A successful art dealer recently faced sentencing for allegations of tax evasion. The allegations are the result of a six-year investigation which led to evidence to support the following crimes:
- Failure to file. During the investigation, it became apparent the accused had failed to file taxes in 2009 and 2010.
- Wrongful use of business expense deduction. The prosecution stated the accused used a business tax deduction for personal expenses.
- Failure to pay state taxes. The prosecution also accused the art dealer of collecting state sales taxes but the failing to deliver the payments to the government.
The government claims the evasion was egregious. In 2011 alone, the prosecution states the accused paid $300 in taxes. In reality, they state she owed over $1.2 million.
The accused faced up to six years imprisonment. Ultimately, the judge sentenced the accused to a 30-month prison sentence as well as community service. The judge did not require additional financial penalties as the accused had already paid over $6 million in restitution and fines.
Part of the reason for the sentence was the fact the government could establish the violations were willful. If successful, an allegation of willful tax evasion can result in an increase in penalties. In this case, the fact that the violations were deemed willful and repeated year after year were used to support the prosecution’s push for prison time as opposed to house arrest.
The case provides an example of the need for legal defense when facing similar accusations. It is important to build a strong defense to the allegations. The government is serious and will pursue serious penalties.