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December 18, 2012


Probation and restitution ordered in Texas tax fraud case

Tax evasion charges often come in connection with charges of other financial crimes. In a recent Texas case, authorities alleged that an electrician submitted fraudulent invoices to overbill the Beaumont school district. Prosecutors also charged the man with failing to pay federal income taxes.

The overbilling accusations were for a substantial amount. Authorities claimed that the overbilling for electrical wiring work was nearly $1.6 million.

Last July, a federal jury couldn’t agree on a verdict on the fraud charge concerning the electrical work. Federal prosecutors were preparing a retrial in July when the electrician pleaded guilty to tax fraud. His sentencing was last week.

Under the terms of the plea agreement, the electrician will be placed on probation for five years. He could potentially have received a one-year prison term.

The plea agreement terms also included a requirement for the electrician to make restitution payments. The amount was set at over $660,000.

Even without allegations of overbilling, independent contractors and business owners can get in trouble with the IRS for neglecting to report all of their income. Year after year, this is a common fact pattern for tax litigation attorneys.

It can be hard for individuals and small business owners to keep up with all of the necessary paperwork needed to track their income accurately. Sometimes the IRS doesn’t understand that reality the way it should.

In the case of the Beaumont electrician, however, the issues apparently went beyond inadvertent underreporting of income. The consequences – five years on probation and $660,000 in restitution – were significant.

Source: “Beaumont electrician gets probation for tax fraud,” Bryan-College Station Eagle, 12-12-12

Our firm handles situations similar to those discussed in this post. To learn more about our practice, please visit our Texas tax evasion page.

Tax Crimes