Tax Law
IRS can collect $371M from former tax lawyer, appeals court rules
A former tax attorney who helped his wealthy clients avoid paying federal taxes has to immediately pay the IRS $371 million in restitution, a federal appeals court has ruled. (Image from Shutterstock)
A former tax attorney who helped his wealthy clients avoid paying federal taxes has to immediately pay the IRS $371 million in restitution, a federal appeals court has ruled.
In 2013, then-lawyer Paul Daugerdas was found guilty in New York on multiple counts of tax evasion, mail fraud and conspiracy. He argued that the IRS could not collect the full amount that he owed the government upfront.
The 7th U.S. Circuit Court of Appeals at Chicago, however, held that federal tax law permits the IRS to both “assess and collect restitution as a civil tax liability without waiting for payments under a criminal judgment,” according to coverage by the JDJournal.
The case centers around the difference between criminal restitution and civil tax collection. In Daugerdas’ criminal case, his sentencing allowed him to repay gradual restitution with monthly payments based on a percentage of his income following his release from prison in 2024.
The appeals court’s ruling allows the IRS to seek immediate collection through asset seizures, liens and levies.
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