Chicago, a well known hotspot for political corruption, can now add Alderman Patrick Daley Thompson to its long list of indicted Aldermen. The allegations stem from the failure of Washing Federal Bank that gave the Alderman a $219K loan to purchase a vacation home in Michigan.
When the bank was taken over by federal regulators for insolvency it was discovered that the Alderman had only made one payment on the loan in four years. During that period, he took a deduction for the interest payments that he didn’t make, hence the indictment.
Earlier in my career, I was a consultant on a couple of these evasion cases. The first question I would ask the attorney hiring me was whether or not they had received a retainer. Why? Because these cases generally cannot be defended.
Take a moment and think about how easy it is for the Feds to make a case. They have your income tax return; one that you signed certifying it to be correct. If they can prove that you either intentionally took a deduction over several years that you weren’t entitled to, what are you going to say?
Maybe something like, “My dog ate my homework?”
If they can prove that you had income that you intentionally didn’t report, what’s your defense. How about, “Well, I didn’t know that I received the money?”
These cases are black and white, no shades of grey.
The reason you don’t hear about more of them is the fact that they are so indefensible. You sit down with your attorney and a couple of Feds at the Klusczynzki Federal Building, they lay out a case that’s open and shut, offering you a deal. Normally that deal is three or four times what you would have owed if you had filed your taxes correctly in the first place.
You take the deal rather than going to prison.
If it’s really egregious or a headline grabbing case, they won’t offer a cash settlement. The penalty of income tax evasion is 12 months in a federal penitentiary, per year that’s filed incorrectly. That’s per year. If you did the same thing wrong on four consecutive years of filing returns, that’s 48 months of three hots and a cot, complemented by prison orange.
Those of you who know me, know that I don’t play any games. I’m tough on my clients, for very good reasons. My job is to protect you, and the easiest way that I can do that is by completing auditable income tax returns. The next time you think I’m wasting time by asking for something inconsequential, think about what I’m writing today. I’m just doing the job you hired me to do.
The next time you wonder whether or not you can get away with it, don’t. The next time you think the Feds are asleep at the wheel, don’t. They aren’t. Is your freedom really worth the money?
Given the allegations, I’ll bet Alderman Daley wished he hadn’t filed those returns.
Let me leave you with this.
It looks like the city and the state are finally relaxing some of the restrictions. Now we’ll be able to go outside without wearing a mask.
It’s going to be a beautiful weekend. Get outside and enjoy it. Do some gardening, Bike the lakefront. Take your kids to the park.
Take some time for yourself. Get some rest. Read a book. Center your soul.
We aren’t out of this thing yet. Let’s get through it together.
Accounting Solutions Ltd. stands ready to complete our mission and purpose of protecting you, your family, and your business. If there is anything you need, whether you are a current client or not, you have but to ask. I’m here, and I remain,
Accounting Solutions Ltd.
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