From the Tax Law Offices of David W. Klasing - Attorney in Philadelphia Sentenced to Prison for PPP Fraud and Tax Evasion

IRVINE, Calif., July 25, 2023 /PRNewswire/ --Tax evasion occurs when people deliberately & intentionally dodge their tax obligations. The U.S. government treats this crime very seriously. Those convicted of tax evasion can face serious consequences like expensive fines and prison terms.

For instance, a Philadelphia attorney who was recently convicted of tax evasion has been sentenced to over 2 years in prison. Further, he has been ordered to pay over $133,000 for his tax crimes. If you have been accused of tax evasion, having competent legal representation on your side can help you avoid facing similar penalties in your case.

Seek thorough guidance and support from our experienced Dual Licensed Tax Attorneys and CPAs at the Tax Law Offices of David W. Klasing by dialing (800) 681-1295 or clicking here to schedule a reduced rate initial consultation online.

Tax Evasion Scheme Results in Prison Sentence for Philadelphia Attorney

A Philadelphia attorney has been sentenced to prison for committing fraud and tax evasion. Between June 2020 and February 2021, Olivetti fraudulently obtained pandemic relief money by applying for four loans he was not entitled to. He applied for two loans through the Paycheck Protection Program (PPP) and two loans through the Economic Injury Disaster Loan (EIDL) on behalf of his law firm, Olivetti Law, LLC. These loan programs were designed to provide financial assistance to those affected by the pandemic.

He inflated the payroll his law firm in the online loan applications for a PPP loan, resulting in him receiving $41,600 and $62,500 through the EIDL. However, the applications contained false information about the amount of receipts from his law firm that were not approved by the Small Business Administration (SBA).

In addition to the loan fraud, He evaded taxes by hiding money between November 2015 and July 2020. As a result, he now faces a prison sentence and has been ordered to pay restitution to various entities. In addition to his 27-month prison sentence, He must pay $21,800 to the SBA, $20,800 to MBE Capital, $91,991.28 for mail fraud, and $133,269.81 to the federal government for tax evasion.

It is important to address any tax issues you are having quickly so that you may avoid facing consequences like those faced by this attorney. Fortunately, our Dual Licensed Tax Attorneys and CPAs are prepared to review your case and explain the appropriate course of action.

What are the Different Types of Tax Evasion?

Several different types of tax evasion can occur. If you have been accused of any of the following, then the team at our law firm can help build your defense:

Personal Income Tax Evasion

Individuals may engage in tax evasion to evade paying personal income taxes. Some common tactics include underreporting income, claiming false deductions or credits, and concealing assets. For instance, a person might fail to report income earned through cash transactions or offshore bank accounts, deliberately providing inaccurate information on their tax returns to lower their taxable income.

Corporate Tax Evasion

Corporations may employ strategies to evade corporate taxes and maximize profits. One method is fraudulent transfer pricing, where a multinational company manipulates the prices of goods and services between its subsidiaries to shift profits to low-tax jurisdictions. Another example is the creation of shell companies in tax havens to hold intellectual property rights and royalties, enabling the company to reduce taxable income in higher-tax countries.

Offshore Tax Evasion

Offshore tax evasion involves individuals or businesses using offshore accounts or entities to hide income and assets from the IRS. This is typically achieved by establishing offshore trusts, shell companies, or bank accounts in jurisdictions known for their low tax rates and strict banking secrecy laws. Offshore tax evasion is often associated with money laundering and illicit activities, as it facilitates the concealment of wealth.

Sales Tax Evasion

Sales tax evasion occurs when businesses intentionally underreport or fail to remit sales taxes collected from customers. This can be done through various means, such as manipulating sales records, inflating deductions, or conducting transactions "off the books." For example, a retailer may understate their sales by accepting cash payments without issuing receipts or maintaining separate records.

Employment Tax Evasion

Employment tax evasion occurs when employers deliberately misclassify workers as independent contractors instead of employees to evade payroll taxes. By doing so, employers avoid paying their share of Social Security, Medicare, and unemployment taxes, as well as withholdings from employees' wages. This practice allows businesses to save on labor costs and shift tax responsibilities onto workers.

Estate Tax Evasion

Estate tax, also known as inheritance tax, is imposed on the transfer of wealth from a deceased person to their heirs. Estate tax evasion involves strategies aimed at undervaluing assets or transferring them to avoid tax liability. Individuals may engage in fraudulent tactics such as creating sham trusts, undervaluing properties, or engaging in gift-giving schemes to reduce the taxable value of their estates.

Internet and Digital Economy Tax Evasion

The digital economy presents unique challenges for tax authorities due to the borderless nature of online transactions. Tax evasion in the digital realm involves exploiting loopholes and inconsistencies in international tax laws. For instance, companies may establish a presence in low-tax jurisdictions despite conducting significant business elsewhere. Alternatively, online retailers may fail to collect and remit taxes on sales made to customers in different jurisdictions.

If the IRS Has Charged You with a Tax Crime, or you merely fear they might, our dual licensed Tax Lawyers & CPAs Can Help

If you are concerned about being charged with tax evasion, get help from our Dual Licensed Tax Attorneys and CPAs by calling Tax Law Offices of David W. Klasing at (800) 681-1295 or clicking here to schedule a reduced rate initial consultation online.

If you have failed to file a tax return for one or more years or have taken a position on a tax return that could not be supported upon an IRS or state tax authority audit, eggshell audit, reverse eggshell audit, or criminal tax investigation, it is in your best interest to contact an experienced tax defense attorney to determine your best route back into federal or state tax compliance without facing criminal prosecution.

Note:  As long as a taxpayer that has willfully committed tax crimes (potentially including non-filed foreign information returns coupled with affirmative evasion of U.S. income tax on offshore income) self-reports the tax fraud (including a pattern of non-filed returns) through a domestic or offshore voluntary disclosure before the IRS has started an audit or criminal tax investigation / prosecution, the taxpayer can ordinarily be successfully brought back into tax compliance and receive a nearly guaranteed pass on criminal tax prosecution and simultaneously often receive a break on the civil penalties that would otherwise apply. 

It is imperative that you hire an experienced and reputable criminal tax defense attorney to take you through the voluntary disclosure process.  Only an Attorney has the Attorney Client Privilege and Work Product Privileges that will prevent the very professional that you hire from being potentially being forced to become a witness against you, especially where they prepared the returns that need to be amended, in a subsequent criminal tax audit, investigation or prosecution.

Moreover, only an Attorney can enter you into a voluntary disclosure without engaging in the unauthorized practice of law (a crime in itself). Only an Attorney trained in Criminal Tax Defense fully understands the risks and rewards involved in voluntary disclosures and how to protect you if you do not qualify for a voluntary disclosure.

As uniquely qualified and extensively experienced Criminal Tax Defense Tax Attorneys, Kovel CPAs and EAs, our firm provides a one stop shop to efficiently achieve the optimal and predictable results that simultaneously protect your liberty and your net worth.   See our Testimonials to see what our clients have to say about us!

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Public Contact: Dave Klasing Esq. M.S.-Tax CPA, [email protected]

SOURCE Tax Law Offices of David W. Klasing, PC