Southern California Couple Sentenced After Being Convicted of Mail Fraud and Tax Evasion

According to a Department of Justice press release, a Southern California couple was recently sentenced to serve time in federal prison after being convicted of mail fraud and tax evasion. This story should serve as a warning to taxpayers who have taken positions on their tax returns that could not be supported upon an examination or to those who have failed to file a tax return for one or more years, altogether. If you have failed to uphold your obligations under federal or state tax laws, it is in your best interest to seek the assistance of an experienced tax defense attorney.

Defendants Stole from Donors and Lied on Their Tax Returns

We brought you the story of Geraldine Hill and Clayton Hill in a story earlier this year. If you recall, the couple pleaded guilty to charges of conspiracy to commit mail fraud and tax evasion in early 2020. 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.

Geraldine Hill and Clayton Hill were sentenced to serve 15 months and 9 months, respectively. In addition to their prison sentences, the Hills were each ordered to serve three years of supervised release upon the completion of their physical incarceration. Lastly, the Hills were ordered to pay nearly $51,000 in restitution to the IRS, representing the tax loss that their fraudulent activity caused.

Curing Defects in Your Tax Return Before the IRS Examines Your Return

Although the defendants in this case broke federal laws in addition to committing tax evasion, the potential criminal consequences remain the same. If you have failed to file a tax return for one or more years or have taken a position on a tax return that is not supportable, you are at risk for criminal and civil repercussions that can be life changing. Whether you have over-inflated deductions or intentionally omitted income, there are various methods that your experienced tax attorney can utilize to bring you into tax compliance.

In addition to developing a strategy to minimize the potential negative consequences that come along with a tax examination, investigation, or prosecution, your tax attorney will represent you in any interaction with the IRS or state taxing authority. Simply put, you will not have to go up against the government alone.

Note: As long as a taxpayer that has willfully committed tax crimes 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!

We Are Here for You

Regardless of your particular business or estate 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.

In addition to our main office in Irvine, the Tax Law Offices of David W. Klasing has unstaffed (conference room only) satellite offices in Los Angeles, San Bernardino, Santa Barbara, Panorama City, Oxnard, San Diego, Bakersfield, San Jose, San Francisco, Oakland, Carlsbad and Sacramento. During the COVID-19 pandemic, our staff are working from home, but have full virtual meeting capability.

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Questions and Answers about Offshore Voluntary Disclosure Initiative (OVDI)

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Questions and Answers About Foreign Tax Audits

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Questions and Answers on Unfiled Back Taxes

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• What happens after enforcement action has begun?
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• 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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• 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
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• 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
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• 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
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• What are ways to defend against a tax evasion charge?
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• What is the willfulness requirement for tax evasion?
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• Must the IRS prove tax crimes beyond a reasonable doubt?
• Is it a crime to make false statements to the IRS?
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• Failed to tell IRS about my nominee account
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• What the IRS includes in indictment for tax case
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• 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
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• 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?
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• Do later losses justify prior deductions?
• Common reasons the IRS and DOJ start investigations
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• What is a proffer agreement and what are the risks?
• Why to have an attorney to review a proffer agreement
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• Limited use immunity from proffer agreements
• Difference between civil and criminal fraud allegations