The facts are clear: if you are hiding income, you will eventually get caught by the IRS. Increases in audits and IRS criminal investigations are leading to more tax cheats paying for financial crimes (often with hefty prison sentences) for tax fraud, identity theft, and offshore tax evasion like never before. Nonetheless, there will be people that throw caution to the wind and attempt to game the tax system. Here are a few stories about those who tried and failed:
Virginia Man Receives 48 Month Prison Sentence for Tax Charges – Following a jury trial, James Bowers Johnson, 47, of Winchester, Va., was found guilty of one count of obstructing the Internal Revenue Service and three counts of willfully failing to file personal tax returns for three years. It appears that between 1999 and 2007, Johnson attempted to conceal more than $1.4 million in income. For his tax crimes, Johnson was sentenced to 48 months in prison.
Louisiana Man Found Guilty of Failing to Pay – Larry Wayne Bruce, 61, of Leesville, Louisiana, received a five-year prison sentence for failing to pay corporate payroll taxes while he was working as the financial officer for Express Marketing Inc. in Leesville from 2003 to 2007.
According to court records, Bruce admitted to the following:
- He was responsible for not paying payroll taxes owed
- The owners relied on him to pay the payroll taxes withheld from employee paychecks
- He stole more than $190,000 from the company during the time he failed to pay the taxes.
For those still not convinced of the increased collection trend, here are some statistics from an IRS report you need to be aware of
- In 2008, nearly 1.4 million Americans were audited and the IRS collected $56.4 billion in revenue. This is a $7.7 billion increase from 2006 and only slightly below 2007′s banner year of $59.2 billion.
- Curbing offshore tax evasion is a huge government priority. Since 2009, increased collection from unreported offshore accounts has yielded roughly $5.5 billion in unpaid taxes and IRS penalties.
- The IRS is doing more with less – Amazingly, the agency has been able to increase tax revenues in spite of the fact there being fewer enforcement staff members. For example, in 2008, there were 20,722 compared to 22,543 in 2007. This means that the government is becoming more efficient AND more aggressive about going after tax dollars to fill its coffers.
Don’t give the IRS a reason to further “examine” your tax returns in an audit. Make sure you emphasize tax compliance and audit prevention above all.
If you do, however, find yourself facing an IRS or state tax audit, it’s not in your best interest to go it alone. Your best defense is to hire a qualified tax audit specialists for audit representation. These IRS problem solvers will be in your corner every step of the way to help you achieve permanent tax relief and greater peace of mind.
