A 68-year-old economist who currently resides in California was recently charged with a number of tax crimes. In addition to tax evasion, he has additionally been charged with obstruction of the IRS, failure to file a tax return and failure to pay taxes. If convicted, he could face up to five years in prison on the tax evasion charge alone.
As Sacramento residents know, the tax code is tremendously complex and maze-like in its rules and regulations, so it is not difficult to make an inadvertent error. In this case, however, the economist has been charged with not having filed his tax returns at all between 1989 and 2010.
According to the IRS, the man did not file his taxes due to religious objections, and the agency claims that he owes over $500,000 in back taxes. The IRS claims that, over the years, the man told his employers that he is exempt from taxation, and even allegedly once used someone else's Social Security number. However, it is important to note that these are merely allegations and will need to be proved beyond a reasonable doubt in a court of law.
Nonetheless, the allegations of tax crimes can carry with them serious ramifications and require the presentation of a strategic and meaningful tax defense. Alternatively, it may also be possible taxpayers in California to reach a deal with the IRS outside of court. Whichever course of action the economist decides upon, it will be necessary for him to gather up his financial documents and prepare a defense that aims at a reduction or dismissal of penalties.
Source: Accounting Today, "Economist Charged with Evading Taxes for 22 Years," Michael Cohn, April 18, 2012