According to a Department of Justice press release, a Louisiana businessman recently pleaded guilty to tax fraud after the Department of Justice accused him of falsifying his own individual taxes, as well as paying employees under the table. Although there are legal methods to reduce your tax liability through the use of tax planning, underreporting income, overreporting expenses, or paying employees in cash to avoid payroll tax liability are not effective means to a tax efficient end. 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 audit, egg shell audit, reverse eggshell audit or criminal tax investigation it is in your best interest to contact an experienced tax defense attorney to determine your options to come into tax compliance.
Note: As long as a taxpayer that has willfully committed tax crimes (potentially including non-filed foreign information returns coupled with affirmative evasion of U.S. income tax on offshore income) 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!
This posting is an update to a story that we brought you earlier this year. In our previous blog posting, we detailed the charges against Mathew Reck and his co-conspirators. If you recall from that story, Reck, David Farrell, and Dawn Farrell Ruiz were accused of conspiring to defraud the IRS. The three were responsible for operating the SES Construction Consulting Group and Global Technical Solutions. Reck was the co-owner of the two businesses while Farrell and Ruiz worked as project manager and bookkeeper, respectively. Reck and the other defendants were accused of underreporting the income that they earned from the business on their individual income tax returns.
Additionally, Reck and Ruiz were accused of causing the businesses to file false corporate income tax returns. According to the indictment, some employees were paid in cash or “under-the-table”. Thus, workers’ compensation was not reported to the IRS. When approached by investigators from the IRS, Reck is accused of lying about his relationship with the accountant for the two businesses. Additionally, Reck told his accountant to “get really creative with his 2012 taxes” and instructed the same accountant to “crush” his 2013 individual tax return.
Reck’s sentencing has not yet been scheduled. He faces up to five years in prison. Additionally, Reck could be sentenced to serve up to three years of supervised release to commence upon the completion of any physical incarceration. Lastly, Reck will likely be ordered to pay restitution to the IRS, representing any tax loss that he caused the government as a part of his illegal activity.
The defendant in the story above directed his accountant to bend or break the rules in order to reduce his tax liability. Additionally, he and his co-conspirators operated a business in a manner that violated tax laws in an attempt to reduce their tax bill. As we indicated at the outset of this story, there are a plethora of business planning opportunities that can be employed to reduce a business’s overall tax bill. But paying your employees cash to thwart the payroll tax system or simply underreporting income are not included in such effective planning solutions.
Taxpayers who have a desire to engage in tax strategies to legally and efficiently reduce their tax burden are encouraged to work with a seasoned tax lawyer who knows the in’s and out’s of the Internal Revenue Code and state tax laws.
If you have failed to file an individual or business tax return for one or more years or have provided false information on a tax return you have already filed, it is in your best interest to contact an experienced tax defense attorney to determine your level of civil or criminal exposure. Then, you will work together to establish an effective strategy to get you right with the government. While you are being represented by a tax attorney, you will not have to go up against the IRS alone, allowing you to focus on the other important aspects of your life.
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.
Our office technology allows clients to meet virtually via GoToMeeting. With end-to-end encryption, strong passwords, and top-rated reliability, no one is messing with your meeting. To schedule a reduced rate initial consultation via GoToMeeting follow this link. Call our office and request a GoToMeeting if you are an existing client.