Philip M. Falco, Attorney, CPA (303) 626-7000
We represent taxpayers charged with Tax Crimes or under investigation for Tax Crimes.
If you are under audit or have many years of unfiled tax returns, your case could, and hopefully does not, lead to a tax crimes investigation. It is so important to engage us at this stage to: (1) secure the attorney-client privilege, (2) become knowledgeable of your finances and the matters under investigation, and (3) become proactive in the handling of your case with the IRS.
If you are concerned about being accused of tax fraud or tax evasion, call us. You have a constitutional right to be represented by an attorney and you should exercise it. As a CPA as well as an attorney, we have deep understanding of tax law. This is what your case requires.
It is important for taxpayers with many years of unfiled tax returns to get compliant with the IRS and Colorado Department of Revenue. Tax evasion is a serious matter and taxpayers would want to avoid being placed in this category.
As Philip Falco is both a CPA and an Attorney, he can directly assist you in becoming tax compliant. While working on your compliance, he will provide you with representation before the IRS and CDR.
This is the necessary one-two punch your case requires. It is critical for your Tax Attorney to become knowledgeable about your books and accounting for the years in question. It provides more forceful representation and conclusion of your case.
*Depending on the depth of the matter, the investigation can spill over to other federal agencies.
Typical Tax Evasion Charge in a Criminal Case
A typical tax evasion charge reads as follows:
“The defendant willfully attempted to evade and defeat income tax due and owing by him to the United States of America by concealing and all proper officers of the United States of America his true and correct income.” Then specific acts are itemized, such as failure to file, and failure to disclose income to tax preparer, The statute is then cited as typically 26 USC 7201.
26 USC 7201 provides as follows:
“Any person who willfully attempts in any manner to evade or defeat any tax imposed by this title or the payment thereof shall, in addition to other penalties provided by law, be guilty of a felony and, upon conviction thereof, shall be fined not more than $100,000 ($500,000 in the case of a corporation), or imprisoned not more than 5 years, or both, together with the costs of prosecution.”
Typically three elements are present:
- An attempt to evade or defeat tax,
- A substantial amount of tax due and owing (typically hundreds of thousands), and
- Willfulness – typically multiple affirmative acts of evasion are present such as failure to report income from transactions (asset sales etc), failure to report income from cashed checks.
Sentencing is governed by 18 USC 3553. Sentencing can be increased for:
- Failure to report exceeds $10,000 in any year from criminal activity.
- Offenses could involve “sophisticated means”.
- Tax loss amount sets base level, So a tax loss between $200,000 and $400,000 sets the base amount at level 16.
- Defendant gets a reduction for acceptance of responsibility and intent to enter plea of guilty (in settled cases).
Defendant’s passport might be required to be surrendered or restricted. Judge then sets prison term (2 years?) and probation term (3 years?).
Failing to File Tax Returns
If you are under audit or have many years of unfiled tax returns, your case could, and hopefully does not, lead to a tax crimes investigation. It is so important to engage us at this stage to: become knowledgeable of your finances and the matters under investigation, and become proactive in the handling of your case with the IRS.
It is important for taxpayers with many years of unfiled tax returns to get compliant with the IRS and Colorado Department of Revenue. Tax evasion is a serious matter and taxpayers would want to avoid being placed in this category.
As Philip Falco is both a CPA and an Attorney, he can directly assist you in becoming tax compliant. While working on your compliance, he will provide you with representation before the IRS and CDR.
This is the necessary one-two punch your case requires. It is critical for your Tax Attorney to become knowledgeable about your books and accounting for the years in question. It provides more forceful representation and conclusion of your case.
If you are under audit by the IRS or CDR and worry about what might be found, you should contact us immediately. The attorney-client privilege protects you during this sensitive process.
Depending on the depth of the matter, the investigation can spill over to other federal agencies.
Unfiled Tax Returns
Failure to file FBAR
Failure to file FBAR can result in a 5 year criminal sentence. If you have failed to file an FBAR please read about our representation in the Offshore Voluntary Disclosure Program.
Omitting income from the foreign accounts on tax returns and intentionally failing to mark the box in Schedule B indicating an interest in a foreign bank account. Willfully failing to file FBARs to report interest in the foreign accounts.
A taxpayer waives the attorney-client privilege if taxpayer asserts that based on the advice of counsel taxpayer did not file FBAR. This is VERY DANGEROUS. If taxpayer received legal advice not to file an FBAR, using that as a defense must be weighed against waiving the attorney-client privilege. Once the privilege is waived, it is typically waived in all respects.
The FBAR filing requirements are outlined in 31 C.F.R. § 103.24.
Tax Evasion
The statute of Tax Evasion is as follows: 26 U.S.C. § 7201. Attempt to evade or defeat tax. Any person who willfully attempts in any manner to evade or defeat any tax imposed by this title or the payment thereof shall, in addition to other penalties provided by law, be guilty of a felony and, upon conviction thereof, shall be fined not more than $100,000 ($500,000 in the case of a corporation), or imprisoned not more than 5 years, or both, together with the costs of prosecution.
To prove a violation of § 7201, the government must show that taxpayer:
- owed substantial income tax in addition to the tax liability which he reported on his income tax return;
- intended to evade and defeat the assessment of a tax;
- committed at least one affirmative act in furtherance of this intent; and
- acted willfully, that is, with the voluntary intent to violate a known legal duty
In addition to showing willfulness and an affirmative act constituting an evasion, the government must prove beyond a reasonable doubt the existence of a tax deficiency to establish tax evasion. The deficiency must be substantial.
Tax evasion or fraud cases are typically brought against taxpayers who have actively under reported income, concealed assets, or engaged in illegal activities.