September 14, 2011
$2.4 million in tax evasion gets Texas man 30 months
Successful entrepreneurs are gifted at growing a business, but they are not always knowledgeable in how to handle money correctly. That lack of expertise can lead to mistakes and problems with tax authorities. When tax avoidance is discovered, whether it was done by mistake or intentionally, years of hard work spent to build a thriving company can be threatened.
Recently a San Antonio man was sentenced to 30 months in a federal penitentiary for evading $2.4 million in taxes. The man ran a successful home framing business, earning between $1.5 million and $4.4 million per year. But an Internal Revenue Service (IRS) probe resulted in the decimation of his thriving business.
Authorities claim he was structuring his finances for the purpose of tax avoidance. He was accused of writing checks for less than $10,000 to relatives and others, which were then negotiated, with the cash returned to the businessman. He then supposedly used the cash to pay himself and subcontractors without keeping records. The IRS also says he allegedly used those funds for personal expenditures, including online gambling.
Any taxpayer facing an IRS probe must focus careful attention on every detail. Not every IRS investigation turns into a criminal matter, though any person facing an audit will want to do whatever is reasonably possible to avoid penal consequences. The tax code is complex and can seem contradictory. A Texas attorney experienced in handling business tax matters at all levels of investigation may be able to help people prepare and map out a strategy to present an effective and meaningful response to any inquiry and, if necessary, a strong defense against formal charges.
Source: San Antonio Express-News, “Home framer gets prison for $2.4 million tax evasion,” Guillermo Contreras, Jul. 29, 2011