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Story Update: Colorado Man Sentenced in Fraudulent Tax Credit Case

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    According to a Department of Justice press release, a Colorado man was recently sentenced to 15 months in federal prison after having been convicted of taking part in a scam to fraudulently claim biodiesel tax credits. This story has the broader theme relating to the seriousness of claiming fraudulent tax credits, regardless of the type, omitting income, or claiming fake deductions. If you have taken an fraudulent position regarding tax credits, income or deductions on a pattern of filed tax returns or have failed to file a tax returns for one or more years, you should consider consulting with an experienced tax lawyer to determine the best route to getting back into compliance before and audit or criminal investigation is opened and remove the risk of criminal tax prosecution.  

    Defendant Proven at Trial to Have Falsely Claimed Tax Credits & Consequently Convicted and Sentenced

    This story serves as an update to one of our blog posts earlier this year. Martin Fields and his co-conspirators created a fake entity called Shintan Inc. that held itself out to be a creator of renewable biodiesel fuel. Fields and his associates caused Shintan Inc. to file false documentation with the IRS for tax years 2010 through 2013, claiming that the entity was entitled to more than $7.2 million in renewable fuel tax credits. In reality, the company had not produced any renewable fuel that qualified under the biodiesel renewable energy credit program.

    When the tax credits were refunded to the Fields and his co-conspirators, the defendants passed the funds through various bank accounts and shell companies as a part of a laundering scheme. During his trial, government attorneys presented evidence that Fields personally benefited from the scheme and received more than $1.8 million. The other two defendants pleaded guilty to similar charges prior to Fields’ trial.

    In addition to Fields’ 15-month federal prison sentence, he was ordered to serve a term of supervised release for three years upon the completion of his physical incarceration. Additionally, Fields is required to pay just under $600,000 in restitution to the IRS.

    Consulting with a Tax Attorney When You Have Civil or Criminal Tax Exposures

    As we mentioned in our previous blog post relating to this story, the biodiesel tax credit is used by only a small number of taxpayers when compared to all U.S. taxpayers, but the principles from this story span across all tax credits. Because tax credits offset tax liability on a dollar-for-dollar basis, they are valued the same as cash. As such, the IRS and Department of Justice are extremely sensitive to taxpayer scams to claim undeserved tax credits.

    If you omitted income, have taken the benefit of a tax credits or deductions that you are not truly entitled to or if you have taken another position that fraudulently otherwise lowers your tax liability, you should strongly consider seeking the assistance of a seasoned dual licensed Tax Lawyer & CPA. Working together, you and your Tax Attorney CPA will establish the pertinent facts of your case and determine the best strategy to get right with the government. A key benefit of hiring a tax attorney is not having to go up against the IRS or state taxing authority alone.

    Note:  As long as a taxpayer that has willfully committed tax crimes (potentially including claiming credits or deductions for which you are not legally entitled to, and or, omitting 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 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 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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