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Southern California Couple Faces Prison After Pleading Guilty to Tax Charges, Wire Fraud

Southern California couple may get jail time for tax fraud.

According to a Department of Justice press release, a Southern California couple recently pleaded guilty to various criminal counts related to a charity and tax scheme that both took advantage of those who donated to their cause and the U.S. tax base. This story is a reminder that the IRS and Department of Justice will investigate and prosecute cases of tax wrongdoing, regardless of how sympathetic a particular taxpayer may seem. 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 examination, it is in your best interest to contact an experienced tax attorney to discuss your options to come into compliance.

Charity Owners Stole Charitable Donations and Lied on Their Tax Returns

Geraldine Hill and Clayton Hill, a married couple from Southern California pleaded guilty to charges of conspiracy to commit mail fraud and tax evasion this week. Prosecutors alleged that the Hills established a 501(c)(3) charity known as On Your Feet and solicited clothing donations. Although the couple indicated to donors that the clothes would be given to needy recipients from low-income families, federal investigators uncovered that of the $1.35 million of clothes donated to On Your Feet, only $13,000 was donated to a charitable cause. The remainder of the proceeds went into the pockets of the defendants.

The Hills caused false tax returns to be filed for On Your Feet, falsely indicating that substantially all of the donation proceeds went to help those in need. Additionally, the Hills falsified their own individual tax returns by intentionally omitting the income that they earned in their illegal charitable scheme.

The defendant’s sentencing is scheduled for the end of August. Each of the Hills face up to five years in prison for the conspiracy to commit wire fraud count as well as up to five years in prison for the tax evasion count. Each will likely be sentenced to serve a period of supervised release. Finally, the couple will likely be required to pay restitution for the amount that was misappropriated, as well as the taxes that should have been paid associated with the illegal scheme.

Knowing When to Get Help

Although the Hill’s case is rather unique in that it involves a charity that was not acting in accordance with its mission statement to help those who were disadvantaged, this story illustrates that the IRS and Department of Justice will pursue any taxpayer who is believed to have failed to pay taxes. If you are behind on your taxes or have received a notice that your tax returns will be audited, it is in your best interest to contact an experienced tax defense attorney to get right with the government.

Working with your tax lawyer, you will first develop a comprehensive inventory of your areas of civil and criminal tax exposure. You will then, with the assistance of your tax attorney, decide on the steps that will be taken to come into compliance with federal and state tax laws. Regardless of the approach taken by you and your tax attorney, you will never have to go up against the IRS or state tax authorities alone.

Note

As long as a taxpayer that has willfully committed tax crimes (potentially including non-filed returns coupled with affirmative evasion of payment) 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 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, Kovel CPAs 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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Regardless of your particular business or individual tax 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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