The federal government recently accused a Texas entrepreneur of over $2 billion in tax evasion. The case, if successful, will mark the biggest tax evasion case against a U.S. citizen in the country’s history. The government has a 39-count indictment against the entrepreneur, including allegations of tax evasion, failing to file foreign bank account reports (FBAR), money laundering and evidence tampering.
The prosecution states the accused held offshore entities to hide income from the Internal Revenue Service (IRS) and avoid paying taxes. However, as noted in a recent analysis by Forbes, although hiding things is bad, the attempt at a coverup is almost always worse. This case helps prove that point; the entrepreneur received additional criminal charges for tampering with and destruction of evidence.
The tech mogul, Robert T. Brockman, has pleaded not guilty to all charges. If convicted, authorities state he faces a “substantial period of incarceration” and forfeiture of the funds that are connected to the criminal activity. When the case is complete, it could lead to millions in penalties.
What can taxpayers learn from this case?
The key to this case: transparency. Taxpayers should always report income and file taxes. It is important to do so honestly and to the best of your ability. Whether on purpose, or by mistake, tax organizations will find any unreported income and assets. Learning from Brockman, and many other tax evaders, the United States government has regulatory tools that serve as a hammer against foreign banking institutions. As such, they are much more likely to cooperate with the feds and disclose information about accounts held by United States citizens. The government will use these tools as part of an extensive, invasive investigation and may ultimately push for criminal charges if possible.
Those facing an investigation for tax crimes are wise to act to protect their interests. The attorneys at Goldburd McCone have experience with these types of cases and are ready to discuss your options, provide guidance and assistance in managing tax department correspondence, and legal representation.