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Thursday, November 20, 2008
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Mississippi Lawyer Pleads Guilty for Failing to File Tax Returns on Income Exceeding $2.5 Million

WASHINGTON – Marshall E. Sanders, a lawyer based in Vicksburg, Miss., pleaded guilty to two counts of failing to file income tax returns, the Justice Department and Internal Revenue Service (IRS) announced today.

According to documents filed with the court, Sanders failed to file tax returns for 2001 and 2002, despite having earned gross income of more than $2 million in 2001 and almost $500,000 in 2002. Sanders, as part of the plea, agreed to pay restitution taxes due and owed for years 2000 through 20002.

Additionally, Sanders, who has not filed a federal income tax return since 1994, agreed as part of his guilty plea to cooperate with the IRS in making a correct determination of his income tax liabilities for years 1995 through the present and to file complete and accurate tax returns for those years.

Sanders was indicted in May 2008 for three counts of income tax evasion for years 2000 through 2002. The indictment alleged that Sanders used his attorney escrow account to hold and dispense his personal income. If Sanders meets all of the conditions in the plea agreement, the United States will dismiss the indictment at sentencing.

The court has not set a sentencing date. For two counts of failing to file tax returns, Sanders faces a maximum sentence of two years of imprisonment, supervised release for not more than two years, and fines of no more than $200,000, plus the costs of prosecution.

"All taxpayers - regardless of profession - must comply with their federal tax obligations," said Nathan J. Hochman, Assistant Attorney General of the Justice Department’s Tax Division. "As is evident from Mr. Sanders’ guilty plea, failing to do so simply postpones the eventual need to comply at an even higher cost, including federal criminal prosecution and having to pay back taxes with interest and steep penalties."

"Our system of taxation is based on voluntary compliance by all citizens," said Eileen Mayer, Chief, IRS Criminal Investigation. "The majority of American taxpayers file accurate tax returns and pay their taxes timely; however, today's plea demonstrates that willful failure to file income tax returns is an action that comes with serious consequences."

Assistant Attorney General Hochman commended the IRS special agents who investigated the case, as well as Tax Division trial attorneys Kevin C. Lombardi and Michelle M. Petersen handled the prosecution.

More information about the Justice Department’s Tax Division and its enforcement efforts is available at