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.