Even when a person is accused of or charged with a crime, there are no accepted delays in paying taxes for criminals. Everyone in the United States is required to file tax returns for any income that they make regardless of where that income comes from. This is also applicable to criminals, making taxes for criminals a bit of a niche in the tax practice world.
Why Taxes for Criminals Must Be Filed
In many cases that tax lawyers deal with, there is a person or people who have committed some sort of a crime, financial or otherwise. Just because an individual commits a crime and may be facing incarceration does not prevent them from having to file tax returns. In addition, it could cause more headaches for the person in the following instances:
- Plea Bargains and Parole. Not only are criminals not excused from filing taxes, but if they do not file their returns, it could also affect their case. For example, if an individual agrees to a plea bargain or seeks parole or some other form of relief, they must ensure they are indeed current on their tax returns.
- New Charges. There can be some instances in a which a person is accused of a crime, but the government may not be able to prove beyond a shadow of a doubt that they committed the crime. This could open the door to the Internal Revenue Service, FBI, or other government entities to change tactics and instead prove that the person in question committed tax fraud by not reporting profits from whatever money-making enterprise they are or were connected to.
The bottom line is that taxes for criminals must still be completed and filed because it is simply the law. It also could become a significant obstacle to their freedom in the long run.
Cases Where the Accused’s Failure to Pay Taxes Worked Against Them
New charges for tax evasion have sometimes famously occurred throughout history and turned out to be the undoing for the accused.
One of the most famous people of note in this situation was Al Capone, a Chicago businessman and alleged gangster during the Prohibition Era. Although many suspected Capone was involved in illegal bootlegging, authorities were unable to prove it. Despite the government not being able to charge Capone with prohibition violations for the illegal sale of alcohol, they were instead able to prove that he was guilty of making money and not paying taxes on that income. Ultimately, Capone was charged with twenty-two counts of tax evasion.
How A Tax Attorney Can Help with Taxes for Criminals
Despite many criminals having problems other than that of taxes, they are still required to file a tax return, and it is in their best interest to do so.
For example, if a person is accused of being involved in a hitman scenario, it is likely that a trial will be held to determine if that individual played an illegal role. Should the authorities be unable to prove the individual’s involvement in the hitman scenario, they may switch tactics by evaluating the individual’s tax returns.
Whether or not it can be proved that the individual made $200,000 from a hitman deal or not, the fact may still remain that the individual made $200,000. As stated before, tax returns are used to declare income wherever it comes from. This individual needed to do a tax return for this amount in order for it not to be an additional legal issue.
While some certified public accountants may be tempted to turn down helping this individual get their tax returns in order, most tax attorneys understand the fact that the individual still has an obligation to pay and report their taxes since they made the $200,000. An accountant could help with the W-2 and home mortgage and record the income and file an official tax return.
Although this is indeed a benefit for the accused by keeping the Internal Revenue Service or Justice Department from prosecuting them for failure to file a tax return and ultimately tax evasion, a tax attorney knows that completing and filing the tax return serves the federal tax system.
In a slightly different scenario of plea bargaining, a tax attorney may also be able to help. It is essential that an individual who has been accused of a crime and wants to begin the plea bargain process in the federal criminal system must be current on their tax returns. Again, certified public accountants may shy away from this type of assistance, but a knowledgeable tax attorney understands that the person still needs to pay their taxes and file the returns and can assist the individual in doing so. The attorney can complete an honest and accurate tax return and present it to the taxpayer, their criminal lawyer, and ultimately the justice department.
At this point, if the taxpayer is able to make payment on the return so that any tax related obstacles to plea bargaining or other sentencing implications are removed, they should do so. This in turn allows the justice department and criminal defense attorneys to work with the case at hand instead of having to focus on other issues such as those that may be tax related.
Taxes for criminals are an area of law that tax attorneys should be equipped to handle. This assistance may be helpful not only in their current circumstances as they face incarceration but will also be helpful to them when they get out of prison or complete whatever punishment they are given and rejoin society. Their tax returns will be current and prepared. This keeps them from having to scramble to complete returns that lapsed since their pre-incarceration period.
While a criminal can’t benefit from filing taxes, it is required by law to file them. A reputable tax attorney assisting with taxes for criminals can also serve a function for government and society in general by allowing the criminal and tax systems to work efficiently.