When people get in trouble with the federal government for not paying their taxes, serious penalties often follow. Whether inadvertent or deliberate, when someone finds himself as the subject of an IRS audit or investigation, it can be extremely stressful. If the apparent intent by a taxpayer is to defraud the IRS and circumvent tax laws, the results can be catastrophic.

A man who had businesses in Wilmington, North Carolina, now has to experience for himself what those penalties will be. The 65-year-old was sentenced on income tax evasion charges last month in federal court. The man had been accused of owning and operating three video gambling establishments, which were illegal under North Carolina law.

According to authorities, rather than report the income from the gambling businesses for 2004 and 2005, the man filed tax returns under the name of a furniture refinishing business. He claimed no income from this business on the returns; however, according to the IRS, he actually made nearly $500,000 from the gambling enterprises. Prosecutors say that this led to the government being underpaid by nearly $150,000.

As a result, the man was sentenced to just over a year in federal prison followed by two years of supervised release. The IRS also seized cash and currency worth more than half a million dollars, four vehicles, and even the man's home because they were all allegedly obtained as a result of the illegal businesses.

People in North Carolina who find themselves the target of IRS action are often benefited by consulting with an attorney experienced in tax matters and in negotiating with the IRS.

Source: CarolinaLive.com, "Little River Man sentenced for income tax evasion," Jan. 26, 2012