If you owe the IRS taxes, they can file a federal IRS tax lien against you!Â With a tax lien filed against you or your business, your credit is affected.Â It shows up on your credit report and will make it difficult, or impossible, to obtain financing for an automobile or a home.Â How does an IRS tax lien get filed against you?Â Â A great example isÂ this man in Akron, Ohio, who found all sorts of ways to evade taxes.
Daniel L. French, of Akron, Ohio, was sentenced to eight months in prison, to be followed by three years of supervised release, for attempting to evade personal income taxes for the year 2003.
French pleaded guilty to the charge in a written plea in which he also acknowledged he attempted to evade his 2002 taxes and filed false 2002 and 2003 S Corporation returns for a corporation he previously owned and operated under the name D.L. French Co. Inc.
According to the plea agreement, French filed false S Corporation returns (Form 1120S) for the years 2002 and 2003, whose deductions for purported corporate payments for â€śshop supplies and partsâ€ť and â€śsubcontract laborâ€ť were in fact disbursements for his personal benefit.
Among these disbursements were checks deposited into a nominee bank account French controlled. As a result of the overstatement of costs, the corporate returns also understated the corporationâ€™s income, which was reportable on Frenchâ€™s personal returns as distributive income. French attempted to evade his personal income taxes for 2002 and 2003 by filing false tax returns on which he understated his income and tax liabilities by reporting his falsely understated business income.
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