New York officials continue to crackdown on allegations of tax fraud. In one recent example, New York authorities sentenced a local restaurateur to two years imprisonment for tax evasion. The authorities claim that the businessman diverted profits for personal use and failed to properly report income on tax returns. The prosecution claims that he failed to pay the New York State Department of Taxation and Finance and the Internal Revenue Service more than $700,000 in tax obligations.
In addition to the prison sentence, authorities also require the entrepreneur to repay the $700,000 in restitution and serve three years of supervised release.
In another example, New York Attorney General announced an investigation that resulted in allegations that a diner owner failed to pay almost $2 million in tax obligations to the state. The authorities claim that during an investigation, which was triggered by a whistleblower complaint, they found evidence the owner failed to report cash payments at his restaurants. The parties have agreed that the business owner will pay taxes on the unreported funds as well as additional penalties, fees and interest totaling $1,878,493.
In the aftermath of these and similar rigorous tax law enforcement efforts in New York, high net-worth individuals and small business owners are wise to review their taxes for compliance. Recent crackdowns such as these serve as a stark reminder of the legal implications of non-compliance. In addition to the monetary penalties and potential imprisonment discussed above, potential repercussions of such accusations can also include reputation damage. Legal action from tax non-compliance can tarnish personal and business reputations.
How can I avoid tax trouble?
A proactive approach can help mitigate the risk of similar allegations of wrongdoing. This can include:
- Know the laws: Keep up to date with state tax regulations, which can change frequently.
- Seek professional advice: Consult with tax experts who specialize in New York tax law to ensure full compliance. The attorneys at Goldburd McCone are experienced with these types of legal matters and can review your situation and provide guidance tailored to your case.
- Be proactive with changes: Respond promptly to any changes in tax law that may affect your financial situation.
It is also important to maintain proper records. Keep copies of information related to income, deductions, and credits to substantiate your tax returns. Set aside time to periodically review your financial records to catch and rectify any discrepancies early.
The recent tax law crackdowns in New York serve as a powerful incentive for high net-worth individuals and small business owners to adhere strictly to tax regulations. By staying informed, maintaining accurate records, and reporting income correctly, you can better ensure you steer clear of tax trouble and safeguard your financial integrity. Remember, when it comes to taxes, an ounce of prevention is worth a pound of cure.