Although the deadline for filing individual tax returns for the 2017 tax year has passed, there are still many individuals and businesses that are not compliant with regard to their tax filing obligations. The post below details the story of a Wisconsin businessman who was responsible for his company’s failure to live up to its tax obligations under federal law. With the scrutiny of the government’s budget and cash collection at an all-time high, the IRS is bringing the hammer down on taxpayers that they discover have not been filing or paying taxes in a timely manner.
According to a Department of Justice press release, Thomas G. Paine, of Johnson Creek, Wisconsin, was sentenced to serve a year and a half in a federal prison for tax evasion. Paine served as the Vice President and Treasurer of G.W. Paine Inc, a Wisconsin produce company. Paine was responsible for the finance and tax functions of the business.
Prosecutors proved that Paine failed to file business tax returns or pay business tax for the business from tax years 1997 through 2012. To avoid detection by government officials, Paine deposited money in nominee bank accounts in amounts under $10,000. Under federal law, banks are required to notify the government of cash deposits in amounts greater than $10,000. Paine admitted to causing a tax loss of between $250,000 and $500,000.
At sentencing, Paine was ordered to serve 18 months in a federal prison. Additionally, U.S. District Court Judge James D. Peterson sentenced Paine to serve an additional 2 years of supervised release once he is released from prison and pay restitution in the amount of approximately $421,622.
Although it is settled law that a taxpayer may engage in tax avoidance planning to decrease the amount of what otherwise would be his taxes through legal means, tax evasion remains illegal and one of the largest contributors to uncollected tax revenue. Federal law dictates that “any person who willfully attempts in any manner to evade or defeat any tax” shall be guilty of a felony. Those who find themselves convicted of tax evasion can be sentenced to up to five years in prison and face a fine up to $100,000 for each count. Additionally, taxpayers convicted of tax evasion are typically ordered to pay restitution to the IRS or state taxing authority for the amount of tax revenue that was not collected.
An experienced tax attorney will work with you at the first sign of trouble, typically a notice that the IRS will be examining your return where you are dealing with an “egg shell audit”. On many occasions, taxpayers believe that they have the ability to represent themselves in an audit. Going into a meeting with the IRS or state taxing authority without legal representation can result in the taxpayer providing more information (including statements and documentation) than is constitutionally protected by law, almost all of which can be used against the taxpayer in a subsequent criminal tax prosecution.
The tax and accounting professionals at the Tax Law Offices of David W. Klasing have represented countless taxpayers in a vast amount of different civil and criminal tax situations. Whether you haven’t filed a tax return in several years and are trying to determine the best way to get caught up or if you have been notified that you will be the subject of a tax examination or criminal tax investigation, our zealous advocates are standing by to help protect you. Do not let the threat of an audit, examination or criminal tax investigation with a possibility of subsequent criminal tax prosecution keep you awake at night. Contact the Tax Law Offices of David W. Klasing today for a reduced-rate consultation.
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