written on behalf of Feigenbaum Law
Many people will do what they can to get a break on personal and corporate tax payments while staying within the confines of the law. However, sometimes even professionals will skirt around the rules in an attempt to provide illegal tax relief.
This week’s blog looks at a recent case regarding a Nevada man who was convicted on tax evasion charges and recently applied to be released from supervision. This decision serves as a good reminder of the serious consequences of tax evasion and the long-term detrimental effects that can come from such activity.
In United States v. Robert David Kahre, the defendant (“RK”) was indicted by a federal grand jury on 24 charges related to conspiracy and tax evasion. An article from the Las Vegas Sun details RK was indicted alongside 24 others, including his girlfriend, mother, sister, brother, and employees.
RK ran a business which provided various services including air conditioning, plumbing, tile/marble work, and painting and drywall. He also provided payroll services for his business, as well as other local companies.
Details confirmed that between 1998 and 2003, RK paid his employees and employees of his payroll clients, in gold, silver, and cash, in order to avoid paying taxes or reporting the income to the Internal Revenue Service. The IRS stated that within the five-year period, no taxes were reported or paid from RK’s businesses or his clients. Over $114 million was paid out in unreported cash, with almost $20 million paid to his own employees. At trial, RK was sentenced to 190 months in prison followed by three years of supervised release, and was ordered to pay over $16 million in restitution.
RK was prematurely released from prison due to the COVID-19 pandemic and subsequently began his time under supervision. In summer of 2022, RK applied for an early release from supervision, having served just 15 months.
RK claimed that he wanted to seek employment outside of Nevada, as he was struggling to obtain work within the state. He stated that he had been hired by one company but was terminated shortly after his criminal record was discovered. He added that he had applied for 80 positions with employers in and around Las Vegas without any luck.
RK told the court that he wanted to move to Montana in order to rebuild his life and career in order to fulfill his restitution obligation.
The court confirmed that it is entitled to terminate supervised release after one year if it is “satisfied that such action is warranted by the conduct of the defendant released and in the interest of justice.” Further, common law states that mere compliance with the terms of supervised release is insufficient on its own to warrant early termination.
The court determined that RK had not met the low threshold of the terms of his release, specifically around the obligation to pay restitution at not less than 10% of his monthly gross income. RK made his first payment more than one year after he was released from prison. The court reminded RK that one of the conditions of his release was to obtain steady employment which had yet to be fulfilled.
The court ruled that based on RK’s failure to make regular restitution payments and his failure to find long-term employment, that his application for early release from supervision was denied, despite the difficulties he claimed he was experiencing.
The court further referenced a previous decision whereby early release from supervision was denied for someone in a similar set of circumstances. The court held that RK had already benefitted from a significant reduction in the amount of time he was incarcerated, and that reducing his time under supervision would be inconsistent with “the sentence and sentencing range established.”
Work with the trusted lawyers at Feigenbaum Consulting for assistance with your tax planning and compliance needs
If you require assistance with personal tax planning and compliance or are looking for advice related to corporate taxes, Feigenbaum Consulting has the experience to help. Our professional and friendly team will ensure that you limit your tax obligations while staying on the right side of the law. We assist clients all over the United States and Canada, even when litigation is necessary. To speak with a member of our team and learn how we can help you, call us at 1-877-275-1268 or contact us online.