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Texas Business Owner Faces Prison After Tax Fraud Conviction

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    According to a Department of Justice press release, a Texas business owner recently pleaded guilty to tax fraud after hiding substantial amounts of income from the IRS. This story illustrates the repercussions taxpayers face when they fail to properly file a federal income tax return with accurate income information. If you have failed to file a tax return for one or more years, or have filed a tax return that contains incorrect information related to your items of income or deductions, it is in your best interest to contact an experienced tax defense attorney to establish your potential exposure and come into compliance without facing criminal tax prosecution.

    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!

    Defendant Failed to Report Substantial Business Income

    Court records reveal that Charles Holley was the owner and operator of a Texas-based data brokerage. The business was engaged in buying certain data from state motor vehicle agencies and on-selling the information to purchasers. Between 2009 and 2014, Holley set up various bank accounts in which proceeds from the data brokerage were deposited. One of the bank accounts was located in Cyprus. In 2012, Holley filed a federal income tax return that did not include any income from the data brokerage company. The omission from her 2012 federal income tax return created a tax loss of more than $202,000.

    The defendant is scheduled to be sentenced in the fall. She faces up to three years in prison for filing a false income tax return. Additionally, Holley could be ordered to serve a period of supervised release to commence upon the completion of any physical incarceration. Lastly, Holley will likely be ordered to pay restitution to the IRS, representing the tax loss that she caused.

    Coming Into Compliance After Filing a Series of Incorrect Tax Returns

    The story described above is important because it shows that a taxpayer can be investigated and criminally prosecuted for tax crimes committed in only one calendar tax year. Many of the stories that we highlight on our blog involve multi-year tax schemes, but it is important to remember that one illegal act is all that is necessary to bring criminal tax charges. In this case, the defendant simply omitted an amount of income from one year’s tax return. Nonetheless, she may very well spend three years in federal prison as a result.

    If you have failed to file a tax return for one or more years or have failed to include income on a filed income tax return, you should contact an experienced tax defense attorney to assist in establishing your potential civil or criminal exposure. Working with your seasoned tax lawyer, you will lay out the pertinent facts of your case and will work together to map out an efficient and effective path forward toward getting right with the government. While you are being represented by a seasoned tax lawyer, you will be able to focus on the important things in life and will not have to go up against the IRS alone.

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