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.

Recently, a man in New Jersey plead guilty to tax evasion. According to the Department of Justice, “for tax years 2015 and 2016, Matthew Tucci, of West Long Branch, NJ, filed tax returns that stated he owed more than $2 million in taxes for both years. Despite admitting that he owed those taxes, Tucci did not fully pay them when they were due. Instead, Tucci purchased real estate and engaged in a series of transactions designed to conceal his interest in those properties.

In 2017, the IRS sent notices to Tucci that he owed taxes, interest, and penalties for 2015 and 2016. After receiving these notices, Tucci transferred multiple properties to an entity owned by another individual, but he continued to exert control over at least two of them. Of the two properties Tucci continued to control, he sold one and refinanced the other. Tucci used the proceeds from these transactions to pay his personal expenses rather than his tax debts. In 2019, Tucci submitted documents to the IRS that falsely claimed that he had no connection to the entity that owned the 12 properties.

He faces a maximum penalty of five years in prison as well as a period of supervised release, restitution, and monetary penalties. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.”

In another case, a Florida businessman was sentenced to prison for tax evasion.  According to the  Department of Justice, “David Albert Fletcher, of Deltona, Florida owned and operated furniture liquidations businesses, including Century Liquidators. For tax years 2004 through 2013, Fletcher did not timely file his federal income tax returns or pay the taxes he owed. After an audit, the IRS assessed a total of $1.7 million in taxes, interest, and penalties against him.

To evade collection of these taxes, Fletcher concealed his income and assets from the IRS. For example, Fletcher used nominees to hide his purchases of luxury vehicles, including Rolls Royces. Fletcher also filed false income tax returns that understated his income by several million dollars, and when an IRS special agent interviewed him, Fletcher falsely represented the amount of income he earned.

In addition to his prison sentence, U.S. District Judge Wendy Berger for the Middle District of Florida ordered Fletcher to serve three years of supervised release and to pay approximately $7,112,689 in restitution to the United States.”

Recently, Meg Strickler was able to ensure that no tax evasion charges were filed against her client.  Contact us if you think you might be facing tax evasion or tax fraud charges.  We are here to help.

Under proposed USSG 4C1.1, a client will receive a 2-level decrease to their offense level if a)no criminal history points,

b)did not receive a terrorism adjustment under §3A1.4

c)did not use violence or threats of violence,

d) did not cause death or serious injury,

e) did not commit a sex offense,

f) did not cause any victim substantial financial hardship,

g) did not possess or use a firearm or deadly weapon,

h) did not violate a victim’s civil rights,

i) did not commit a hate crime, an adjustment under §3A1.1 , and

j) did not receive an aggravating role adjustment pursuant to Chapter 3 of the USSG.

Also, another related amendment provides in Application Note 4 (A) to §5C1.1 “that a sentence other than imprisonment is generally appropriate” for a client in Zone A or B after a §4C1.1 reduction

Under proposed USSG 5C1.1, a non-custodial sentence is “generally appropriate” for a Zero-Point Offender in Zone A or B of the Sentencing Table. For reference, the highest range for a Zero-Point offender in Zone B is 8-14 months imprisonment. For Zero-Point offenders outside of Zone A and B, however, subsection (b) to 5C1.1 suggests a downward departure, including to probation, for Zero-point offenders if the applicable Guidelines range “overstates the gravity of the offense because the offense of conviction is not a crime of violence or an otherwise serious offense.”

Long and short, there is a more of a possibility to get probation in less complex fraud cases now.

Contact contact us to get more details.

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.

Conaway & Strickler, PC has a long history of handling fraud cases of all varieties and is well equipped at fighting the DOJ in their overzealous prosecutions. Please feel free to contact us so that we can help you avoid future headaches.