Alarming $219K Tax Compliance Case: 4 Lessons to Protect Your Future

Tax Relief Insights & IRS Help Articles

The High Cost of Ignoring Tax Compliance

In Houston, Texas, William Christopher Womack—owner of Intents Services LLC—learned the hard way what happens when tax compliance is ignored. By underreporting his income and concealing over $260,000 in actual business earnings, Womack continued to receive federal Social Security benefits while living well beyond his reported means.

Between 2019 and 2021, he reported just $12,000 annually while buying luxury items such as boats, RVs, and event tickets. The result? An IRS-determined tax loss of $219,599. Now facing restitution, penalties, and possible prison time, his case serves as a powerful warning for small business owners and taxpayers alike.

This story isn’t just about fraud—it’s about the importance of tax compliance. Whether you run a business or work a regular job, staying transparent with the IRS protects your income, freedom, and future.

How Womack’s Tax Fraud Scheme Worked

Court records show that Womack concealed income through multiple deceptive methods:

Check-Cashing Stores – Instead of depositing business receipts into an official business account, he cashed checks to hide the paper trail.
Fake Payroll Records – He wrote fraudulent checks to non-existent employees and vendors, disguising taxable income as payroll expenses.
Lavish Lifestyle Purchases – Despite claiming poverty-level wages, he spent large sums on boats, RVs, sporting events, and vehicles.

By deliberately underreporting, he kept his income low enough to remain under the $1,000 monthly threshold for Social Security benefits. Meanwhile, the unreported funds funded a lifestyle the IRS could—and did—track.

Legal Fallout: Penalties, Restitution & Prison

As part of his plea deal, Womack agreed to repay $219,599 in restitution to the IRS. But that’s only part of the punishment. His sentencing, set for October 14 by U.S. District Judge Jeffrey Brown, includes the possibility of:

Up to 3 years in federal prison
A maximum fine of $250,000
Loss of Social Security benefit eligibility

The case was investigated by the IRS Criminal Investigation (IRS-CI) Division, one of the toughest arms of federal law enforcement. Prosecuted by Assistant U.S. Attorney Brad Gray, it highlights how IRS-CI relentlessly pursues noncompliance with advanced tools and a conviction rate above 90%.

Learn more about IRS-CI’s mission here.

4 Key Lessons in Tax Compliance from the $219K Case

1) Tax Compliance Beats Fraud Every Time

Womack could have resolved his IRS debt through legitimate programs like:

Offer in Compromise (OIC)– settle for less than what you owe
IRS Payment Plans – spread payments over time
Penalty Abatement – reduce IRS penalties if you qualify

Instead, he chose deception, resulting in felony charges and public disgrace. Explore IRSProb’s Tax Settlement Services to see how you can resolve your debt legally.

2) Fraudulent Benefit Claims Multiply Penalties

This case wasn’t only about underreported income—it was also about fraudulently claiming Social Security benefits. By hiding income to maintain eligibility, Womack added another layer of legal consequences. Benefit fraud is aggressively prosecuted, often leading to double penalties: restitution to the IRS and permanent loss of eligibility. Small business owners can avoid compliance risks with IRSProb’s Small Business Tax Solutions.

3) IRS-CI’s Conviction Rate Proves Noncompliance Doesn’t Pay

With a 90% conviction rate, IRS-CI almost always secures a guilty verdict once a case goes to trial. Why? Because the IRS has unmatched tools for financial tracking:

Third-party reports from banks, employers, and vendors
AI-driven fraud detection systems
Whistleblower tips
Cross-agency collaboration (IRS + FBI + DOJ)

Once they investigate, it’s nearly impossible to escape penalties. If you fear an audit, protect yourself with IRSProb’s Audit Defense Services.

4) Back Taxes Should Be Addressed Early

Instead of concealing income, taxpayers with back taxes should:

File missing returns immediately
Seek penalty abatement if reasonable cause exists
Request Currently Not Collectible (CNC) status if unable to pay
File for IRS Appeals Representation to contest unfair rulings

Delaying compliance compounds penalties and increases the risk of criminal charges. Get started with IRSProb’s Back Taxes Services.

Deep Dive: How the IRS Detects Noncompliance

Many taxpayers believe they can “fly under the radar.” Womack likely thought the same—until the IRS traced his spending. Here’s how the IRS finds noncompliance:

Information Matching – Banks, employers, and payment processors file reports that the IRS compares against tax returns.
Lifestyle Audits – Spending patterns (boats, RVs, luxury cars) are compared with reported income.
Whistleblower Reports – Competitors, ex-employees, and even family members often report tax fraud.
Cross-Agency Collaboration – IRS works with FBI, DOJ, and SSA to investigate benefits fraud.

Step-by-Step Guide to Tax Compliance for Small Businesses

Keep Accurate Books – Use software like QuickBooks or Xero.
File On Time – Even if you can’t pay, filing avoids the “failure-to-file” penalty.
Pay Quarterly Taxes – Self-employed individuals must make estimated tax payments.
Separate Business & Personal Finances – Avoid cashing checks or commingling funds.
Work with Professionals – Tax attorneys and CPAs can help structure payments and settlements legally.

Check out IRSProb’s Payroll Tax Problem Defense for business owners struggling with compliance.

Frequently Asked Questions About Tax Compliance

Q1: What happens if I don’t file taxes but the IRS doesn’t notice?

The IRS eventually notices—third-party reporting makes it nearly impossible to hide. Penalties accumulate, and criminal charges remain a risk.

Q2: Can I settle my tax debt for less?

Yes, through programs like the Offer in Compromise. Eligibility depends on your income, expenses, and ability to pay.

Q3: How do IRS penalties add up?

Penalties include:

Failure-to-File Penalty – up to 25% of unpaid taxes
Failure-to-Pay Penalty – 0.5% per month
Fraud Penalty – up to 75% of unpaid taxes

Q4: What if I can’t afford professional tax help?

Consider payment plans with IRSProb or seek free initial consultations. Professional guidance often saves far more than it costs.

Quick summary of retiree tax relief insights for Texans

Case Summary: Houston business owner William Womack concealed $260K in income while fraudulently collecting Social Security benefits.

IRS Outcome: $219,599 restitution, loss of benefits, and up to 3 years in prison.

Key Lessons:

Tax compliance beats fraud — use legal settlement programs.
Benefit fraud compounds penalties — honesty avoids criminal charges.
IRS-CI conviction rate is 90% — hiding income almost always fails.
Settle back taxes early — avoid escalating penalties and fraud risks.

Action Step: Protect yourself with IRSProb’s Tax Settlement Services and other IRS relief options before problems spiral out of control.

Conclusion: Stay Ahead with Tax Compliance

The $219,599 tax compliance case of William Womack underscores the dangers of ignoring IRS obligations. What began as an attempt to save money and keep benefits escalated into fraud, restitution, and the possibility of prison.

The lesson? Tax compliance is non-negotiable. From filing on time to exploring settlement programs, staying transparent with the IRS is the only safe strategy.

If you’re struggling with IRS debt, facing collections, or worried about compliance issues, don’t wait until it’s too late.

Visit IRSProb.com today to explore: