A simple mistake, oversight, or your accountant’s malpractice may trigger an IRS criminal investigation. Specifically, unreported income, a false statement, the use of an impermissible accounting or banking service, or declaring too many deductions are things that could initiate an audit, which could then rise to the level of an IRS criminal investigation process.
Jennifer Durham, an employee of the Rapid City Rush, a professional hockey team in South Dakota, pleaded guilty to wire fraud and tax evasion for embezzling $700,000 from the organization. While employed as the team’s office manager between 2010 and 2019, Durham falsified entries into accounting records to make it appear that the money she was stealing was spent on legitimate business expenses.
Durham paid herself $87,000 in mileage reimbursement and sales commissions, transferred nearly $285,000 from the team’s bank account to pay her American Express bill and transferred another $181,000 to her personal bank account. Durham also admitted to taking $214,971 in cash receipts to use for personal expenses and made payments totaling $7,712 to cover her family’s cell phone bill. She did not report the additional income to the IRS, causing a tax loss of $186,277 to the federal government.
The investigation began when new team owners discovered, “Inconsistencies and irregularities with regard to some bookkeeping handled by a single former employee.” As part of the plea agreement, Durham must pay restitution to the team totaling $700,000 and the IRS $186,277. She faces up to 45 years in prison.
At McCauley Law Offices, P.C., our lawyers will find a solution to your tax problems, no matter how complex your IRS issue is. View our services and contact us (or call 610-388-4474) to schedule a free consultation with one of our tax attorneys. View and purchase Gregory McCauley’s published work “TAXJAMS: Simple Solutions” on Amazon. From our office in Chester County, Pennsylvania, we find tax solutions for clients throughout the country.