Woman pleads guilty to federal tax evasion, sentencing to follow

A Texas woman is free on bond prior to sentencing after pleading guilty to federal tax charges. The charges of tax evasion carry a maximum sentence of $750,000 in fines and 15 years in prison. The woman owes the Internal Revenue Service $239,300.

The woman owned and operated a day care center in Wichita Falls, Texas, and admitted that she intentionally failed to file tax returns to avoid paying taxes. She allegedly engaged in behavior to disguise her income by using large amounts of cash and funneling payments through money orders rather than her business’ bank account. All of this purportedly occurred despite her child care center receiving subsidies from two separate federal programs, one to subsidize child care for low-income families, and the other to help provide meals for children.

The potential for large fines — in this case more than three times the amount she owes in taxes — and jail time illustrates what can happen when someone falls behind on their taxes and doesn’t address it promptly. Often, in a tax evasion case like this, it’s best to get an attorney involved the moment the IRS starts asking questions rather than letting things progress to the point of criminal charges. And a conviction on federal charges does not allow parole. While this Texas woman now faces sentencing, others can still learn from her mistakes.

An experienced tax attorney can assist in negotiating with the IRS, and can maximize the chance of a favorable settlement. Since the government is usually interested in being repaid rather than locking somebody up for a long period of time, there may be room for someone who has made an innocent mistake on their taxes to negotiate an agreement long before it becomes a criminal matter.

Source: Times Record News, “Woman guilty in tax case,” Oct. 21, 2011