Penalties for tax evasion too harsh for Marylanders to ignore

Government doesn't run on fumes. Taxes are the lifeblood of government operations and officials in Maryland and at the federal level will go to great lengths to collect all the funds they may argue they are due. Those who are being audited by the Internal Revenue Service or face investigation for alleged tax evasion should not sit back and let things unfold without the aid of legal counsel.

The consequences for not acting can be huge, and you don't have to be a big fish to feel the fallout. A Maryland scrapyard owner is finding this out now. He was recently convicted of tax evasion charges and is looking at an eight-month term in prison and has been ordered to pay $114,226 in restitution to the IRS.

Federal officials accused the 55-year-old Baltimore entrepreneur of failing to file income tax returns for personal income between 2000 and 2009. A full accounting of what he supposedly owes in federal income tax hasn't been made. The $114,226 figure is said to be what he owes for just the period of 2007 to 2010.

According to reports, the man operated two salvage facilities -- one in Baltimore and another in Upper Marlboro, Maryland. Officials allege that the man regularly withdrew funds from his bank account in 2007, 2008 and 2009 but apparently failed to report any income. They say that in 2010, he withdrew sums totaling more than $1.5 million.

This kind of criminal case usually is accompanied by flags that should clue an individual in that something is up. When a person first gets wind that an audit has been launched one of the wise things to do would be to end discussions with the tax accountant and find an experienced tax attorney. If the case advances to a criminal probe, accountant-client privilege may not be enforceable, but attorney-client privilege will remain intact.

Source: American Metal Market, "Md. scrapyard owner jailed for tax evasion," Lisa Gordon, Nov. 14, 2012

  • The issues discussed in this blog entry are of the type our firm handles. To learn more about our practice, please visit our Washington DC criminal tax page.

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