Skip to main content
Please enter a legal issue and/or a location
Begin typing to search, use arrow keys to navigate, use enter to select

Find a Lawyer

More Options

Tax Fraud -- Some Lawyers' Biggest Temptation

By William Vogeler, Esq. on August 13, 2018 | Last updated on March 21, 2019

Spending too much money is a common temptation for many successful professionals, including lawyers.

Like professional athletes who sometimes burn through fortunes without saving for retirement, some attorneys will spend their money on a flashy BMW while student loans burn holes in their pockets. That's a money-management sort of thing.

The biggest temptation for some practitioners, however, is a criminal sort of thing. It's tax fraud.

Underreporting Income

Michael Cohen, for example, has been in the news for paying women hush money for the president. But his biggest problem may come from not reporting all his income.

The Wall Street Journal says federal authorities are examining whether Cohen underreported income from taxi medallions, and whether he inflated the value of assets to obtain loans for the taxi business.

Cohen worked with Evgeny Freidman, a disbarred lawyer, who pleaded guilty to tax fraud. He is reportedly cooperating with the investigation.

According to reports, Freidman managed Cohen's tax medallions in New York. Sometimes he paid Cohen cash in transactions that allowed him to keep extra income.

Cash Transactions

They say "cash is king" in real estate and other business deals, but large cash transactions can also be red flags for banks and tax authorities. It's one of the biggest challenges in the marijuana business, for example.

For lawyers who accept cash payments, there is also the temptation not to report the income. Even $500 retainers, which may not require written agreements in some states, can add up.

There are also dead giveaways for lawyers who underreport and overspend. Attorney Paul Manafort, for example, is in deep trouble for alleged tax fraud.

That's apparently what happens when you wear a $15,000, ostrich-feather jacket.

Related Resources:

You Don’t Have To Solve This on Your Own – Get a Lawyer’s Help

Meeting with a lawyer can help you understand your options and how to best protect your rights. Visit our attorney directory to find a lawyer near you who can help.

Or contact an attorney near you:
Copied to clipboard