US Department of Justice and the IRS Assert Tax Scheme
Two individuals from Wyoming and one individual from Arizona were found guilty by a federal jury last Thursday on charges related to tax evasion and obstruction. The charges and subsequent convictions show the Federal Government’s continued commitment to go after anyone that hasn’t paid their fair share of taxes.
The vigorous investigation and prosecution also serve as a warning to taxpayers that try to take their tax prosecution defense into their own hands.
The Charges: Evasion of Federal Income Tax
According to a Department of Justice press release, Joseph Ruben Hill, 56, Lucille Kathleen Hill, 58, and Gloria Jean Reeder, 68, were all convicted of several counts stemming from the evasion of federal income tax. Although the Hills lived in Wyoming and Reeder resided in Arizona, the group worked together on a criminal scheme that was aimed to assist them and others to avoid paying federal tax. Between 2007 and 2012, the three established and operated CCG Trusts, which offered trust services to other taxpayers purporting to abrogate any federal tax liability by assigning customer income to a trust with an invalid taxpayer identification number. The Department of Justice and IRS estimated that the CCG scheme cost the government nearly $3 million in tax revenue.
In addition to the effort to defraud the United States through CCG, the Hills and Reeder paid no taxes to the federal government for a considerable amount of time. Joe and Kathy Hill had over $500,000 of income from CCG and Gloria Reeder had over $400,000 from an insurance and travel agency that went unreported spanning over a six-year period. To make matters worse, The Hills hadn’t filed a tax return since 1994 and Reeder hadn’t filed or paid any tax since 1985. Each of the defendants face a five-year sentence for the single conspiracy charge and will likely be ordered to pay fines, penalties, and restitution.
Finally, Joe Hill was charged with and convicted on four counts of obstruction of a grand jury investigation. The federal jury found that Joe Hill intentionally persuaded third parties not to turn over documentation that was subpoenaed by the federal grand jury that eventually resulted in an indictment. This move could cost Mr. Hill his freedom because the charges of obstruction come with a maximum sentence of 20 years in a federal prison in addition to any other sentences imposed with regard to the conspiracy charges discussed above.
A Lesson For Other Taxpayers Under Examination or Investigation
Joe Hill’s actions were most certainly not the way to go about handling a grand jury investigation. It isn’t clear if an attorney represented the Hills during the grand jury proceedings, but one thing is for sure: any reputable attorney would advise against his obstructive behavior. There are many options and strategies in choosing how to handle an IRS examination, investigation or Department of Justice action, but illegally obstructing the investigation is not a valid option. Anything that is done or said in the course of an investigation can be either helpful or extremely hurtful to a taxpayer being investigated. This prosecution evidences the great need for competent legal representation at any stage in a tax investigation or litigation.
Contact a Tax Attorney with Experience in Criminal Tax Defense
The tax and accounting professionals at the Tax Law Office of David W. Klasing have years of experience representing taxpayers in all stages of tax controversy spanning from examination to appeals conferences to civil litigation or criminal investigation. When dealing with the IRS or their Criminal Investigations Division, anything that is said or done can be considered a badge of tax fraud and can land a taxpayer in some very hot water. It is absolutely necessary to consult with an experienced tax attorney who is willing to go to bat for you and is committed to securing best outcome possible in your tax dispute with the government. Don’t go up against the government alone. Contact the Tax Law Offices of David W. Klasing today for a reduced-rate consultation.
