Business owners must navigate a wide range of tax obligations. A failure to properly abide by these obligations can lead to an audit and, depending on the findings of the audit, allegations of criminal wrongdoing.
A local Minnesota businessman provides a current example. The government has accused the business owner of failing to pay $918,000 in tax obligations. The agency states the business owner failed to make required sales tax payments by allegedly under reporting sales of tobacco products and filing false sales tax returns.
How did the IRS build their case? The case began with a tip. A former employee allegedly contacted the Internal Revenue Service (IRS). This individual allegedly notified the agency the business owner was intentionally avoiding sales tax obligations.
Based on this tip, the agency conducted an audit of the business. During the audit, the IRS stated the business owner attempted to hide receipt tapes and attempted to present falsified voided transactions.
What types of penalties come with this type of tax evasion crime? The business owner faces both monetary penalties, interest fees on owed taxes and potential prison time for his crime. The man faces both felony and misdemeanor tax evasion charges. The misdemeanor crimes come with up to $3,000 in fines and a one-year jail sentence. Each felony charge can come with up to $10,000 in fines and a maximum five-year imprisonment.
What can others do who are accused of similar tax crimes? It is wise to take allegations of wrongdoing by the IRS seriously. Defenses are available.