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Colorado Tax Defier Sentenced to Prison for Evasion

A homebuilder and the owner of Tarryall River Log Homes was sentenced to 60 months in prison yesterday for tax evasion, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division.

According to court documents and evidence presented during the trial, Lawrence Martin Birk founded a sole proprietorship, Tarryall River Log Homes LLC, in 2000. Although the company, which sold and built log homes, was profitable, Birk did not voluntarily pay federal taxes on its income. When the Internal Revenue Service (IRS) began collection efforts, including visiting Birk at his home, he hired a tax firm to prepare eight years’ worth of delinquent tax returns. However, Birk concealed pertinent information from the tax firm, including over $400,000 of retirement distributions that he funneled through a sham company. After filing his delinquent tax returns, which omitted the retirement income, Birk still did not pay what the returns acknowledged was due and owing. Instead, he sent the IRS threatening correspondence that espoused the frivolous tax arguments of known tax defier organizations.

After being notified that the IRS intended to seize money from his bank accounts for taxes owed, Birk took steps to shield his money against the IRS’ collection efforts. Immediately or shortly after depositing funds into his bank account, Birk purchased cashier’s checks to reduce his balance and impede the IRS’s ability to seize the money. Birk’s outstanding tax liabilities, including taxes, interest, and penalties, were over $2 million for 1998 to 2005. He has not filed returns or made any tax payments for the 2006 through 2018 tax years. To date, his debt is more than $3.5 million. 

In addition to the term of imprisonment, Judge Blackburn also ordered Birk to serve three years of supervised release and to pay restitution to the IRS in the amount of $1,858,826.

Principal Deputy Assistant Attorney General Zuckerman commended the IRS agents who conducted the investigation, and Tax Division Assistant Chief Elizabeth C. Hadden, Trial Attorney Christopher Magnani, and Paralegal Specialist Saundra Burgess, who prosecuted the case.

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