Earlier this month, the Newark office of the IRS Criminal Investigation Division (IRS-CI) announced the guilty plea of defendant Patrick Franconeri, 57, who confessed to failing to report more than $1.3 million in income in 2014, thereby illegally avoiding a tax liability of over $558,000. Franconeri, who owned several construction companies in New Jersey, also admitted to utilizing check-cashing services to disguise and conceal his transactions. In addition to committing a felony tax crime, Franconeri engaged in bankruptcy fraud, concealing substantial assets from court officials while his Chapter 7 case was in progress. If you have unreported income, you are advised to contact an unfiled tax return lawyer immediately. It may still be possible to limit your criminal tax exposure or reduce the civil penalties you face, but only if you are proactive and quick-moving.
Defendant Admits Failing to File Tax Returns, Concealing Assets from Bankruptcy Court
Franconeri’s taxable income for 2014 totaled approximately $1,362,950. However, none of this income was reported to the IRS, as Franconeri failed to file a tax return that year. Because Franconeri failed to file a return, the IRS was unable to calculate a tax assessment, causing a tax loss of $558,439 in unpaid income taxes. This willful failure to file a return and pay taxes led to Franconeri’s plea of guilty to tax evasion.
In addition to willfully failing to file a return or report and pay taxes on his income for 2014, Franconeri also participated in bankruptcy fraud after filing for Chapter 7 in 2010. When an individual files for Chapter 7 bankruptcy, he or she is required to disclose financial assets to a court-appointed bankruptcy trustee, so that the assets may be disbursed among the debtor’s creditors. In some cases, debtors attempt to undervalue or conceal these assets in order to avoid losing them to creditors. This constitutes bankruptcy fraud and can lead not only to dismissal of the bankruptcy case, but furthermore, serious criminal charges.
You may have noticed several references to Franconeri’s willfulness. Willfulness, or the state of acting intentionally, is a crucial component of criminal tax charges, which generally require prosecutors to show that alleged tax offenders acted knowingly and intentionally. Unfortunately, even sincere tax errors can be misinterpreted as “willful” by overzealous or inexperienced investigators, making aggressive legal representation essential. If a tax mistake was accidental rather than “willful,” the taxpayer may still face costly fines, but no prison time. However, proving non-willfulness is a complex process demanding careful strategy, with the IRS providing scant guidance on the term “non-willful.” It is in your best interests to be represented by a seasoned tax defense attorney if you are facing tax fraud charges, an IRS investigation, or tax fraud penalties of any kind.
As of June, Franconeri has been scheduled for sentencing on September 16, 2019. At sentencing, he may face years of prison time and supervised release, in addition to fines and IRS restitution. Each offense charged in Franconeri’s case is punishable by up to five years in prison. These maximum five-year sentences are established by the federal statutes for tax evasion (26 U.S. Code § 7201) and bankruptcy fraud (18 U.S. Code § 157).
Tax Evasion Defense Attorneys Serving Northern and Southern California
Addressing Franconeri’s case, John R. Tafur, Special Agent in Charge for the Newark field office of IRS-CI, stated, “Fraud and dishonesty in bankruptcy court undermines the integrity of these important proceedings. Intentionally concealing assets, failing to accurately report income and failing to file tax returns is criminal activity,” he warned, “that will not be tolerated.” For proof, one need only look at federal statistics on tax-related convictions and sentencing.
If you have unfiled income tax returns, undisclosed offshore assets or accounts, or unreported domestic assets or income (including cryptocurrency), you are at risk for major civil and/or criminal penalties. Take action now by consulting with a tax evasion defense attorney. At the Tax Law Office of David W. Klasing, we are tax evasion defense lawyers with extensive experience representing individuals and entities in federal tax audits, felony tax evasion cases, and civil tax disputes with the IRS. We are here to help you strategize effectively and avoid self-incrimination, fighting your penalties and negotiating with the IRS on your behalf. Contact us online right away to arrange a reduced-rate tax consultation, or call the Tax Law Office of David W. Klasing at (800) 681-1295 to speak with an experienced attorney-CPA today.
Also, we’ve expanded our offices! In addition to our offices in Irvine and Los Angeles, the Tax Law Offices of David W. Klasing now have offices San Bernardino, Santa Barbara, Panorama City, Oxnard, San Diego, Bakersfield, San Jose, San Francisco, Oakland and Sacramento.
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Questions and Answers on Unfiled Back Taxes
- What are the common issues that non-filers face?
- Risk of audit after filing delinquent prior year returns
- Can substitute return deficiency be discharge in bankruptcy
- Substitute return modified by subsequent delinquent return?
- Do I file every delinquent return for each missing year?
- How does the IRS identify non-filers?
- How important is it to the government that I didn’t file?
- Delinquent tax return criminal prosecution likelihood
- Will I get a refund on a delinquent tax year?
- What happens after enforcement action has begun?
- Should I use an attorney, EA or a CPA to represent me when I re-enter the tax system?
- Why do people drop out of the tax system?
- What happens after the IRS identifies me as a non-filer?
- IRS has not previously filed substitute returns
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- What penalties can IRS impose on delinquent tax filings?
- What should I do to re-enter the tax system?
- Can Law Office of David W. Klasing help me re-enter system?
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- I concealed bank accounts from the government
- Forgetting or failing to file tax return
Questions and Answers for Criminal Tax Representation
- When tax defense counsel parallels tax crime investigation
- Guilty of tax obstruction by backdating documents?
- To be found guilty of tax obstruction must a person actually be successful in impeding the IRS’s functions?
- Help! The Document I Gave the IRS Had False Information
- Tax crime aiding or assisting false return IRC §7206(2)
- What is the crime known as tax obstruction § 7212?
- What is the difference between tax perjury and tax evasion?
- What is the tax crime commonly known as tax perjury?
- What is a Klein Conspiracy?
- Increased possibility of civil action in IRS investigation
- Am I Guilty of Tax Evasion if the Law is Vague?
- What happens if the IRS thinks I committed tax crimes?
- What are ways to defend against a tax evasion charge?
- Difference between criminal tax evasion and civil tax fraud
- What accounting method does the IRS use for tax fraud
- Can I Change Accounting Method to the Accrual Method
- What is the willfulness requirement for tax evasion?
- I didn’t know I committed tax fraud. Can I get off?
- Concealed assets from IRS. Can I avoid tax evasion charges
- How government proves I willfully engaged in tax evasion
- What is the venue or court where a tax crime case is heard?
- Must the IRS prove tax crimes beyond a reasonable doubt?
- Is it a crime to make false statements to the IRS?
- Will the IRS overlook my tax evasion if it’s minor?
- Failed to tell IRS about my nominee account
- Audit risk with cash based business transactions
- How to defend a client charged with tax evasion
- Is it tax evasion if I didn’t file income tax return?
- Government says I attempted to evade my taxes. Now what?
- I forgot to pay my taxes or estimated tax. Is this a crime?
- Government proof I “willfully” failed to pay taxes
- How to respond to willful tax evasion charges
- Being audited after using a tax professional
- Rules for what an IRS agent can do while investigating me
- How tax preparers, attorneys and accountants are punished
- How the IRS selects tax crime lead for investigation
- How does the IRS prosecute suspected tax crimes?
- Does IRS reward informant leads for suspected tax crimes?
- How the government proves deficiency in a tax evasion case
- Do prior tax crimes factor into new IRS tax convictions?
- Requesting conference before investigative report is done
- Requesting conference after IRS Special Agent Report
- What are my rights during an IRS criminal investigation?
- Avoid prosecution for tax crime with voluntary disclosure?
- Defense tactics that make it hard for to prove willfulness
- How a tax attorney can stop your criminal tax case?
- What can you generally tell me about tax crimes?
- Continuing filing requirement with investigation pending
- Federal criminal code crimes that apply to tax issues
- Penalty for making, subscribing, and filing a false return
- CID special agent’s report for criminal prosecution
- What is the discovery process in a criminal tax case?
- What the IRS includes in indictment for tax case
- What is the hardest element of a tax crime to prove?
- IRS methods of gathering evidence to prove tax crime
- What does a grand jury do in IRS tax crime prosecution?
- Failure to keep records or supply information
- Failure to make a return, supply information, or pay tax
- What is attempting to evade payment of taxes?
- What is income tax evasion and how is it punished?
- What is attempted income tax evasion?
- What is the crime of failure to pay tax? What is punishment
- Crime of making or subscribing false return or document
- Criminal Investigation Division investigation tactics
- Tax crimes related to employment tax forms and trust funds
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- How the IRS generates leads about suspected tax crimes
- What is the crime ”evasion of assessment” of tax?
- Specific examples of “attempting” to evade tax assessment
- What is the so-called Spies evasion doctrine?
- Does overstating deductions constitute tax evasion?
- Is it tax evasion if my W-4 contains false statements?
- IRC §7201 attempt to evade vs. common-law crime of attempt
- What are the penalties for Spies tax evasion?
- How government proves a taxpayer attempted tax fraud
- What is a tax that was “due and owing.”
- What is evasion of assessment for tax liability?
- Is evasion of assessment different from evasion of payment
- Does the IRS have a dollar threshold for tax fraud?
- What is the IRS burden of proof for tax fraud convictions?
- Are Tax Laws Constitutional?
- What is the source of law that defines tax evasion?
- Does section 7201 create two distinct criminal offenses?
- Does tax evasion definition include partnership LLC
- What if I helped someone else evade taxes?
- Is it illegal to overstate deductions on my tax return?
- Is it illegal to conceal bank accounts from the IRS?
- Do later losses justify prior deductions?
- Common reasons the IRS and DOJ start investigations
- What is the Mens Rea component of tax crimes?
- What is a proffer agreement and what are the risks?
- Why to have an attorney to review a proffer agreement
- Why enter into a proffer agreement?
- Limited use immunity from proffer agreements
- Difference between civil and criminal fraud allegations
