Reality star indictment illustrates important lessons

| Sep 12, 2019 | Criminal/Civil Tax Litigation

Two reality starts that might be familiar names to residents of the Chicago area are now facing federal allegations of tax evasion and other federal charges. The couple has said that they are innocent of the criminal charges and have publicly blamed a former employee of theirs for the charges.

They say that the former employee made up information about them and presented falsified documents to the federal authorities. The couple’s accountant also faces the same charges and has also been accused of lying to federal investigators.

The couple is maintaining their innocence and have indicated that they plan to defend themselves against the charges. They of course have every right to do so and are well-advised to continue to rely on the help and advice of an experienced tax litigation attorney. After all, the couple could wind up spending years and prison in addition to being slapped with a very hefty fine and civil restitution penalties.

Still, there are some important lessons that Illinois residents can take away from this story even as it continues to develop. For one, the reality stars may have attracted the attention of the IRS by, on the one hand, suggesting that their tax bills were a financial hardship while, on the other hand, publicly leading a lifestyle many would perceive as lavish.

Another important lesson is that this indictment seems to have arisen in the course of a civil audit. As this blog has discussed before, civil audits can often, and with little warning, lead to the filing of criminal tax evasion charges. The majority of federal tax evasion cases arise out of civil audits, and even an unexplained suspension of a tax audit can be a sign that a taxpayer is under a criminal investigation.

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