September 2024 — Volume 113, Number 113
Coal Boss Tries to Dig His Way Out of Tax Evasion, Goes to Prison
Jason Svonavec, the owner of several companies, including a coal mining company, a crane company, and a cattle and agricultural company, was sentenced to one year and one day in prison for tax evasion and filing a false tax return.
Svonavec’s companies were all successful and in an IRS audit for tax years 2015 and 2016, he and his wife reached a settlement after appeal and were assessed $843,703 for 2015 and $808,749 for 2016.
In 2017, the coal mining company reported a pass-through income of $17,233,760 in gross receipts. In 2018 the company reported $24,590,379 in gross receipts. During that time, Svonavec built a 7,300-square-foot stone house on a 104-acre lot that was assessed a value of three million dollars in 2021.
According to the US attorney handling the case, “Jason Svonavec embarked upon a deceitful campaign to criminally expense much of the home’s construction costs, beginning with the general contractor, to electrical work, custom ironworking, the masonry, stonework, pool installation, among other elaborate features.” Svonavec categorized the home building expenses under the coal mining company and the crane company as repairs and maintenance, site supplies, product purchases, supplies and maintenance, and others.
In addition to the prison sentence, Svonavec agreed to pay $207,378 in restitution and $266,676.84 in penalties and interest.
Chiropractor Tries to Adjust Tax Returns, Ends Up in Legal Knots
An Alabama chiropractor, Gary Edwards, has been charged with tax evasion, filing false tax returns, and obstructing the IRS.
In 2015, Edwards agreed to file tax returns for 2009 to 2013. After filing, he refused to pay the 2.4 million dollars he reported that he owed. From 2015 to 2023, Edwards attempted to thwart all IRS collection efforts by transferring assets to his wife, submitting false information about his assets, filing false tax returns, and making false statements to the IRS. He also filed documents with a local court falsely claiming that Notices of Federal Tax Lien filed against him by the IRS had been dismissed.
If convicted, he faces up to 20 years in prison.
Gutter Guy Faces a Downpour of Consequences
Jeffrey Tome, the owner of a gutter installation and repair business in New York, pleaded guilty to filing a false tax return.
For tax years 2017 to 2021, Tome evaded taxes by cashing 1,679 checks made out to his business at a local check cashing facility. The checks totaled $1,719,283.45.
Tome did not inform his tax preparer about the checks, so his corporate returns did not include the 1.7 million dollars in income. He also did not include the net profits from the business on his personal returns, which allowed him to evade an additional $330,137 in taxes.
Tome used some of the funds from the checks he cashed to pay employees under the table. He paid $407,573.60 in wages to his employees in cash, and failed to pay $62,358.76 in payroll taxes on those wages.
Tome faces up to three years in prison, restitution to the IRS and a $250,000 fine.
Plumber’s Golden Scheme Flushed Down the Toilet
Claudio Poles, the owner of a Boston-based heating and plumbing business, was sentenced to four months in prison for filing false tax returns.
The 78-year-old businessman hid millions of dollars in company income by purchasing gold and silver bars that he classified in the company’s accounting software as purchases of boilers, materials, and other plumbing and heating supplies.
Poles purchased more than 10 million dollars worth of gold and silver bars with unreported business income and failed to disclose the purchases to his tax preparer.
On tax returns between 2019 and 2022, Poles reported losses on his individual returns of approximately $75,000 and excluded the business income he used to buy the gold and silver bars.
In addition to the prison sentence, Poles was issued one year of supervised release, a $200,000 fine, and ordered to pay $2,961,261 in restitution.
Builder Skips Payroll Taxes, Builds Rap Sheet and Ends Up Back in the Big House
Joseph Dickey, the owner of a construction company in Montana, was sentenced to one year and one day in prison and ordered to pay a $75,000 fine for failing to pay payroll taxes.
Dickey’s construction company, Alpine Customs, has employed as many as 60 employees. From 2018 to 2021, Dickey oversaw all accounting for the company and had payroll taxes taken from employee wages. The company bookkeeper and the IRS regularly instructed Dickey to release the payroll taxes but Dickey refused, ultimately owing $803,374 in employer and employee payroll taxes.
In addition to the prison sentence and fine, Dickey was ordered to pay $207,807 in restitution, which is the balance he owed in payroll taxes, penalties, and late fees, after already paying $600,000 before the trial.
Prison will be familiar to Dickey, as he had two prior criminal convictions on his record. In 2003 he was sentenced to one year in prison for assault with a weapon and in 2004 he was sentenced to one year in prison for criminal possession of dangerous drugs.
Gambling Mastermind Places Bets On Filing False Tax Return and Illegal Betting and Loses
Matthew Bowyer pleaded guilty to operating an illegal gambling business, money laundering and filing a false tax return.
Bowyer ran the business, which focused on sports betting, for over five years, and at times had more than 700 bettors. His operations were based in Southern California and Las Vegas, and he employed agents, sub agents, and casino hosts.
Bowyer’s business empire began to crumble when Dodger pitcher Shohei Ohtani’s interpreter, Ippei Mizuhara, was caught in a gambling scheme using the pitcher’s money and not his own. Mizuhara placed $142,256,769 in winning bets through Bowyer’s organization, and $182,935,206 in losing bets. Of this money, Bowyer transferred at least 9.3 million dollars to a casino via wire transfers as payments for markers.
Bowyer admitted to the IRS to falsifying his tax returns. In 2022 he claimed $607,897 in income, when in reality, his unreported income from the gambling business that year was $4,030,938. As a result, Bowyer owes the IRS $1,613,280 for tax year 2022.
As part of his plea agreement he will forfeit $257,923 in cash and $14,830 in casino chips that were seized at the time of his arrest.
He faces restitution, 10 years in prison for money laundering, five years for the illegal gambling business, and three years for the false tax return.
IRS Help Q&A
I just received notices that owe the IRS $74,367 for several years of back taxes but do not have the money to pay them. All I want to do is get them off my back and heard of something called an Offer in Compromise settlement. What is it and how do I qualify?
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The IRS considers your income, assets, expenses, ability to pay, and whether paying the full amount, even over time, would cause financial hardship. It’s important to remember that the IRS wants its money and will only accept an Offer in Compromise if it thinks it’s in the best interest of the government and it wouldn’t receive any money otherwise.
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Did you know?
In 1989, Money Magazine asked 50 tax preparers to calculate the taxes for a mythical family. The preparers came up with 50 different answers. The figures for the family’s tax bill ranged from $12,539 to $35,813. The accountant who created the test said the correct figure was $23,393.
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