In the 1920's the now infamous gangster Al Capone was living extremely well. He was able to corner the illegal liquor business through bribes to police officers and by murdering or conspiring to commit murder. Mr. Capone was smart, smart enough to rarely allow evidence to lead back to him. Then in 1931 Capone, was convicted and sentenced to a prison term for Tax Evasion.
Last month a Morristown, Tennessee Veterinarian and a Jefferson County, Tennessee Marina owner unfortunately became local examples of the criminal charge of Tax Evasion. A charge and ultimate conviction that resulted in a federal jail sentence with the United States Bureau of Prison(s). The Morristown Veterinarian was sentenced on August 6, 2012 in U.S. District Court in Greeneville to serve 60 days in prison, five years probation, pay a $50,000.00 fine and perform 350 hours of community service. The Veterinarian was accused and convicted of using a method of tax evasion known as "structuring." During a two-year period prior to his conviction, the Veterinarian "structured" over $400,000.00 in deposits. What is "Structuring?" Federal tax law requires all financial institutions, whether they are banks, or investment funds, to create a Currency Transaction Report (CTR) and send it to the IRS anytime a person makes a deposit, withdrawal, or payment in excess of $10,000.00. "Structuring" is when someone breaks up cash transactions for the purpose of evading the reporting requirement. The IRS believes that these large cash transactions must be reported because large cash transactions can often point to illegal activities or income tax evasion. Unfortunately, most people don't know that tax evasion can lead to such serious consequences.
"Structuring" is not the only way to get in trouble with the IRS. For small business owners it is very important to report all income paid to employees to the IRS. This is something that a Jefferson County Marina owner learned when he was ordered to pay over $80,000.00 in restitution and was sentenced four months in prison. The marina owner paid a portion of his employee's wages by check but paid the rest in cash. By paying a portion of the wages in cash, the marina owner is required to pay less into Social Security and Medicare. Employers are required not only to report wages paid but also pay an equal amount into Social Security and Medicare withheld from the employees check. By failing to report wages accurately an employer may be placing him or herself in a dangerous position and could face criminal liability.
If you have questions about what activities could result in a tax evasion charge, feel free to contact our experienced criminal defense attorneys today. We serve clients throughout Hamblen County as well as in
Morristown and surrounding cities.