According to a Department of Justice press release, a Texas man recently pleaded guilty to tax evasion after earning millions of dollars overseas. While taking steps to reduce your tax liability is not inherently illegal, doing so with the intent to fraudulently lower your tax bill is. If you have failed to file a tax return for one or more years, or have filed a return that you knew to be fraudulent, it is in your best interest to contact an experienced tax defense attorney to help you get right with the government.
Defendant Earned Significant Income Overseas, Took Steps to Avoid U.S. Tax
Court records reveal that Peter Joseph Tignini, a resident of Texas, admitted to deliberately evading his federal income taxes. Between 2013 and 2018, Tignini was employed in the United Arab Emirates and Qatar, earning an income of roughly $4.78 million, which he deposited in overseas banks. Department of Justice lawyers asserted that he falsely reported his annual earnings as only around $100,000 on his federal tax returns from 2013 to 2017, aligning his declared income with the Foreign-Earned Income exclusion. This IRS provision allows U.S. expatriates to exclude a portion of their foreign-earned income from taxable amounts. Tignini didn’t submit a tax return in 2018, leading to a tax deficit of $1.17 million to the IRS.
When the IRS began its investigation, Tignini attempted to deceive authorities. He digitally altered his employment records, indicating his previous employer had the duty of filing his tax returns and handling the associated taxes. He further misled officials by instructing his legal team to present the falsified documents to the Justice Department’s Tax Division and the IRS. However, his untruthfulness was uncovered when an individual provided information on the online tool Tignini used for the falsification. Following this, Tignini tried erasing the incriminating evidence from his online account. Tignini faces up to five years in federal prison, a period of supervised release, and restitution. He will be sentenced at a later date.
Seeking Assistance from a Tax Attorney When You Encounter a Complex Tax Situation
The defendant in this case spent time earning wages overseas. The U.S. tax rules regarding the taxation of foreign income can be complex and may require consultation with a tax professional. But complexity aside, intentionally falsifying documents in order to pay less U.S. tax is illegal and is not an efficient strategy for lowering your tax bill. In fact, the defendant in this case will likely pay much more than he would have had if he had filed his taxes correctly at the outset. Additionally, he will likely be sentenced to serve time in federal prison.
If you have earned income overseas or have another scenario involving complex tax rules, you should contact a seasoned tax attorney to work through your case. Together, you will gather the important facts of your case and develop a tax strategy that aims to legally reduce your tax bill and ensure that you are in compliance with federal and state tax laws.
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 authority audit, eggshell audit, reverse eggshell audit, or criminal tax investigation, it is in your best interest to contact an experienced tax defense attorney to determine your best route back into federal or state tax compliance without facing criminal 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 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 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!
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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.
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