Tennessee Couple Pleads Guilty to Conspiracy for Inflating Tax Withholding

If you are a frequent reader of our blogs, you know that there are several ways that taxpayers attempt to manipulate the tax system to lower their overall tax burden or artificially inflate their refund claims. Some taxpayers reflect lower income on their tax returns than what was actually received. Others will exaggerate deductions and credits. Another illegal strategy is to lie about how much money has been remitted to the IRS on your behalf through paycheck withholdings. But as a married couple recently discovered, the government will not stand idly by while taxpayers attempt to game the system.

According to a press release by the Department of Justice, Jeffrey Cephus McCoy Jr., 70, and Andra McCoy, 68, recently pled guilty to one count each of conspiring to defraud the United States. Prosecutors alleged that in addition to underreporting income, they also overstated the amount of federal income tax that had already been withheld from their paychecks throughout the year.

The McCoy’s admitted during their federal hearing that from tax years 2002 through 2014, they conspired with each other to defraud the federal government by failing to pay the proper amount of taxes. During that timeframe, the two over-reported the amount of federal withholding by nearly $450,000. Their untruthful inflation of their withholding led to the couple paying considerably less federal income tax than they would have had they taken into consideration the true amount of federal taxes withheld when calculating their tax liability.

The McCoy’s hearing did not include sentencing but each face up to five years in federal prison based on the conspiracy charge. In addition to physical incarceration, the pair will likely also be sentenced to an additional term of supervised release. Finally, because the McCoy’s criminal tax behavior resulted in an underpayment of tax, they will likely be required to pay restitution to the IRS and may even have to pay a fine that could total in the hundreds of thousands of dollars.

Contact an Experienced Tax Attorney Today

If your taxes are under examination or you have been accused of overstating deductions, understating or concealing income, or lying about tax withholdings, it is in your best interest to contact an experienced tax attorney as soon as possible. A criminal tax defense attorney can ensure that you are represented at each critical moment of your interaction with the government. And unlike other tax professionals, only an attorney can give you the critical legal advice needed to protect the financial wellbeing of you and your family and can help keep you out of federal prison.

The tax and accounting professionals at the Tax Law Offices of David W. Klasing have extensive experience in representing taxpayers from all walks of life in a myriad of tough tax situations. Whether you are planning for your financial future, are under IRS or state tax examination, or are embroiled in full on tax litigation, our professionals are ready to zealously advocate on your behalf. Don’t lose another night of sleep because of tax troubles. Contact the Tax Law Offices of David W. Klasing today for a reduced-rate consultation.

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Here is a link to our practice overview video on warning signs than an audit has gone criminal.