According to a Department of Justice press release, a Wisconsin dentist was recently convicted on four counts of tax evasion by a federal jury sitting in Madison. This story exemplifies a situation where a taxpayer’s underlying tax was not in dispute, but rather, what can happen when a taxpayer takes evasive actions after their tax liability was established. It is also a good reminder that whether the IRS has just informed you that they will be examining your tax return or if you have an established tax liability that you are unable to pay, it is generally in your best interest to consult with an experienced tax defense attorney.
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Court documents reveal that Frederick Kriemelmeyer, a 70 year-old dentist from La Crosse, Wisconsin was ordered to pay over $135,000 in federal taxes by a U.S. District Court in 2007. These taxes related to unpaid income taxes in prior periods. Kriemelmeyer failed to make any payments after the court order and as many will likely guess, his tax liability ballooned with additional interest and penalties. By 2012, Kriemelmeyer’s balance due at the IRS was over $450,000.
The defendant took various actions intended to prevent the IRS from being able to collect the amount that he owed. The Department of Justice presented evidence at trial to show that Kriemelmeyer directed his dental patients to pay him by cash or check, instead of through traditional medical and dental office billing channels. Kriemelmeyer also failed to file a tax return for the 2013 through 2015 tax years. Finally, the defendant made efforts to pay for his personal expenses with cash in order to avoid detection by the IRS.
Kriemelmeyer will be sentenced later this spring. He faces up to five years in prison for each count of tax evasion. Additionally, Kriemelmeyer will likely be ordered to serve a term of supervised release. Finally, he will also likely be ordered to pay restitution to the IRS for the taxes that he already owed, plus interest and penalties.
As we indicated in the introduction to this story, Mr. Kriemelmeyer’s situation could have been avoided. Considering that at the end of 2007, his tax liability was established, he could have worked with an experienced tax attorney to develop and implement a workable repayment plan. As a general matter, continuing to lie to the IRS about the source or amount of your income while in collections is not advisable.
Whether you have recently received a notice that the IRS or state tax authorities will be examining your tax return or if you already owe taxes but are not sure what to do next, an experienced tax attorney is the best resource to help you remedy the situation. There are a multitude of programs and strategies that can be employed by you and your legal team to come into compliance or to work out a payment plan that works for you.
The tax and accounting professionals at the Tax Law Offices of David W. Klasing have extensive experience representing a diverse group of taxpayers. From individuals to middle market businesses and beyond, our team of zealous advocates will assist in the development of a strategy to help you reach your specific goals and objectives. Whether you are under a tax examination or are in need of tax planning advice, contact the Tax Law Offices of David W. Klasing today, online or by phone at (800) 681-1295, for a reduced-rate consultation.
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Note: As long as a taxpayer that has willfully committed tax crimes self-reports the tax fraud (including a pattern of non-filed returns) through a domestic or offshore voluntary disclosure before the IRS has started an audit or criminal tax prosecution, the taxpayer can be successfully brought back into tax compliance and receive a nearly guaranteed pass on criminal tax prosecution and simultaneously receive a break on the civil penalties that would otherwise apply. It is imperative that you hire an experienced and reputable tax defense attorney to take you through the voluntary disclosure process. As uniquely qualified and extensively experienced Criminal Tax Defense Tax Attorneys, Kovel CPAs and EAs, our firm provides a one stop shop to efficiently achieve the optimal and predictable results. See our Testimonials to see what our clients have to say about us!
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