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September 16, 2016


Collateral consequences flow from tax fraud charges

Tax law is complex. Only a handful of people fully understand it and taxes are often controversial. While they pay for various services, who pays and how much are tricky policy questions. Tax laws, like any laws are violated for various reasons. Sometimes, the violations are motivated by greed, but it isn’t always that simple.

While there may be criminal charges if someone is accused of tax fraud or tax evasion, in some cases it is the civil penalties that hit the hardest. They can impact far more than a single person’s life. In this post, we illustrate some of these cascading consequences.

Success in the restaurant business and tax issues

A Mexican citizen and legal resident of the United States was accused of failing to report more than $600,000 in income from 2008 through 2012. This was not his total earnings from his Michigan restaurants. Presumably, he paid taxes on the amount that was reported. However, he was convicted of tax fraud and assessed $370,000 in back taxes based on the unreported income – more than half the unreported amount.

In addition, he was sentenced to a year in prison. But because of the collateral consequences that are waiting for him when he gets out of prison, he’s not done yet. When he gets out of prison he is slated to be deported. This has the potential to not only affect his family, but the employees that work in restaurants he owns in three states.

Punishment past rehabilitation

A collateral consequence is one that goes beyond the period of rehabilitation and hinders a person’s future opportunities. Whatever mistakes the restaurant owner made, he may have never recognized that a tax issue could lead to deportation.

Collateral consequences aren’t limited to immigrants.

The professional careers of US citizens can be cut short by a charge or conviction for tax-related crimes. Often it is impossible to repair a damaged reputation. Loss of a professional license is a common penalty as well.

Tax fraud and tax evasion are terms that lend themselves to quick judgment without knowing all the facts. An attorney will complete an independent investigation to learn the full story and build the strongest possible defense. When federal white collar charges include tax fraud or evasion charges it is essential to speak with a criminal tax defense attorney.

Tax Crimes