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Prison time for used car dealer’s tax evasion

| Aug 21, 2015 | Criminal Tax Violations |

Few areas of the law are more fraught with peril than tax law. The federal tax code is immense and immensely complex. The Internal Revenue Code occupies more than 2,600 pages and the supporting regulations promulgated by the Internal Revenue Service and the cases interoperating the code covers 70,000 pages.

It can be easy for individuals, especially those who operate their own business, to find themselves in trouble with the IRS regarding the payment of taxes. A business owner is responsible for paying their personal income taxes, their businesses income taxes, the payroll taxes for their employees, and depending on the business, there could be other special taxes, such as excise taxes that may be due. And there are the Minnesota state taxes, both income and sales tax, to further increase the complexity.

Of course, there are some who pay no tax. Assuming you have no income, that could be fine, but if you are like one man in Inver Grove Heights, who ran an unlicensed used-car dealership, and earned considerable income, it will be a problem.

His income may drop precipitously over the next two years, as he has been sentenced to two years in prison for reporting no income and not filing taxes during that period. He was also charged with “structuring,” where bank deposits are structured to be less than the amount a bank must report, and is typically used to hide income and avoid surveillance by the IRS.

His prosecution and sentence were probably not helped by the fact he had been under a previous agreement to repay $100,000 in back taxes.

While tax offenses carry financial penalties that include the tax, the interest on the tax and other penalties, many also carry prison time, especially those involving willful evasion.

Source:, “Inver Grove Heights man gets 2 years for avoiding back taxes,” Nick Ferraro, Pioneer Press, August 18, 2015