Many similarities exist between the practices used to launder money and the practices used in tax crimes, so much so that the IRS barely differentiates between the two. According to Uncle Sam, “money laundering is in effect tax evasion in progress.” This is the attitude the IRS copped in relationship to Al Capone, who, when convicted, was notoriously aghast: “This is preposterous,” declared the mob boss. “You can’t tax illegal income!” To his dismay, Al Capone was wrong about that. All income – legal and illegal – is taxable.
What’s the difference between money laundering and tax money laundering? Money laundering generally consists of depositing funds generated by illegal activity into a legitimate bank account in a concentrated effort to conceal the illegal activity. Tax money laundering involves much the same thing, with the added twist that the crime committed is considered a tax crime in and of itself.
Investigations into tax money laundering are often launched as part of larger investigations into tax crimes, such as willfully evading taxes and aiding and abetting to defraud the government. But there are other tax crimes that can lead to a money laundering investigation as well. For instance, parties handling financial transactions in excess of $10,000 must report the transactions to the IRS. Deliberately dividing the transactions into several smaller ones to elude notice by the IRS constitutes a tax offense. Often illegally gained money is moved out of the country, then brought back in “clean” form, as if it were loan proceeds. Sometimes illegally obtained cash is comingled through a variety of business activities to make it appear that the money was derived legally.
The punishment for tax money laundering is severe: penalties, fines, and imprisonment. If you believe you might be the subject of an IRS investigation concerning tax money laundering, you risk losing all your personal and business assets, not to mention your freedom.
It can’t be said often enough: the IRS is famous for being able to nab criminals when no other government agency can. If the IRS has targeted you for money laundering, immediately contact Law Offices of Christy Lee, P.C. You need counsel trained in criminal tax matters to defend you before one of the most powerful agencies in the country. Call our tax boutique today to hear how we can assist you with your tax-related criminal matter.