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What is at Stake if You Have Been Contacted by IRS Criminal Investigation?


Posted in on February 27, 2020

IRS Criminal Investigation (CI) is the division of the Internal Revenue Service that is tasked with targeting individuals suspects of committing federal tax crimes. It is extremely active, and each month CI announces dozens of indictments, guilty pleas and sentences in cases involving ordinary taxpayers. Contact Maryland criminal tax attorney Kevin E. Thorn, Managing Partner at Thorn Law Group today for help with your case.

Here is just a small sampling of the cases that CI prosecuted in February 2020:

1. Tax Preparer Sentenced to Prison for Falsifying Clients’ Returns

A tax preparer was sentenced to 90 months in prison followed by three years of supervised release for falsifying tax returns, resulting in a tax loss for the United States in excess of $3.5 million. According to CI, the tax preparer falsified his clients’ tax returns, “by reporting fictitious business losses and education credits in order to fraudulently inflate their refunds.” Critically, while CI targeted the tax preparer in this particular case, under federal law taxpayers remain responsible for the contents of their returns even if they hire someone else to prepare them.

2. Business Owner Sentenced to Prison for Federal Tax Fraud

A business owner was sentenced to six months in prison, three years of supervised release and a $10,000 fine after pleading guilty to charges of failing to pay employment taxes and filing false tax returns. According to CI, the business owner improperly calculated the wages paid to certain employees and failed to file W-2s for others. In connection with these fraudulent practices, the business owner also paid many of his employees in cash without collecting and remitting employment taxes to the IRS, and he filed false personal income tax returns for three years resulting in total tax losses in excess of $1 million.

3. Economist Pleads Guilty to Filing False Income Tax Return, Faces Three Years in Prison and Financial Penalties

The former chief economist for the Center for the Advancement of Science in Space (CASIS) pled guilty to filing a false income tax return and is now facing up to three years in federal prison. According to CI, the individual admitted to underreporting his income by approximately $210,000 and fraudulently deducting more than $50,000 in business expenses. In addition to prison time, the individual is also facing liability for past-due taxes, interest, and penalties.

4. Taxpayer Admits to Fraudulently Concealing Income from the IRS, Agrees to Pay $1.3 Million in Restitution and Faces Prison Time

A taxpayer pled guilty to concealing more than $435,000 in income from the IRS by funneling his employment income and investment dividends through a limited liability company. As a result of the plea, the taxpayer will pay $1.3 million in restitution to the IRS and is currently facing up to five years of federal imprisonment.

Contact Maryland Criminal Tax Attorney Kevin E. Thorn

If you have been contacted by IRS Criminal Investigation, you must engage experienced tax counsel promptly in order to mitigate your risk of facing types of penalties discussed above. To schedule a confidential consultation with Maryland criminal tax attorney Kevin E. Thorn, Managing Partner, Thorn Law Group, call 202-349-4033 or request an appointment online now.

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