According to a Department of Justice press release, Alabama chiropractor Gary Forrest Edwards pleaded guilty in the Northern District of Alabama to one count of tax evasion and one count of obstructing the administration of the internal revenue laws. Edwards, who owns Hoover Health & Wellness Center in Shelby County, admitted that he owes more than $2.5 million in federal income taxes but took intentional actions to keep the IRS from collecting anything. He now faces up to five years in prison on the evasion count and three years on the obstruction count, along with supervised release, restitution for the tax loss, and substantial monetary penalties. If you have significant unpaid tax liabilities or if you have moved assets the IRS might deem “concealment”, it is in your best interest to contact an experienced tax attorney immediately to design a path to get right with the government.
Court records reveal that Edwards had not filed returns for many years when, in 2015, he filed late Forms 1040 for 2009 through 2013. He later filed a return for 2017. Those late-filed returns accurately reported high six- and seven-figure incomes and showed more than $2.5 million in self-assessed taxes. Yet Edwards didn’t pay any of it, nor any of the mounting interest and penalties. Under the Internal Revenue Code, tax becomes “assessed” the moment a return is filed and payment is due upon demand. When taxpayers acknowledge a liability but refuse to pay, the IRS may file a Notice of Federal Tax Lien, issue levies, or seize property. In egregious cases like this one, IRS Criminal Investigation (IRS-CI) refers the matter for felony prosecution under § 7201, which requires the government to prove:
- A substantial tax was due and owing;
- The defendant committed at least one affirmative act designed to evade or defeat that tax; and
- The defendant acted willfully, that is, intentionally violated a known legal duty.
Edwards’s own signed returns satisfied the first element. Prosecutors established the second and third elements by tracing a pattern of asset-hiding transactions between 2015 and 2023. According to testimony and documents admitted at trial, Edwards concealed financial accounts he controlled, making them invisible to IRS Revenue Officers, transferred large sums into bank accounts held solely in his spouse’s name, despite continuing to benefit personally, filed false documents in a local court that purported to “terminate” federal tax liens against his real and personal property, and lied to IRS-CI agents during a criminal tax interview, conduct that independently violates 18 U.S.C. § 1001 and typically triggers an “obstruction of justice” enhancement under the Federal Sentencing Guidelines.
By channeling funds through relatives and misstating ownership, Edwards attempted to place assets beyond the government’s reach while maintaining de facto control. Courts routinely treat such “nominee” arrangements as badges of fraud. In calculating his Guideline range, the judge will likely apply enhancements for “sophisticated means”, obstruction, and the large tax loss, pushing the advisory term well above the statutory three-year maximum for the obstruction count and close to the five-year ceiling for evasion.
How Civil Tax Debt Can Become Criminal Tax Exposure
For most taxpayers, delinquent balances remain purely civil matters resolved through notices, liens, installment agreements, or, in severe cases, levies. A case escalates when the taxpayer commits affirmative evasive acts to defeat tax collection. For example, creating nominee entities, making false statements on collections information statements or in interviews with IRS revenue officers, or liquidating assets and pocketing the proceeds. IRS-CI special agents then gather bank records, real-property filings, and witness testimony to show willfulness. Once the Tax Division of the Department of Justice authorizes criminal tax charges, a grand jury indictment or like in this case, a mid-trial guilty plea follows.
Practical Takeaways for Those Who Owe Substantial Tax Debt
Voluntary compliance tends to pay off. Filing accurate returns late is commendable, but leaving the corresponding taxes unpaid signals willfulness, not inadvertence. Additionally, full disclosure beats partial disclosure. Omitting assets or giving misleading answers can turn a civil revenue-officer case into a criminal one. Furthermore, if cash-flow problems prevent full payment, place at least a portion of revenue in a dedicated tax account and begin negotiations with IRS Collections. Demonstrating the intent to pay along with honest verbal and written interactions with collections will avert criminal tax referral. Finally, professional representation is critical. Tax counsel can guide installment-agreement requests, offers-in-compromise, and hardship defenses, often long before IRS-CI becomes involved.
Edwards will be sentenced later this year. In addition to incarceration and supervised release, he can expect a restitution order covering the entire tax loss, interest, and penalties. The IRS may also pursue civil penalties against anyone who assisted in his concealment scheme, including transferees who received property for less than fair market value.
If you get convicted of a tax crime while in the U.S. on a green card, visa or illegally, you will also likely face deportation proceedings after being released from prison. Additionally it is important to note that non filing associated with a collection action can easily turn criminal under a Spies Evasion fact pattern.
This story exemplifies the severe repercussions that can follow a criminal tax investigation and prosecution. If you have unfiled returns, unpaid liabilities, or have transferred property that the government could view as a concealment tactic, do not wait for an IRS-CI knock at the door. Contact a seasoned dually-licensed tax attorney-CPA to ensure that your rights are protected and that you can get ahead of any tax matter that could result in a negative IRS or Department of Justice interaction.
