From the Tax Law Offices of David W. Klasing - Texas Man Charged with Failing to Report Large Cryptocurrency Gains

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Tax Law Offices of David W. Klasing, PC

May 30, 2024, 06:37 ET

IRVINE, Calif., May 30, 2024 /PRNewswire/ -- According to a Department of Justice press release, a Texas man was recently federally charged after prosecutors alleged that he failed to report a large cryptocurrency gain. This story should remind taxpayers that whether income results from wage income or selling assets (including cryptocurrency), it must be reported for state and federal tax purposes. If you have failed to file a tax return for one or more years or have failed to report the proper amount of income on a filed tax return, you should consult with an experienced tax defense attorney to determine how to get right with the government and come into tax compliance without facing criminal tax charges.

What is it about cryptocurrency that's so likely to get me either audited or criminally investigated?

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 multiple years of non-reported cryptocurrency income possibly 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 liberty and your net worth. See our Testimonials to see what our clients have to say about us!

Defendant Accused of Underreporting Large Crypto Gains

Court documents reveal that Frank Richard Ahlgren III, from Austin, Texas, was recently charged for allegedly filing false tax returns and for structuring cash deposits to circumvent currency transaction reporting requirements. This indictment was handed down by a federal grand jury, calling into question activities between 2017 and 2019 where Ahlgren underreported or failed to report the sale of bitcoin valued at $4 million, despite realizing substantial taxable capital gains from the transactions.

Tax regulations mandate the disclosure of all sales proceeds, including gains or losses, from cryptocurrency transactions on tax returns. In 2017, Ahlgren is accused of using proceeds from selling approximately $3.7 million in bitcoin to buy a home, yet filed a tax return for that year that falsely inflated the original purchase price of the bitcoin. This manipulation allegedly allowed him to underreport the capital gain realized from this sale. Furthermore, in the subsequent years of 2018 and 2019, Ahlgren allegedly sold over $650,000 worth of bitcoin without reporting these transactions on his tax returns.

Additionally, Ahlgren is charged with structuring a series of bank deposits in amounts under $10,000 after selling bitcoin for cash. This strategy was purportedly employed to evade the banking system's currency transaction reporting requirements, which kick in for deposits exceeding $10,000. Ahlgren could face up to five years in prison for each count of structuring and up to three years for each count of filing a false tax return.

Getting Right with the Government

This case is a significant reminder of the legal obligations to accurately report financial gains from cryptocurrencies and other transactions. If you have filed a tax return that you know to have been false, or have failed to file a tax return for one or more years, it is in your best interest to contact an experienced tax defense lawyer to determine the best way to bring you into tax compliance while keeping your physical and financial freedom top of mind.

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 business is too. Contact the Law Offices of David W. Klasing today to discuss your business with one of our professionals.

In addition to our fully staffed main office in downtown Irvine California, the Tax Law Offices of David W. Klasing has unstaffed (conference room only) California based satellite offices in Los Angeles, San Bernardino, Santa Barbara, Panorama City, Oxnard, San Diego, Bakersfield, San Jose, San Francisco, Oakland, Carlsbad, Sacramento. We also have unstaffed (conference room only) satellite offices in Las Vegas Nevada, Salt Lake City Utah, Phoenix Arizona & Albuquerque New Mexico, Austin Texas, Washington DC, Miami Florida and New York New York that solely handle Federal & California Tax issues.

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