Example. An Ohio business man was sentenced to six months in prison, six months of home detention, and two years supervised release for attempting to evade nearly $170,000 in income taxes. He received income in the form of wages, non-salary payments, and corporate payments for his personal expenses. The personal expenses included: property tax and utility payments for his personal residence, as well as payments for a new furnace, air conditioner, air cleaner and humidifier; a down payment and loan payments for his daughter’s car; payments of his wife’s automobile insurance and car repair bills, college tuition payments for his nephew, as well as other personal expense payments.
Example. The sole proprietor of a plumbing shop was sentenced to 13 months in prison, three years of supervised release for tax evasion and ordered to pay approximately $130,000 in restitution to the IRS. The business owner willfully attempted to evade paying his federal income taxes by skimming gross receipts of his plumbing business and paying personal expenses from his business accounts and claiming them as business expenses.
As part of his tax evasion scheme, he instructed several of his employees to solicit checks from clients payable in his name, rather than in the name of the business. He then cashed these checks and did not deposit the monies into his business’ bank account. Since this money was not recorded on the books of the business, nor deposited into the business’ account, he did not include these gross receipts on his income tax return. He also deducted personal expenses as business expenses and similarly lowered the figures on his Schedule C profit, thereby substantially reducing his tax for tax years 2003 through 2006.