Tax Crimes

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

The government can only bring criminal charges against a nonfiler within six years of the date the tax return was due. For example, after April 15, 2008, you can’t be prosecuted for failing to file a 2008 tax return that was due on April 15, 2002.

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:

  1. owed substantial income tax in addition to the tax liability which he reported on his income tax return;
  2. intended to evade and defeat the assessment of a tax;
  3. committed at least one affirmative act in furtherance of this intent; and
  4. 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.