Essay Sample on Tax Evaders Charged: US vs. Fackler & Kroupa

Introduction

Tax is the main source of government revenue in the United States of America. Therefore, every individual is required to pay taxes accordingly. In this case of the United States of America v. Robert E. Fackler and Diane L. Kroupa, Robert Fackler and his wife were charged for tax fraud. Each of them was charged with accounts of evading to pay taxes, subscribing and making false tax returns, and obstructing the Internal Revenue Service (IRS) audit. Since 2004, the two have been filing returns under "Married Filing Jointly," and during that time, Fackler was a political consultant and self-employed lobbyist while the wife was United States Tax Court, Judge.

Is your time best spent reading someone else’s essay? Get a 100% original essay FROM A CERTIFIED WRITER!

Save 25%

According to Lewis, Allison, and Center for Public Integrity (2002), there are different ways of evading to pay taxes including omitting or underreporting income, overstating a return's deductions, making false entries in records, stating the personal expenses as business expenses, and engaging in a sham transaction. Fackler and Kroupa's main aim was to evade payment of taxes, and they did this in different ways. One of the ways was deducting the personal expenses they incurred as business expenses. It is not right to report personal expenses as business expenses. Unfortunately, the personal expenses were associated with Easton Residence, Plymouth Residence, taxi and limousine fees for traveling to tax court business, and others. It is clear that the expenses are personal, so Fackler and Kroupa just wanted to defraud the state. The other way was to conceal reimbursed expenses for Fackler's company Grassroots Consulting, canceling income indebtedness, and providing misleading and false presentations during the audit that was conducted in 2016.

Overstated expenses include the item that was incurred legitimately as business expenses, but they then over claimed (Lee, Dobiyanski, & Minton, 2015). In this case, the receipts are usually altered in supporting that the expenses were spent in reality, but they exceed the actual payment. Furthermore, reimbursement of expenses is for purposes of business only, and the receipts can be submitted for the purpose of business reimbursement when the expenditures were personal (Lee, Dobiyanski, & Minton, 2015). Therefore, instead of Fackler and Krouper stating the reimbursement expenses, they got from Grassroots consulting, they decided to conceal them.

From the report, it is evident that the defendants deceitfully claimed their personal expenses that include utilities, clothing, music lesson, spa fees, jewelry, vacation costs, and personal residence rent as deductible expenses. The expenses had an impact on the gross income, and it made the taxes to be understated. Through this case, it can be noted that even individuals holding high positions in the government can defraud the government by not paying their taxes, yet the wife was a United States Tax Court Judge who was supposed to obey the taxation laws.

Kroupa was a former tax court judge, and in her position, she dealt with people who lied on the taxes they stated. This issue makes the allegations of the two defendants to be troubling. Reporting one's personal expenses to be business expenses is never tolerated in the United States of America. Also, the taxpayers are expected to follow the law whether one is a government official, individual, or business owner, we are expected to follow the rules.

In the United States of America's federal law, tax evasion is the illegal process in which a taxpayer payment or assessment of the tax which is imposed by the Federal Law. The 26 U.S.C. 7201 tax code states, "Any person who willfully attempts in any manner to evade or defeat any tax imposed by this title or the payment thereof shall, in addition to other penalties provided by law, be guilty of a felony and, upon conviction thereof, shall be fined not more than $100,000 ($500,000 in the case of a corporation), or imprisoned not more than 5 years, or both, together with the costs of prosecution." From this tax code, the judge handling Fackler's and Krouper's was justified to imprison them.

The law requires an individual to report any income that he or she gets at any given time, including the one from the sale of land. Unfortunately, for the case of Kroupa, she failed to report about $44,520 that she received from selling a parcel of land in South Dakota, and this made their taxable income, gross income, and the total tax to be understated falsely. Even after receiving money from the sale of land, Kroupa told the tax preparer that she did not get money from the sale of that land.

The United States Tax judge and the husband overstated the expenses knowingly as they are of the stated rules regarding tax payment being that the wife worked as a taxation judge. They also evaded paying tax by offering the tax preparer with false information regarding the income they received and deductions of the business that were incurred with their company 'Grassroots Consulting'.

Conclusion

In conclusion, it is important for every individual to file their taxes correctly at any given time. For instance, now, the people whose cases were decided by Kroupa might not be impressed even to assume the best regarding this indictment. They may wonder the way someone who engaged in tax fraud made decisions regarding their cases. Therefore, this case was a rare one is it involved someone working for the government, and what she went against concerns her profession.

References

Lee, B. B., Dobiyanski, A., & Minton, S. (2015). Theories and Empirical Proxies for Corporate Tax Avoidance. Journal of Applied Business & Economics, 17(3). http://digitalcommons.www.na-businesspress.com/JABE/LeeBB_Web17_3_.pdf

Lewis, C., Allison, B., & Center for Public Integrity. (2002). The cheating of America: How tax avoidance and evasion by the super-rich are costing the country billions, and what you can do about it. New York: Perennial.