Lessons From the Thomas Goldstein Sentencing By Frances A. Tomes, Esq., New Jersey Tax and Litigation Attorney

Direct answer Most people do not go to jail simply because they owe the IRS. Criminal risk grows when the government believes a taxpayer knowingly hid income, created false records, moved money, or lied to the IRS. The amount owed matters, but a pattern of willful conduct often matters more.

Taxpayers who owe money to the IRS often ask if unpaid taxes are criminal cases. The good news is that while technically the law says yes, most tax-debt cases are civil cases, not criminal cases. The IRS usually wants taxpayers to file missing returns, pay what they can, and enter a proper resolution program. But unpaid taxes can become a criminal case. The risk can change when the IRS believes a person purposely hid income, moved money, created false records, or lied to the government.

At Tomes Law Firm, our New Jersey tax team consists of attorneys, CPAs, and an enrolled agent who is a former IRS professional. We look at the tax debt, the financial facts, and any possible criminal warning signs. This article explains what New Jersey taxpayers and business owners can learn from the recent criminal tax case involving attorney Thomas Goldstein.

Why Did Unpaid Taxes For Thomas Goldstein Become a Criminal Case?

On July 24, 2026, attorney and Supreme Court blog co-founder Thomas Goldstein was sentenced to six years in federal prison. He was also ordered to pay more than $3.1 million in restitution.

According to the United States Department of Justice, Goldstein did much more than simply fall behind on his taxes. He also:

• Hid millions of dollars in gambling income.
• Used foreign bank accounts to move gambling winnings.
• Sent legal fees to his personal bank account.
• Directed people to pay his personal creditors instead of paying him directly.
• Recorded personal gambling debts as law-firm expenses.
• Filed false personal and business tax returns.
• Continued spending large amounts on travel, gambling, and luxury items while failing to pay the IRS.
• Left millions of dollars in debts and unpaid taxes off mortgage applications.

A jury convicted Goldstein of tax evasion, helping prepare false tax returns, willfully failing to pay taxes on time, and making false statements to mortgage lenders.

The IRS Also Prosecutes Six-Figure Tax Cases

The Goldstein case involved millions of dollars, but criminal tax cases are not limited to wealthy or famous taxpayers. The Justice Department also brings cases involving tax losses in the six figures.

In July 2026, for example, a tax preparer received 18 months in prison for participating in a false-return scheme that caused between $250,000 and $550,000 in tax losses. The amount matters, but the government also looks closely at whether the conduct was repeated, planned, hidden, or continued after warnings.

Important warning A taxpayer should never assume that a six-figure tax problem is too small to attract the attention of IRS Criminal Investigation. The amount may attract attention, but willful conduct creates the greater criminal risk.

Can You Go to Jail Simply Because You Owe the IRS?

Usually, no.

People often owe the IRS because of job loss, divorce, illness, business problems, poor financial decisions, or a tax bill they could not afford. Owing money – even a very large amount – does not automatically mean the taxpayer committed a crime.

Most IRS collection cases can be addressed through options such as:

• An installment agreement.
• An offer in compromise.
• Currently not collectible status.
• Penalty relief.
• A challenge to an incorrect tax assessment.
• Bankruptcy, when the tax debt qualifies.
• Filing missing returns and bringing the taxpayer back into compliance.

The amount owed matters, but the taxpayer’s actions usually matter more when the government is deciding whether a case may be criminal.

What Turns a Tax Problem Into a Possible Criminal Case?

The key issue is often whether the taxpayer acted willfully. In plain English, that means the person knew what the law required and purposely chose to break it.

Hiding income

A taxpayer may face greater risk if income was placed in another person’s account, deposited overseas, received in cash but left off the books, or directed to creditors so it never appeared in the taxpayer’s account.

Creating false business expenses

Personal expenses cannot be changed into business deductions simply by paying them from a business account. In Goldstein’s case, the government said personal poker debts were recorded as law-firm expenses.

Giving false information to an accountant

A CPA or tax preparer can only work with the information provided. Hiding bank accounts, cash income, business receipts, or other important facts from the preparer can be evidence that the taxpayer acted on purpose.

Lying to the IRS or a lender

False statements can make a difficult situation much worse. This may include lying during an IRS interview, creating fake documents, backdating records, or leaving major debts off a loan application.

Moving or hiding assets

Transferring a home, business, vehicle, or bank account to a family member after IRS collection begins can create serious problems. The IRS may view the transfer as an attempt to hide assets or avoid collection.

Double bookkeeping records

It is the old set of I have one set of books for me and one set of books for the government. The IRS has a tremendous ability to determine false records.

Not recording cash properly

When the IRS does an audit, they look at bank statements and third party invoicing and records. It is easier than you think for them to spot missing cash that is not recorded as income .

What Are Common Criminal Tax Warning Signs?

A taxpayer should speak with a tax attorney before contacting the IRS if any of these warning signs exist:

• IRS Criminal Investigation has requested an interview.
• An IRS special agent has appeared at the home or business.
• A bank, accountant, customer, or employee received an IRS summons or subpoena.
• Large amounts of cash were not reported.
• Business and personal money were mixed together.
• Income was deposited into accounts belonging to other people.
• Foreign accounts or cryptocurrency were not reported.
• Personal expenses were claimed as business deductions.
• Payroll taxes were withheld but not paid.
• Returns were not filed for several years.
• Records were changed, destroyed, or created after an IRS request.
• A former employee, business partner, or spouse may have reported the taxpayer.

These facts do not automatically prove a crime. They do mean the case should be reviewed carefully before anyone speaks to the IRS or files a return.

Should You File Missing or Amended Returns Right Away?

Not always.

Filing missing returns is usually an important step in resolving a tax problem. However, when there may be criminal exposure, filing a new or amended return without legal advice can create evidence that the government may later use.

The return must be accurate. The attorney may also need to decide whether the taxpayer should use the IRS Voluntary Disclosure Practice or another method of coming into compliance.

The IRS Voluntary Disclosure Practice may help certain taxpayers who willfully broke the tax laws come forward before the IRS begins an examination or criminal investigation. It does not guarantee immunity from prosecution, and timing is critical.

If the IRS already received information from another person or government agency, it may be too late to make a timely voluntary disclosure. This is why taxpayers should not delay getting advice.

What Should You Do if an IRS Special Agent Contacts You?

You have the right to remain silent and speak with an attorney.

Be polite, but do not answer questions immediately. Do not guess, make excuses, destroy documents, or try to explain the situation without understanding the legal risk.

Ask for the agent’s name and contact information. Then contact an experienced criminal tax attorney. Anything you say may become part of the government’s case. Even a statement that seems harmless can conflict with a tax return, bank record, email, or statement from another witness.

Perspective: Frances A. Tomes, Esq.

From Frances Tomes, Esq. “In my experience, people often make a serious tax problem worse because they panic. They call the IRS without preparing, give an answer they are not sure about, or rush to file returns before the records have been reviewed. The better approach is to slow down, learn what the IRS may already know, and develop a careful plan.”

Before recommending a course of action, we need to understand:

• What returns were filed.
• What income was reported.
• Where money was deposited.
• How the business records were kept.
• Whether the taxpayer gave complete information to the accountant.
• Whether the IRS has already contacted third parties.
• Whether any action could look like an attempt to hide income or assets.

Once we understand the facts, we can build the safest plan for moving forward.

How Can Tomes Law Firm Help?

Tomes Law Firm helps New Jersey individuals and business owners address IRS tax debt, missing returns, audits, collection action, and matters involving possible criminal-tax concerns.

Our team approach allows us to examine both the legal and financial sides of the case. We can identify warning signs, obtain IRS records, review returns and financial documents, communicate with the IRS, and develop a strategy based on the client’s actual level of risk.

If you owe the IRS, have unfiled returns, or are worried that something on your returns may not be correct, getting advice early may preserve options. Contact Tomes Law Firm to schedule a confidential consultation before speaking with the IRS or taking steps that may be difficult to undo.

Frequently Asked Questions

Does owing more than $100,000 make my tax case criminal?

No. A large balance may receive more attention, but the amount alone does not prove a crime. The government looks for willful conduct such as hiding income, using false records, or lying.

Can IRS Criminal Investigation prosecute a six-figure case?

Yes. DOJ cases show that taxpayers and preparers can face prosecution and prison for six-figure tax losses.

Should I call an IRS special agent back?

You should first speak with an attorney who understands criminal tax matters. You may provide the agent’s contact information to your lawyer.

Can I fix the problem by filing amended returns?

Sometimes, but filing an amended return without a careful legal review can create additional evidence. The right approach depends on whether the conduct was a mistake or was willful.

Is voluntary disclosure guaranteed to prevent prosecution?

No. A timely, truthful, and complete disclosure may reduce the risk, but the IRS states that it does not automatically guarantee immunity.