Tax Fraud

Tax Evasion

Published on: June 6, 2025 | By Conaway & Strickler, P.C.

Tax evasion is a potential criminal charge. Tax avoidance is perfectly acceptable.

26 U.S.C. § 7201 defines what is tax evasion. It states in relevant part that any person who willfully attempts in any manner to evade or defeat any tax imposed by this title or the payment thereof shall, in addition to other penalties provided by law, be guilty of a felony and, upon conviction thereof, shall be fined not more than $100,000 ($500,000 in the case of a corporation), or imprisoned not more than 5 years, or both, together with the costs of prosecution.

Federal prosecutors might also add additional charges beyond tax evasion. Those charges could include conspiracy charges, under 18 U.S.C. § 371, or tax fraud under 26 U.S.C. § 7206. The United States Sentencing Commission (USSC) recently released its Tax Fraud Report for fiscal year 2023. It states that off the 64,124 cases reported to the Commission in fiscal year 2023, 363 involved tax fraud (down 27% since FY 2019). It is unclear if this downward trend will continue.

Tax Crimes in Cryptocurrency

Published on: June 1, 2025 | By Conaway & Strickler, P.C.

Leona Helmsley, Jim Thorpe, Webster Hubbell, Alphonse Capone, and Peter Madoff are among many convicted of tax crimes such as tax evasion and tax fraud. The government generally targets groups like tax preparation firms and entities that are mainly cash based. But, the criminal division of the IRS has begun a more targeted approach to investigate and prosecute tax crimes in the cryptocurrency arena. Crypto investment schemes, for example, require investors to produce cash, but then convert the fraud proceeds to cryptocurrency to purposefully circumvent financial reporting requirements. These type of cases thus also involve potential money laundering, wire fraud and structuring charges,

The “newer” question on page 1 of the Tax Form 1040 now has a question that states, “At any time during the past year did you receive any financial interest in virtual currency?” In 2019, this question was only on Schedule 1. As of 2020, it is on page 1 of the Tax Form 1040. This is specifically targeted to combat cryptocurrency tax evasion.

Under 26 U.S.C § 7206(1), it is a criminal offense to file a tax return the filer knows is materially false. So, if you do not check that box on that first page, AND have substantial income in crypto, you might be targeted by the IRS. Remember cryptocurrencies are essentially similar to common stocks. This means a taxpayer must report their gains in cryptocurrencies on Form 8949. These gains are passed through to Schedule D on personal returns. The filer is responsible for paying capital gains tax on the net gain for the year. The government is long since versed in understanding the intricacies of the market like the role of hardware wallets, the use of DEXs, on-chain information, and how to track crypto movement across distributed ledgers. Please see here for a recent example of a case where non-payment of federal income tax on cryptocurrency earnings led to a conviction.

Conaway & Strickler, PC In The News

Published on: October 6, 2023 | By Conaway & Strickler, P.C.

Meg Strickler often discusses the law in the media. Recently, with all of the attention of the former President Trump being charged in several indictments, Meg Strickler has been quite busy discussing her thoughts on the various cases. She was asked by NBC 11 Alive more than once for her thoughts on the RICO Trump indictment in Fulton County. She also was featured in an article by the BBC, among others.

Georgia’s RICO act can be used by county district attorneys in a variety of ways including both Trump and the Cop City indictment in Dekalb County. The state of Georgia RICO statute is even more broad than the federal RICO statute.

The RICO statute is explained in another blog by Conaway & Strickler, PC. Feel free to contact us if you should have any questions on RICO and more importantly, should you or someone you love be facing a state or federal RICO charge.

Basics of Tax Evasion

Published on: March 3, 2023 | By Conaway & Strickler, P.C.

By Maya Fouad

Tax evasion is the most common federal tax crime and involves the failure to report taxes, reporting taxes inaccurately, or failing to pay taxes. Federal law defines the crime broadly; 26 U.S.C. 7201 states, “[a]ny person who willfully attempts in any manner to evade or defeat any tax imposed by this title or the payment thereof shall, in addition to other penalties provided by law, be guilty of a felony. . .” The penalties for tax evasion can include significant monetary fines, imprisonment, or both.

To establish a case of tax evasion, the Government must prove three elements beyond a reasonable doubt:

What are the current DOJ priorities?

Published on: April 1, 2022 | By Conaway & Strickler, P.C.

Attorney General Merrick Garland made recent comments about what he considered to be the Department of Justice’s top priorities for 2022. Since taking office in March 2021, Garland has tried to combat crime in a tumultuous time. He has been criticized for his handling of January 6 investigation and has stated it’s the most urgent probe in history.

With all of this going on, the US Attorney’s office increased its prosecutions of individuals of white collar crimes in the year 2021. White collar charges like fraud, theft, corruption, bribery, environmental crime, tax fraud, health care fraud, procurement fraud, money laundering, PPP loan fraud, etc will continue to get more attention from the Department of Justice.

What does this mean? It means that investigations of any sort need to be taken seriously and that you should contact a lawyer immediately if any wrongdoing is alleged.

Whistleblower / Qui Tam cases in Health Care

Published on: September 11, 2021 | By Conaway & Strickler, P.C.

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Health Care Qui Tam cases

What does Qui Tam mean?

Qui tam is short for the Latin phrase “qui tam pro domino rege quam pro se ipso in hac parte sequitur,” which roughly translates to “he who brings an action for the king as well as for himself.”

IRS Increased Focus on Cryptocurrency in Operation Hidden Treasure

Published on: May 1, 2021 | By Conaway & Strickler, P.C.

The IRS has just announced that Operation Hidden Treasure will seek to find taxpayers with unreported income from currency transactions. Did you notice the new question on page 1 of the Tax Form 1040? It states, “At any time during 2020 did you receive any financial interest in virtual currency?” Last year this question was only on Schedule 1.

The IRS Criminal Investigation Division (“CID”) will look for typical “flags” in money transactions. That may include “structuring” (transactions in increments of less than $10,000 to avoid reporting requirements), “the use of nominees, shell corps” (entities used solely for moving money around) or “getting on and off the chain.” (On chain transactions – blockchain is modified to reflect the transaction on a public ledger. Off chain transactions are those that that go off the blockchain. They work by swapping private keys to an existing wallet instead of transferring funds.)

The IRS identifies and investigates these tax evasion flags. Operation Hidden Treasure is “all about finding, tracing, and attributing crypto to U.S. Taxpayers.” Do not be fooled into thinking that since it’s cryptocurrency the government does not have the know how to investigate. Charges for tax evasion, false information on a tax return or even money laundering or structuring can be forthcoming. Call Conaway & Strickler, PC if you have had a friendly visit from an IRS CID Agent or if you think you might be facing some issues with the IRS. Carolyn Schenck, national fraud counsel in the IRS Office of Chief Counsel states, “Operation Hidden Treasure is designed to find, trace and attribute such transactions to taxpayers. These transactions are not anonymous. We see you.”

Tax Fraud: Woman has emotional breakdown in trial in Georgia

Published on: May 20, 2015 | By Conaway & Strickler, P.C.

Tax Fraud: Being charged with a serious crime can be an emotionally challenging experience for many people. This is particularly true if a conviction can result in significant time behind bars. This seems to be what one woman is experiencing during her recent trial surrounding state tax fraud charges in Georgia. (You can be charged at the state level or the federal level for these type of charges, although it is more commonly charged at the federal level)

According to reports by the media, the woman appeared visibly upset before the court proceedings began. The woman required removal from the courtroom and was later brought back in.

A judge recently decided to push back the trial following the woman’s outburst in court. The trial will address multiple counts of tax fraud and other related crimes that the woman is now facing. The woman had allegedly been operating a tax preparation business when arrested for a tax fraud scheme in which she had allegedly filed thousands of fraudulent tax returns in order to obtain larger tax return payments for her customers.

Tax Fraud: Tyrone Brooks Jr. pleads guilty in Georgia

Published on: April 21, 2015 | By Conaway & Strickler, P.C.

Tax Fraud: Elected public officials are an integral part of democracy in the United States. Typically, these individuals are held to higher ethical and legal standards. However, even elected officials can make mistakes which can result in legal problems. This is what is happening with former Georgia State Rep. Tyrone Brooks Jr. who was charged with various white collar crimes.

Brooks was charged in federal court with filing false tax returns, tax fraud, wire fraud and mail fraud. He was indicted in May 2013. The representative had been accused of misappropriation of funds which were supposed to go to charity. Instead, the man allegedly used the funds to pay for family and personal expenses.

Reportedly, he had allegedly solicited over $1 million worth of contributions during the period between the mid-1990s and 2012. He told individual and corporate donors that the funds would be used to help combat illiteracy in under-served communities as well as various other causes. The allegations involved the defendant’s relationship with a tax-exempt charity which Brooks had founded in 1990. Also, the allegations involved his role as president of the Georgia Association of Black Elected Officials.

Tax Fraud: Married couple faces tax fraud charges in Georgia

Published on: March 26, 2015 | By Conaway & Strickler, P.C.

The United States tax system is designed for the benefit of all citizens and taxpayers. The funds collected from taxes help to pay for many social services and the infrastructure necessary to maintain society. There are a number of laws aimed at maintaining the integrity of the tax system, and violating tax laws can result in criminal charges. This is what one couple is facing after they were charged with tax fraud in federal court inGeorgia.

The two defendants, a man and his wife, were accused of conspiring to commit wire fraud by filing fraudulent tax returns during the period beginning in Jan. 2011 and ending in Feb. 2013. The 44-year-old man and his wife were charged with one count of aggravated identity theft and one count of conspiracy to commit wire fraud. Federal prosecutors indicated that the couple filed more than 1,100 fraudulent tax returns electronically.

The couple allegedly obtained nearly $1.2 million in funds from fraudulent tax refunds. The authorities have determined that 114 calls were made to the Internal Revenue Service from the wife’s cell phone. Both of the defendants are now facing as many as 20 years behind bars and fines of as much as $250,000. Both defendants have decided to plead guilty to specified charges, likely in hopes of obtaining some leniency at sentencing.