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Two Georgia Residents Plead Guilty After Orchestrating Tax Scheme Costing the IRS More Than $1B

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    According to a Department of Justice press release, two Georgia residents recently pleaded guilty to one count of conspiracy to defraud the United States, relating to an illegal tax strategy that they marketed to wealthy individuals, giving rise to more than $1 billion of fraudulently obtained tax benefits. This story should serve as a lesson to taxpayers that if a tax strategy sounds too good to be true, it could be. Furthermore, if you have taken a position on a tax return that could not be supported upon examination, it is in your best interest to contact an experienced tax defense attorney to determine the best strategy to bring you into compliance. 

    Defendants Helped Clients Engaged in Complex Tax Scheme

    Stein Agee of Canton, Georgia, and Corey Agee of Atlanta, Georgia pleaded guilty in the final days of 2020 after being charged with conspiracy to defraud the United States. The pair of defendants were partners in an accounting firm persuaded clients to invest in fraudulent syndicated conservation easement (SCE) tax shelters. In simplistic terms, the SCE generated large deductions for high-net-worth individuals who invested in certain real estate transactions.

    Generally, SCE tax shelters work alongside real estate investments and can turn every dollar invested into up to four dollars of deduction. This is purportedly achieved by the sale or donation of certain easements that are attached to the real estate investment. Such easements could include the right to subdivide, develop the property, or could be related strictly to keeping the property for conservation purposes. Although the scheme is rather complicated, it is particularly attractive when marketed to investors as it purports to return four to one (or more) returns.

    Stein and Corey Agee’s efforts resulted in their clients fraudulently claiming over $1.2 billion of tax benefits by engaging in the SCE scheme. As a fee for their services, Stein and Corey Agee received over $1.7 million in commissions. Each faces up to five years in federal prison, three years of supervised release, and will likely be ordered to pay restitution to the IRS upon sentencing.

    Knowing When to Seek the Assistance of a Tax Attorney

    Although our readers are likely not promoters of pass-through real estate tax shelters, the vigor of the IRS and the Department of Justice in their prosecution of this and similar cases should be taken into consideration when filing your own taxes. Whether you are engaged in a tax shelter, understate your income, or overstate deductions, the IRS is always on the lookout for those cheating on their taxes. And it does not take $1.2 billion of tax loss to yield a criminal investigation or prosecution.

    If you have failed to file a tax return or have taken a position on a tax return that could not be supported upon an audit or criminal tax investigation, you should consider seeking the guidance of an experienced civil and criminal tax defense lawyer. Together, you will work with your seasoned tax attorney to establish the pertinent facts of your case and develop a roadmap to move forward into compliance with the IRS or state taxing authority. While being represented by an experienced tax attorney, you will never have to go up against the IRS alone.

    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!

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