In an ordinary tax evasion case, the IRS focuses on prosecuting persons who evade taxes by either not filing tax returns or who choose to falsify income and expense information on tax returns. However, in the case of Florida resident Michael Murray, he was prosecuted for his efforts to evade payment of taxes that were legitimately owed. As a result of his actions, he was sentenced to one year and one day in Federal prison, three years of supervised release, and must pay $4.3 million in owed taxes.
According to a press release from the Department of Justice, Michael Murray began evading taxes in 2001 when the IRS determined he had a tax debt of $889,520 for income he made in 1993. The IRS issued liens and levies against Murray's properties and companies. Instead of paying his tax debt, Murray diverted money and property for his personal use into other people's name. He also made false statements to the IRS about his assets and income. He then compounded his problems when he violated the levies the IRS had placed by writing checks to himself for his personal benefit. Murray was able to evade the IRS' collection efforts for ten years with these tactics. By that time his tax debt had become $4.3 million due to penalties and interest that accumulated.
The lesson to learn from Mr. Murray's case is that attempts to settle or reach payment agreements on IRS can be handled legitimately, or they can be handled the way which Mr. Murray chose to handle them. Programs like Offer in Compromise allow taxpayers an opportunity to settle back taxes if they qualify for the program.