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Examples of taxpayers that end up with criminal tax issues

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Examples of taxpayers that end up with criminal tax issues

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IRS Criminal Investigations usually lead to criminal tax convictions. Below are some recent statistics:

FY 2011 FY 2010 FY 2009
Investigations Initiated 4720 4706 4121
Prosecution Recommendations 3410 3034 2570
Information/Indictments 2998 2645 2335
Total Convictions 2350 2184 2105
Total Sentenced* 2206 2172 2229
Percent to Prison 81.7% 81.5% 81.2%

*Sentences include confinement to federal prison, halfway house, home detention, or some combination thereof. The IRS often prosecutes high profile taxpayers in order to send a message to all citizens that the IRS will prosecute tax crimes.

Below are four examples from this list with a brief summary of the offense:

California Return Preparer Sentenced for Defrauding IRS of Nearly $8 Million

  • Mario Placencia pleaded guilty to one count of submitting false documents to the IRS to validate false deductions and two counts of aiding and assisting the preparation of fraudulent tax returns.
  • He was sentenced to 60 months in prison and ordered to pay $1,213,789 in restitution to the IRS.

Former Partner at Major International Accounting Firm Sentenced for Tax Crimes

  • Stephan A. Favato was convicted of one count of aiding and assisting in the preparation and filing of false income tax returns and one count of corruptly attempting to obstruct and impede the Internal Revenue laws.
  • He was sentenced to 18 months in prison.

California Tax Preparer Sentenced for Presenting False Income Tax Returns

  • Bertha Renell Vaughn pleaded guilty to aiding and assisting in the presentation of false income tax returns.
  • She was sentenced to 30 months in prison and ordered to pay more than $1 million in restitution to the IRS.

California Tax Return Preparer Sentenced for Filing Fraudulent Tax Returns

  • Simon Jenkins pleaded guilty to preparing and filing false tax returns.
  • He was sentenced to 15 months in prison and ordered to pay $238,024 in restitution to the IRS.