According to a Department of Justice press release, three family members from Beaumont, Texas were sentenced on charges relating to running an illegal sports betting operation and tax evasion. This story emphasizes how tax laws and investigations into their compliance can lead to or stem from other federal investigations. If you have failed to file a tax return for one or more years or have engaged in any type of tax fraud or evasion, it is in your best interest to seek the assistance of an experienced tax defense attorney and to come into compliance before the IRS or state taxing authority launches their own investigation.
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Larry Earnest Tillery, 70, Judy Kay Tillery, 63, and Brian Tillery, 47 pleaded guilty last year to various counts including tax evasion, engaging in monetary transactions in property derived from specified unlawful activity, and structuring financial transactions to evade reporting requirements. Larry Tillery, portrayed as the mastermind of the operation, was the owner and operator of Daylight Motors, a used car dealership. Larry Tillery also owned Lamar Capital; an entity formed for the sole purpose of acting as a holding company for Daylight Motors.
Federal investigators discovered that Larry Tillery, with the assistance of his wife Judy and his son Brian, ran an illegal sports gambling operation using Lamar Capital and Daylight Motors as a front. The Tillery family admitted that the sports gambling operation facilitated betting on collegiate and professional sporting events. In total, the government estimated that between 2010 and 2016, financial transactions relating to illegal sports gambling totaled over $32 million.
From a tax perspective, the Tillery family failed to report the income earned from their sports gambling operation. Additionally, although their sports betting activities were illegal under both Texas and federal law, federal tax law requires bookmakers to register with the IRS and pay an excise tax on all wagers accepted. Unsurprisingly, the Tillery family did not register with the IRS or pay any excise tax.
At their sentencing hearing, Larry Tillery was sentenced to serve 33 months in federal prison, pay over $1 million in restitution, forfeit over $2 million, and pay a judgement to the federal government of over $32 million. Judy Tillery was ordered to serve two years of federal probation and was also subject to the $2 million asset forfeiture order. Lastly, Brian Tillery was ordered to pay a money judgment of $700,000 and forfeit over $245,000 in cash and a home worth over $600,000 that was purchased with proceeds from the gambling operation.
Although most taxpayers are not engaged in illegal sports gambling rings, it is not uncommon to have failed to file a tax return for one or more years. Additionally, it is not uncommon for a taxpayer to have failed to report certain amounts of income over to have overstated deductions on their tax return. Regardless of what the noncompliant activity may be, one truth remains constant: affirmatively rectifying the problem before the IRS or state taxing authority raises it generally results in a more favorable outcome.
With the assistance of an experienced tax defense attorney, you will first ensure that all of the pertinent facts are understood and accounted for. Next, your tax defense attorney will make a recommendation as to a strategy to bring you into tax compliance. Lastly, your seasoned tax lawyer will represent you in any communication with the IRS. You will not have to go up against government tax agents alone.
Note: As long as a taxpayer that has willfully committed tax crimes (potentially including non-filed returns coupled with affirmative evasion of payment) 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 individual tax 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.
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