A Tennessee dentist is going to prison for a year for tax fraud. While the news isn’t startling, the story is a cautionary tale about getting good legal help if the Internal Revenue Service approaches you.
Ms. Andrea Henry is a Tennessee resident and dentist who owned two dental practices in Shelby County. Between 2005 and 2013, she failed to file tax returns twice, once in 2007 and again in 2009. In addition, Ms. Henry did not report $113,781 in income or turn over employment taxes she had withheld from staff salaries to the government.
While the charges of failure to file and failure to accurately report income were serious, the payroll tax issue added significant weight. Because she owned her businesses, the IRS was able to personally assess Ms. Henry more than $160,000 through a trust fund recovery penalty for the payroll taxes she had not paid.
In any business, people make financial and tax mistakes including failure to file or report income. When the IRS initiates a criminal tax investigation, most professionals immediately know to contact a good tax lawyer. Our law firm works regularly creating and crafting responsible solutions to problems like this for people across the United States. These are approachable problems that must be resolved to avoid tremendously serious consequences.
The plot thickens…
Instead of retaining a tax attorney and working with the IRS, Ms. Henry chose a different route. She switched to using her business accounts to pay for her personal expenses. With the tax penalty looming large, Ms. Henry spent “hundreds of thousands of dollars on personal expenses, including private school tuition, expensive housing, and luxury cars (a Dodge Viper and a Porsche Panamera).”
As her residence was being foreclosed, Ms. Henry created a fake lease arrangement whereby she transferred $130,000 to a nominee buyer, who then repurchased the home for her. The same person and others were involved in her car leasing and purchase transactions.
When she finally pleaded guilty, Ms. Henry admitted to causing a tax loss of $528,882.07. She was sentenced to a year in prison, three years of supervised release and ordered to pay $653,116.78 in restitution.
The charges faced by Ms. Henry at the outset were serious. By the time she attempted to evade her responsibilities and engage in deceptive practices, her situation worsened. Her futile actions created a much more complicated scenario that will have a severe impact on her liberty and her livelihood.
The actions and fate of Ms. Henry illustrate the need to get experienced legal help when you first become aware of tax troubles. Ms. Henry has a ruined reputation, a criminal record, and four years of legal supervision to consider how she might have done things differently.
Experienced help with criminal tax investigations in Chicago and Cleveland
The law firm of Robert J. Fedor Esq., LLC provides strategic, sophisticated solutions if you face tax-related issues in the US and abroad. If you receive an IRS audit notice, or become the focus of an IRS criminal tax investigation, contact us today.