Posted by Amy Frushour Kelly
“…obviously the federal government likes my tax returns because I pay 750,000 to 1 million dollars just about every year so the federal government doesn’t have a problem with my taxes.” Todd Chrisley, star of the reality television program Chrisley Knows Best, made this claim on a national radio program in February 2017, but the Internal Revenue Service and the Department of Justice disagree. On August 13, a federal grand jury indicted Todd and his wife Julie on multiple counts of conspiracy, bank fraud, wire fraud, and tax evasion. The Chrisleys’ accountant, Peter Tarantino, has also been indicted on tax-related offenses.
Keeping in mind that defendants are presumed innocent and it is the government’s burden to prove the defendants’ guilt beyond a reasonable doubt, the allegations are numerous and serious. Let’s break them down:
Conspiracy to defraud numerous banks by providing false information, including falsified personal financial statements and fabricated bank statements when applying for and receiving millions of dollars in loans.
Using fabricated bank statements and a fabricated credit report that had been physically cut and taped or glued together when applying for and obtaining a lease for a home in California.
Conspiring with their accountant, Peter Tarantino, to defraud the Internal Revenue Service.
Failing to timely file income tax returns for the 2013, 2014, 2015, and 2016 tax years or timely pay federal income taxes for any of those years.
Obstructing IRS collection efforts, which included hiding income, lying to third parties about their tax returns, and (in Tarantino’s case) lying to FBI and IRS Criminal Investigation Special Agents.
Civil fraud penalties are severe: “If any part of any underpayment of tax required to be shown on a return is due to fraud, there shall be added to the tax an amount equal to 75 percent of the portion of the underpayment which is attributable to fraud.” Add to this the likelihood that the Chrisleys and Tarantino will face criminal charges. Federal tax evasion is a felony, punishable by fines and/or imprisonment up to five years. This is the tip of the iceberg. We don’t know what else may be revealed, and the indictment is a list of charges only.
The FBI takes allegations of bank fraud and wire fraud very seriously. Likewise, the IRS and Department of Justice have a zero-tolerance policy for conspiracy and tax evasion. Celebrities are not immune.
What can we learn from this? Obviously, honesty and punctuality are the best income tax strategies. Talk to your trusted advisor and plan ahead so you know in advance whether you’re going to face a problem. Remedies (that are legal!) are available, including payment plans. Finally, work with an accountant who won’t suggest or go along with lying to federal authorities. (Like Raich Ende Malter.)