75 Percent Civil Tax Fraud Penalty Imposed on Dentist On Top of Criminal Tax Evasion Sentence

The United States Tax Court has upheld the tax evasion. In December 2005, David W. Goldston was sentenced to 48 months in prison and three years’ supervised release. He was also ordered to cooperate with the IRS in determining outstanding taxes, interests and penalties. He didn’t, and ultimately his case wound up in Tax Court where his tax fraud, and other civil penalties, plus interest, the total due will be in excess of $2 million. The Tax Court accepted the IRS arguments that Goldston concealed income by placing funds and property in the names of nominees and trusts, and by using cashier’s checks, money orders and cash to conduct transactions. The Tax Court listed a number of so-called badges of tax fraud, including pattern of failure to file returns, failure to report substantial amounts of income, concealing assets dealing in cash, failing to maintain records, giving implausible or inconsistent explanations of behavior, and failure to cooperate with taxing authorities in determining petitioner’s correct liability.

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