How does the government build a case against alleged criminals who would otherwise be free from criminal charges? Tax evasion. Tax evasion has been a major tool in the government’s tool belt to prosecute criminals for decades. The use of tax evasion charges to go after criminals that may otherwise be difficult to catch may have become most well-known during the prosecution of those involved in the mafia.
A prime example: Al Capone. The government prosecuted the mobster not for murder, but tax evasion. The criminal mastermind had never filed an income tax return. The government was able to verify that he had received millions in ill gotten gains. Although the income was illegal, the Internal Revenue Service (IRS) still required reporting. Since he failed to report this income, the government was able to secure a conviction and he went to prison for tax evasion.
In recent news, some of Hollywood’s elite and top-level executives throughout the country are currently facing allegations of tax crimes in connection to their role in the college admission scandal. The scandal, code named “Operation Varsity Blues,” involved wealthy parents paying off an individual to guarantee their children admission through fake admission exams and student-athlete titles to high-profile colleges like Yale and UCLA.
How did the IRS build tax charges against these individuals? The payments were generally made to a fraudulent charitable organization and the parents took a charitable donation deduction on their tax returns. The parents could face criminal tax charges for their actions in the scandal. Those who face accusations are wise to review the charges and build a defense. If convicted, they could face financial penalties and potential imprisonment.