A grand jury returned an indictment on Jan. 15 against a Boston-area photographer who allegedly failed to report income of $87,907 between 2003 and 2007. Charges of tax evasion and filing false tax documents followed an investigation by the Internal Revenue Service.
Prosecutors allege that the photographer avoided paying taxes by using the name and Social Security information of his deceased father-in-law. He is said to have received $73,950 for freelance services between September 2009 and February 2012, but payment was not made with checks made out to him. Instead, he arranged for checks to be made payable to his deceased relative, which he then endorsed and deposited in his wife’s bank account.
This income contradicts statements that the photographer allegedly made in 2012 when he signed an information statement for self-employed individuals required for an offer in compromise. At that time, he claimed to be out of work with only $20 to his name. The statement was made after the IRS informed him that his outstanding back taxes had risen to $108,351 with interest and penalties. The indictment was returned with the U.S. District Court for the District of Massachusetts. It is not known when the defendant’s initial court appearance will take place.
While there is sometimes a fine line separating legal tax avoidance from illegal tax evasion, charges involving unreported income can be serious and result in significant penalties. An attorney with experience in income tax litigation and in dealing with the Internal Revenue Service may be able to obtain a compromise and settlement that would result in a schedule of payments to make up the deficiency being assessed.
Source: Boston Herald, “Feds charge freelance photographer with tax evasion“, Laurel J. Sweet, January 15, 2014