Articles Posted in Tax Debt

As many tax controversy attorneys can state, tax problems can lead to major issues including a tax audit and even criminal tax charges. Even though tax problems are typically serious matters there are certain tax crimes that stand out even among serious offenses. Tax Evasion and tax fraud involving the use of stolen identities and stolen personal information is not only one of those crimes that can be punished particularly severely, it is also a major enforcement focus for both the Department Of Justice and the IRS. Taxpayers facing tax fraud or tax evasion charges should consult a tax lawyer before admitting anything to federal agents or prior to taking any action on the tax problem.

Queen of Tax Fraud Likely to Spend Decades in Prison

In a widely-reported tax conviction, Rashia Wilson was sentenced to more than two decades in prison due to her part in an identity theft and tax fraud scheme. While tax sentences are often harsh, this sentence stood apart in severity perhaps due to her other weapons charges, and her apparent propensity to brag and challenge law enforcement officials over social media. In one online posting, Ms. Wilson wrote:

If you are living in the United States it can be difficult to miss the numerous announcements and pronouncements of the impending April 15th tax deadline. And yet, every year thousands of US taxpayers will fail to file and pay taxes.

There are a variety of reasons for this failure. These reasons can include situations where the taxpayer simply doesn’t want to pay tax and is concealing income. In other circumstances the taxpayer may know that he or she would be unable to pay and thought that concealing income by not filing would help their tax situation. In still other circumstances the taxpayer may be a young person who simply did not realize that he or she had a filing obligation or the severity of consequences that can follow a failure to report and pay taxes.

While taxpayers could have filed IRS form 4868 prior to the tax deadline to extend their filing deadline by 6 months to October 15, 2015, those who failed to file or extend by the original filing date no longer have this option. However there may be options to correct the tax problem and to come back into compliance with the tax system.

The Wisconsin owner of several self-help and life development companies received a rather jarring wake-up call when he was convicted on tax crimes and sentenced to a year in federal prison. Eric T. Plantenberg had failed to file taxes for ten years from 2000 to 2010 after he began subscribing to the views of the Church of Compassionate Service. According to court documents the Church of Compassionate Service is a group that advances frivolous tax arguments, chiefly to individuals who are receptive to an anti-tax or anti-government message. Arguments related to and reminiscent of the group’s anti-tax position have been determined to be clearly frivolous by the courts since at least the early 1980s.

What did the tax scam consist of?

It is not uncommon for those promoting tax scams or frivolous tax arguments to associate their argument with a fundamental right and legitimate tax structures. Such an approach can give the frivolous tax argument an air of legitimacy by association and the strength of the fundamental right can cause a layperson to have questions about the extent of rights such as the freedom of speech or religion. In the case of the Church of Compassionate Service, their argument was that a taxpayer could take a religious oath of poverty and become “minister” in their organization. The minister’s income would then flow into the church, operating as a “corporation sole”, thereby relieving the “ministers” of any income, and thus, the obligation to pay or file taxes. The church would then return the money to the “ministers”. The church did not hold religious service or otherwise have any members beyond the “ministers”.

Each and every year April 15th brings fear and dread for millions of Americans who fear that they will face a hefty tax liability. Some may even choose to put off the filing by requesting an extension prior to the filing deadline, but the fact remains that the tax will have to be reported and paid at some point. However, for some, their tax return may contain an unexpected surprise: a significant tax refund.

But, if you didn’t expect to receive anything back or if you expected to have to pay, proceed with caution. The refund may be the product on an IRS error. Although the original mistake may be the fault of the IRS, you can still face an audit and other serious tax consequences.

Why are tax refunds issued?

While many people think that a criminal tax situation is something that cannot happen to them unless they had the intent to defraud the government, the truth is that criminal tax charges can be triggered by even a slight misstep. Mistakes on your taxes that are perceived as willful misstatements by an IRS agent, and accountant or tax preparer malpractice are but a couple of the common ways that well-meaning taxpayers find themselves facing serious criminal penalties including a federal prison sentence.

In short, the things an average person does not know about tax law or tax crimes can hurt them when faced with an IRS audit or criminal investigation. A tax lawyer can help a taxpayer by providing context for any actions or inactions that might be misinterpreted by the agent, and negotiate a more favorable outcome.

Indicators of Tax Fraud