Monday, August 25, 2008

The IRS Knows Who You Are!

To say being in compliance with filing your tax returns is important is a gross understatement. A good number of taxpayers do not file returns for specific years because they owe money to the IRS and cannot afford to pay the balance due. While it is true that owing money to the IRS can be a very stressful and embarrassing experience -- you can find yourself in a much worse position by not filing the returns. You can be prosecuted criminally for unfiled returns as many people are finding out across the country. In 2007 there were 516 investigations initiated and 300 of these had prosecution recommended for not filing tax returns. Of the 300 cases recommended for prosecution, 278 were sentenced (an 80.6% incarceration rate) with the average time served being 38 months. That is over 3 years in a federal prison because someone decided they either willfully did not want to follow the laws regarding filing taxes or maybe they thought (as so many people do) they could not afford to pay the taxes so I will wait and file the returns when I can pay. Take my advice FILE YOUR TAX RETURNS!!! It is better to have the IRS forcing monthly payments on you in order to pay the balance of your tax liability over time than to actually "do time." Ask yourself - would I rather pay for 5-10 years or be in jail for 5-10 years? I think this is an obvious answer.

Here are few examples of people who made the wrong decision:


  • Indiana Man Sentenced for Failing to File Individual Income Tax Return
    On April 17, 2007, in Indianapolis, IN, Patrick D. Bogan was sentenced to 12 months imprisonment, fined $4,000 and ordered to cooperate with the IRS after pleading guilty to willful failure to file an individual income tax return. Bogan admitted that he failed to file a 2001 individual income tax return. Bogan had taxable income in 2001 totaling approximately $280,389 resulting in an unpaid tax liability of approximately $99,551.
  • Defendant Sentenced to 21 Months in Prison for Failure to File Three Years of Income Tax Returns
    On May 30, 2007, in New Orleans, LA, Michael P. Nance, a Riverboat Pilot who worked for the New Orleans-Baton Rouge Steamship Pilots Association (NOBRA), was sentenced to 21 months in prison to be followed by one year of supervised release. According to the Information filed in the court in October 2006, Nance received gross income of $292,762 in calendar year 2000; gross income of $316,026 in calendar year 2001; and gross income of $296,134 in calendar year 2002. On December 13, 2006, he pleaded guilty to failing to file his personal federal income tax returns for the years 2000, 2001 and 2002.

  • Dallas Businessman Sentenced to Two Years in Prison for Failing to File Income Tax Returns
    On March 2, 2007, in Dallas, TX, John Hayden LaRue, Jr., a Dallas businessman, was sentenced to 24 months in prison for failing to file an income tax return. As part of his plea agreement with the government, LaRue paid $1.8 million in restitution to the Internal Revenue Service. LaRue owns Medical Contracting Services, Inc., (MCS) in Dallas. He admitted that he knew he was required to file a federal income tax return and that he voluntarily and intentionally failed to do so.

These are a few examples taken from an article on the IRS website from the year 2007. You can view others from 2006, 2007 & 2008 for additional proof. If you are behind on your tax filings don't think the IRS doesn't know where to find you or they won't come after you for the money. Please seek professional help in order to get into compliance and resolve your debt in a manner that is financially beneficial to you before it is removed involuntarily without your best interest in mind.

1 comment:

Brian Watkins said...

Great post! Those headline examples were excellent for reinforcing your point on that. So many people think not filing because they can't afford the associated tax is the answer, and it is crucial for people to understand that it is not illegal not to be able to afford the tax debt, but it is illegal not to file tax returns.