail the misuse of stolen personal information to file bogus tax returns and obtain refunds that do not rightfully belong to the taxpayer. Those involved in this form of tax evasion seek to illicitly profit from deceitful tax filings, risking criminal prosecution when caught.
Large corporations may engage in corporate tax evasion using various tactics, including manipulation of transfer pricing, offshore profit shifting, and the establishment of shell companies. These well-known strategies enable corporations to illegally reduce their tax burdens, ultimately maximizing profits. Nevertheless, such practices can trigger criminal tax prosecution of the entities and individuals involved and public scrutiny.
Employment tax evasion arises when employers incorrectly categorize workers as independent contractors or fail to withhold or remit payroll taxes. These practices often lead to substantially underreported employment taxes posing significant civil and criminal consequences and financial risks for both employers and employees and responsible parties.
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 disclosure before 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 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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