John Karoly Jr. recently pleaded guilty to Tax Evasion charges. He's guilty of three counts of willfully filing false tax returns and for failing to pay taxes on $5.2 million in income. John Karoly Jr. may have to pay a $750,000 fine in addition to the $1.9 million he agreed to pay in back taxes to the IRS. If that's not enough, he faces prison, suspension of his law license, or disbarment.
What happened? Basically, John Karoly Jr. got greedy. He received $4.15 million in fees but only reported $3.12 million of his earnings to the IRS. He used the extra 1 million of the IRS's money to fix up his pool and his home. The IRS doesn't take that lightly...
But wait, there's more: John Karoly Jr. received a $938,125 fee and reported only $92,000. He bought $70,000 worth of stock and claimed it as a "client expense" and he will soon be tried for making a $500,000 "Donation to charity" that was supposedly used for personal expenditure.
Listen up, Lawyers: It comes a surprise to many that attorneys often get into trouble with the IRS. They know the laws, but they'll disregard them or push their boundaries. But with Tax Evasion, your careers are on the line. Don't even think about bending or breaking the tax laws, because you will get caught.