Many California residents fail to file taxes on time. Although requesting an extension for a late return is relatively simple, it also very easy to allow a late return to become an unfiled return. The IRS diligently looks for Orange County residents who fail to file returns and the IRS may subject these taxpayers to penalties for failure to file, failure to pay, or even tax evasion. In some cases the IRS may even file a tax return for a California taxpayer, giving the taxpayer the bare minimum amount of reductions and charging interest and penalties on any outstanding amount due.
Failure to file a tax return is common for taxpayers of all income and education levels. Even high profile attorneys sometimes fail to file taxes and report income. One former Wall Street lawyer recently plead guilty to failing to pay his taxes for a four year period. The attorney was a mergers-and-acquisitions partner at a prominent law firm when he failed to report his income. He allegedly failed to file tax returns in 2004 and 2006, and did not pay taxes in 2005 and 2007.
Most Orange County residents can avoid jail time when they are represented by experienced tax law attorneys. Unfortunately the 48-year-old Wall Street lawyer’s tax evasion was so egregious that he can be sentenced to almost four years in jail. Authorities believe that the lawyer failed to file income taxes for over $10 million income between 2001 and 2008.
Preet S. Bharara, the United States attorney in Manhattan, said that the attorney worked at a prestigious law firm and advised his clients how to comply with the very laws that he was accused of breaking.
“He thumbed his nose at the I.R.S. to fund an even more lavish lifestyle than his generous income permitted,” Bharara said.
The attorney will be sentenced on Nov. 16.
Source: Wall Street Journal, “Guilty Plea by Lawyer in Tax Case,” Chad Bray, Aug. 5, 2011; New York Times, “Former Sullivan & Cromwell Partner Pleads Guilty to Tax Evasion,” Peter Lattman, Aug. 4, 2011