From the Tax Law Offices of David W. Klasing -Georgia Man Pleads Guilty to $25m Tax Scheme

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Tax Law Offices of David W. Klasing, PC

Apr 18, 2023, 06:37 ET

IRVINE, Calif., April 18, 2023 /PRNewswire/ -- According to a Department of Justice press release, a Georgia man recently pleaded guilty to multiple federal counts related to developing and carrying out a nationwide tax refund scheme. This story should remind taxpayers who have filed one or more federal income tax returns with false information that the IRS and Department of Justice do not take kindly to tax fraud. If you have failed to file a tax return for one or more years, or have filed a tax return that was knowingly false, it is in your best interest to contact an experienced tax defense attorney to determine your options to come into tax compliance.

Why you should use an Attorney to represent you in an audit

Defendant and Co-Conspirators Claimed False Tax Refunds on Behalf of Unknowing Taxpayers

Court documents reveal that Iran V. Backstrom of Milledgeville, Georgia developed and worked with other defendants to carry out a tax refund scheme. The scheme, which was promoted across the country, falsely advertised that taxpayers were due large amounts of tax refunds based on their home mortgages and other debts. After convincing unsuspecting taxpayers to sign up, the defendant and co-conspirators filed false tax returns in the names of the participants claiming more than $25 million in false refunds.

The tax returns filed by the co-conspirators on behalf of the scheme participants claimed that banks and other financial institutions had withheld large sums of money from payments made to scheme participants. In a further attempt to perpetuate the scam, the defendant and co-conspirators filed phony withholding documentation purporting to be from the banks and other financial institutions mentioned above.

Backstrom will be sentenced later next year. He faces up to five years in prison for conspiring to defraud the United States, three years in prison for each count of aiding and assisting the preparation of the filing of a false tax return, and three years for each count of filing a false tax return. In addition to physical incarceration, the defendant also faces a period of supervised release. Lastly, the defendant may be ordered to pay restitution to the IRS representing tax-loss that he and his co-conspirators caused.

How to Handle Tax Non-Compliance

Although the scheme described above likely does not represent the lion's share of criminal wrongdoing with regard to tax compliance, it does provide some insight and a flavor of the potential outcomes for those who willingly violate federal tax laws. While the IRS continues to fight for increased funding to hire additional enforcement agents, the technological growth at the Service has allowed the service to continue to identify those who have failed to comply with federal tax laws with much ease. As the government's focus on revenue collection and budget increases during the COVID-19 pandemic, the pressure on the IRS to weed out and prosecute criminal tax offenders only grows.

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 liberty and your net worth. See our Testimonials to see what our clients have to say about us!

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 main office in Irvine, the Tax Law Offices of David W. Klasing has unstaffed (conference room only) satellite offices in Los Angeles, San Bernardino, Santa Barbara, Panorama City, Oxnard, San Diego, Bakersfield, San Jose, San Francisco, Oakland, Carlsbad and Sacramento.

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Public Contact: Dave Klasing Esq. M.S.-Tax CPA, [email protected]

SOURCE Tax Law Offices of David W. Klasing, PC