IRVINE,
Calif., Aug. 27, 2024 /PRNewswire/ -- According to
a Department of Justice press release, a Connecticut man recently pleaded guilty to tax
evasion on income that he earned engaging in a fishing operation.
This story details the potential consequences that a taxpayer can
face if they intentionally violate federal income tax laws. If you
have failed to file a tax return for one or more years, or have
filed a tax return that is false, you should contact an experienced
tax attorney to determine the best way for you to come into
compliance and avoid some of the negative repercussions that the
defendant in the below case will surely face.
Defendant Earned Significant Fishing Income, Failed to Income
it On His Tax Return
Court records reveal that Brian
Kobus of Durham,
Connecticut, pleaded guilty to evading taxes on $1.4 million earned as a commercial fisherman
from 2011 to 2013 and 2017 to 2021. Kobus did not file federal
income tax returns or pay the taxes that he owed, instead cashing
his paychecks and using the cash to fund his lifestyle. The illegal
activity resulted in a tax loss of over $375,000.
Kobus faces a maximum penalty of five years in prison on the tax
evasion charge and will be sentenced later this year. Additionally,
Kobus could be ordered to serve a period of supervised release that
would commence upon the completion of any physical incarceration.
Finally, he could be ordered to pay restitution to the government,
representing the amount of tax loss that he caused.
Understanding the Severe Penalties for Tax Evasion
This case highlights the severe consequences of tax evasion.
Kobus's activity resulted in legal proceedings and will very likely
result in time spent in a federal prison. The penalties emphasize
the importance of compliance with federal and state tax laws and
the serious consequences of attempting to evade them.
This case entails exposure that can ramp up simple misdemeanor
non filing to felony tax evasion. The "Spies evasion" doctrine is,
essentially, one of the ways of committing tax evasion. It is a
legal theory that finds a taxpayer criminally liable when he
willfully (1) fails to file a tax return, and (2) his action is
coupled with an "affirmative act of evasion," like actively
concealing or misleading the government.
In Spies the Supreme Court identified at least
seven examples of conduct that constituted affirmative acts of
evasion. The Court stated: [We] "think [the] affirmative willful
attempt may be inferred from conduct such as [1] keeping a double
set of books, [2] making false entries of alterations, [3] or false
invoices or documents, [4] destruction of books or records, [5]
concealment of assets or covering up sources of income, [6]
handling of one's affairs to avoid making the records usual in
transactions of the kind, and [7] any conduct, the likely effect of
which would be to mislead or to conceal." Spies v.
United States , 317 U.S.
492, 499 (1943).
What is an "affirmative act" for purposes of
the Spies evasion doctrine? It may be any number of
things, including but not limited to, making a false statement to
the IRS, either oral or written. Importantly, the statement could
be made before, after, or at the same time as filing the tax
return. Thus, for example, a taxpayer makes an "affirmative" act of
evasion after failing to file his income tax return when he lies to
the IRS about how much income he earned. Accordingly, a taxpayer's
lying about earnings could also earn him jail time-and heavy
penalties.
If you have fallen out of tax compliance, it is crucial to seek
assistance from an experienced attorney. A knowledgeable tax lawyer
can help navigate the complexities of the tax law system, develop a
strategy to address outstanding issues, and work towards getting
right with the government.
Getting Back Into Compliance Without Facing Criminal Tax
Prosecution Where You Have a Long History of Blatantly Cheating /
Non Filing
If you have failed to file a tax return for one or more years or
have taken a position on a tax return that could not be supported
upon an IRS or state tax authority audit, eggshell audit, reverse
eggshell audit, or criminal tax investigation, it is in your best
interest to contact an experienced tax defense attorney to
determine your best route back into federal or state tax compliance
without facing criminal prosecution.
Note:
As long as a taxpayer that has willfully
committed tax crimes (potentially including non-filed foreign
information returns coupled with affirmative evasion of U.S. income
tax on offshore income) self-reports the tax fraud (including a pattern of non-filed returns) through
a domestic or offshore voluntary disclosure before the IRS
has started an audit or criminal tax investigation /
prosecution, the taxpayer can ordinarily be successfully
brought back into tax compliance and receive a nearly guaranteed
pass on criminal tax prosecution and simultaneously often
receive a break on the civil penalties that would otherwise
apply.
It is imperative that you hire an
experienced and reputable criminal tax defense attorney to take
you through the voluntary disclosure process. Only an Attorney
has the Attorney Client Privilege and Work Product
Privileges that will prevent the very professional that you
hire from being potentially being forced to become a witness
against you, especially where they prepared the returns that
need to be amended, in a subsequent criminal tax audit,
investigation or prosecution.
Moreover, only an Attorney can enter you
into a voluntary disclosure without engaging in the unauthorized
practice of law (a crime in itself). Only an Attorney trained
in Criminal Tax Defense fully understands the risks and rewards
involved in voluntary disclosures and how to protect you if you do
not qualify for a voluntary disclosure.
As uniquely qualified and extensively
experienced Criminal Tax Defense Tax Attorneys, Kovel CPAs and EAs,
our firm provides a one stop shop to efficiently achieve the
optimal and predictable results that simultaneously protect your
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We Are Here for You
Regardless of your business or
estate needs, the professionals at the Tax Law Offices of
David W. Klasing are here for you.
We are open for business and our team will help ensure that your
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Public Contact: Dave Klasing Esq.
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