Massachusetts residents may be interested in a recent case involving a former California city officialand the Internal Revenue Service. The former city manager pleaded guilty to charges related to tax evasion that were allegedly part of a plan to enrich the accused and other city employees. According to IRS officials, the accused used a corporation to claim hundreds of thousands of dollars in inaccurate losses for tax deduction purposes.
In the plea agreement, he admitted that he had formed a company in 2002 and that he then used that business to claim losses related to a rental property located in Washington state. Between 2006 and 2009, authorities claim the accused fraudulently deducted more than $400,000. They also say he used the business to pay for $120,000 worth of renovation on his home and $80,000 of personal spending in 2010.
The accused could be sentenced to up to eight years in prison for the crimes at an upcoming hearing. He has also pleaded no contest to 69 state criminal counts of public corruption. For those crimes, he could face up to 12 years in prison. Also pleading guilty to charges of conspiracy related to the scheme was the accused’s tax preparer, who faces up to three years in prison for those charges.
Convictions for tax evasion carry severe penalties, including significant fines and lengthy jail time. The penalties can grow harsher as the size of the fraud increases. Tax evasion cases can also be complex and highly technical. A tax attorney with litigation experience may be able to help an individual prepare a defense against similar charges.
Source: KTLA, “Ex-Bell Leader Robert Rizzo to Plead Guilty to Federal Tax Evasion“, Stephanie Case, December 12, 2013