Every April, millions of people across the United States were faithfully filing taxes, stressed, and worried that even a small mistake could lead to IRS audits or financial penalties.
This is because, in the case of so-called “average taxpayers,” intentionally failing to pay taxes or hide their income can lead to fines, prison time and prison time, and life-long criminal history.
But if you’re rich or influential, will the outcome of tax evasion be the same?
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This week, two reality TV stars and a Florida businessman convicted of tax evasion received presidential pardon from Donald Trump.
The circumstances surrounding their crime and tolerance rekindled debates over US equity, influence and tax enforcement. Curious? Please continue reading.
Trump forgives Crulis, Social Security and Medicare “theft”
Todd and Julie Chrisley, the couples behind the reality television show “Chrisley Knows Best,” have been forgiven by President Donald Trump. Here are some backgrounds.
In 2022, federal ju umpires discovered that the bank was found guilty of stealing fraud from more than $30 million and avoiding federal taxes by hundreds of thousands. The booker presented evidence that Chrisleys used fake documents to secure a large loan, and funneled the shell company to avoid handing over the bank by funneling the revenue from television shows through the shell company. unpaid.
Todd was sentenced to 12 years in prison, and Julie was seven years for banking and tax fraud, but Trump granted a full pardon and an unconditional pardon on May 27th.
In the release at the time of Coniction, Keri Farley, a special agent in charge of FBI Atlanta, said:
“As this ruling proves, justice blinds your fame, fortune and position when you lie, steal, and steal. The FBI is proud to work with the law enforcement partners in the IRS and the US lawyers’ office to pursue and prosecute individuals driven by greed to avoid the law.”
Posted online this week with Chrisley’s daughter Savannah Chrisley, Trump said of the couple’s tax evasion:
In particular, Savannah Chrisley took on the Republican National Convention in Milwaukee last year. In her remarks, she criticized the US Department of Justice (DOJ) and accused the Biden administration of using DOJ for political purposes.
Note: DOJ began accusations against Chrisleys during Trump’s first term as president. The conviction and sentence of the ju judge was informed during the Biden administration.
Another famous Trump pardon winner this week is Paul Waltzak, a Florida medical executive who ran several companies.
Walczak was convicted last year after pleading guilty to a tax crime, including paying more than $10 million in pay tax, which was withheld from the salaries of more than 600 employees. The DOJ claimed that funds aimed at Social Security, Medicare and federal income taxes were used to fund Walczak’s personal expenses, including $2 million yachts, luxury vehicles and high-end shopping.
The Justice Department documented that between 2016 and 2019, Walczak withheld nearly $7.5 million from employees and failed to pay an additional $3.5 million in employer pay tax. It is also said that since 2018, he withdrew a salary of $360,000 and transferred $450,000 billed from his business account to $4025, which was charged in 4025, but has stopped filing personal income tax returns since 2018. Reparations and a two-year supervised release were given.
Walczak’s mother, Elizabeth Fago, is a political fundraiser and is known to be a Trump supporter. Shortly before her son received his pardon, she reportedly attended a $1 million fundraiser at Mar-A-Lago, per 100 people.
Fago lobbyed for the release of his son at the event, according to multiple news reports, including The New York Times. Less than two weeks after Walczak’s April ruling, President Trump granted him a complete and unconditional pardon.
Note: The Justice Department brought charges against Paul Waltzak during Donald Trump’s first term.
Tax evasion vs. tax avoidance
(Image credit: Getty Images)
It is important to note that each of these three pardons issued by Trump includes federal tax evasion. Tax avoidance and tax evasion are often confusing, but distinctions are important. One is legal, the other is not legal
Tax avoidance involves lowering tax bills using legitimate strategies. This includes, for example, deductions such as mortgage interest, contributions to retirement accounts such as 401(k) and IRAs, and taking advantage of tax credits for education and energy-efficient housing improvement.
Lawmakers have incorporated these and other legitimate methods into tax law, using millions of taxpayers to legally reduce the amount owed to the IRS.
Tax evasion is illegal, on the other hand. It is a crime in which intentionally hiding income, forged records, and/or failed to report revenues to avoid paying taxes. The IRS can impose large fines, penalties and even prison time on people who avoid taxes.
For example, in Chrisley’s case, the prosecutor proved to the ju judge that the couple would forge documents to secure a massive loan, spend lavishly on luxury goods, and dodge the $500,000 IRS tax bill by hiding their income from television shows.
Why is this important? For example, in the case of Walczak, payroll taxes can help fund social security and Medicare for more than 65 million people nationwide. When someone is tricking those taxes, it can mean that there is less money for the program people are relying on.
The IRS points out that almost 70% of revenue comes from employment taxes withheld from payroll, but unpaid payroll taxes remain problematic. The Government’s Accountability Office (GAO) reported that as of 2023, it would still exceed $79 billion after government collection efforts.
Therefore, tax evasion is cutting the resources of these important programs.
Flax’s IRS tax enforcement?
It is noteworthy that the IRS landscape has changed dramatically since Trump took office in his second term as president.
Under the Biden administration, there was a period of employment and modernization, focusing on compliance and enforcement with the so-called wealthy “tax cheats,” but the Trump administration overturned the course.
As reported by Kiplinger, more than 20,000 IRS employees have withdrawn from January through the Trump administration’s postponed resignation program. There are thousands of layoffs or early retirements. Management (TIGTA) Report.
Trump also abolishes the IRS and supports so-called external revenue services (“ERS”) that rely on tariffs on income taxes.
This sudden cut in IRS staff has not been noticed. Some taxpayers reportedly interpreted miniaturization and reduced public firing and public firing as signals that audits or prosecutors’ risks were lower than they had been in years.
Some experts warn that perceptions can lead to more aggressive tax avoidance or avoidance. The lack of staff auditors means that, like the heart of recent Trump pardons, complex cases involving wealthy individuals, businesses and payroll tax fraud are unlikely to be pursued.
Treasury officials argue that new technologies and AI will help offset the losses of IRS officials, but at least in the short term, it is likely that the agency’s ability to enforce tax laws and close tax gaps has weakened.
As a result, the current environment and Trump’s latest pardon leave much of a questioning whether IRS tax rules still apply equally, and whether now is somehow a safer time than deceiving taxes.
Of course, many experts warn that avoiding taxes remains illegal and poses significant risks regardless of the current state of IRS and Trump’s enforcement of control.
