A recent press release from the U.S. Department of Justice announced that three Utah based tax return preparers were indicted for tax crimes. Sergio, Alissa, and David Sosa were all charged with conspiracy to defraud the United States.
Per the press release:
Sergio Sosa was also charged with one count of tax evasion, and he and his children were also each charged with one count of corruptly endeavoring to obstruct the administration of the internal revenue laws.
According to the indictment, Sosa owned and operated Sergio Central Latino (SCL), a tax return preparation business in Orem, Utah, where both Alissa and David worked. From 2003 through 2017, Sosa allegedly did not timely file his personal tax returns and after multiple audits, the Internal Revenue Service (IRS) determined that he owed more than $750,000 in unpaid taxes. When the IRS began collection efforts, Sosa and his children allegedly agreed to obstruct IRS collection of the outstanding taxes by hiding Sosa’s personal assets, residential properties, and by titling SCL in the children’s names.
The indictment also alleges that when the IRS suspended SCL’s ability to electronically file client tax returns due to Sosa’s unpaid taxes, David Sosa changed SCL’s business name and obtained electronic filing authorization in a third party’s name. It is further alleged that Alissa Sosa falsely represented to the IRS that she owned a residence that was, in fact, her father’s, and that she withdrew funds from an account that she knew had been levied by the IRS. As of 2019, Sosa allegedly owes more than $1.1 million in taxes, penalties, and interest.
Per the Criminal Resource Manual, conspiracy to defraud the United States is charged under 18 U.S.C. § 371 stating “[i]f two or more persons conspire either to commit any offense against the United States, or to defraud the United States, or any agency thereof in any manner or for any purpose”. The factors for whether an activity defrauds the government under 18 U.S.C. § 371 are laid out by the Criminal Resource Manual as the following:
According to the Tax Division’s manual, the elements of a charge for tax evasion are
Finally, the three family members were charged with obstructing the administration of IRS laws. This charge is outlined under 26 U.S.C. §7212(a), better known as the “Omnibus Clause”. The Tax Division’s Manual states that in order to prove that a violation has occurred, the government must prove beyond a reasonable doubt that the defendant has in any way
The press release continues to discuss possible sentences for this case:
“If convicted, the Sosas each face a statutory maximum sentence of five years in prison for the conspiracy charge and three years in prison for corruptly endeavoring to obstruct the administration of the internal revenue laws. Sergio Sosa faces an additional five years in prison for tax evasion. The Sosas also face a period of supervised release, restitution, and monetary penalties.”
All persons who are merely charged with crimes are presumed innocent until proven guilty. Furthermore, sentences can vary depending on several factors which vary from person to person. This blog post does not implicitly or explicitly suggest there is basis to the prosecuting agency’s allegations or take any position on the strengths or weaknesses of the government’s positions.
Posted on 02/04/2020 by Benjamin Tu