According to a Department of Justice press release, a Texas brother and sister have found themselves in hot water after being charged as a part of a tax evasion and obstruction scheme. During tax season, this story is a clear reminder that failing to file a tax return or filing with information that is fraudulent can result in severe consequences, including Federal or State prison time. If you have failed to file a tax return for one or more years, have underreported your income, or taken deductions or credits that you are not entitled to, you should consult with an experienced tax defense attorney to determine the best strategy to get right with the government.
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!
Court records reveal that Michael Andrew McCann and his sister, Toni Gale Engeling, allegedly worked together to obstruct the Service’s ability to assess and collect tax rightfully owed by McCann. Working as a dentist, McCann earned a substantial profits, but prosecutors believe that with the help of Engeling and the use of nominee entities, the commingling of personal and business expenses, and downright untruthfulness to the IRS, his tax bill was artificially decreased. Dating back as far as 2002, the federal prosecutors assert that McCann made false representations on bankruptcy statements, as well. Between 2014 and 2018, the government alleges that McCann failed to file a tax return altogether. Lastly, the indictment alleges that in 2019, Engeling worked to obstruct the criminal investigation of a federal jury hearing the case made against McCann by making untruthful statements.
If the pair are convicted, they face several decades of combined prison time. Each can be sentenced for up to five years on the conspiracy charge. McCann faces an additional five years in prison for the count of bankruptcy fraud, three years in prison for obstructing the IRS, and one year in prison for each year that he willfully failed to file his tax return. Engeling faces up to ten additional years for the single count of obstructing a grand jury. If convicted, each could also face terms of supervised release, as well as being ordered to pay restitution to the IRS.
The story above should remind taxpayers that serious consequences come along with attempts to defraud the Federal or State Governments. Whether engaging in bankruptcy or tax fraud, deceitful actions have consequences. The good news is that there is a path to compliance for those who have found themselves on the outside looking in. The best way to understand the exposure that you currently face and the best strategies to come into compliance is to consult with an experienced tax defense attorney.
You and your seasoned tax defense lawyer will go over the pertinent facts of your case, identifying pressure points that should be addressed first. Together, you will agree on a plan that not only brings you into tax compliance, but also keeps your liberty and net worth as a top priority. Additionally, one of the best benefits of being represented by a tax attorney is not having to go up against the IRS or State taxing authority alone.
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. During the COVID-19 pandemic, our staff are working from home, but have full virtual meeting capability.
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