May 9, 2012
Department of Justice
United States Attorney William C. Killian Eastern District of Tennessee
Lebanon, Virginia Man Pleads Guilty to Filing False Income Tax Return
GREENEVILLE, Tenn -- Steven R. Grose, 51, of Lebanon, Va., waived indictment and pleaded guilty in the U.S. District Court for the Eastern District of Tennessee at Greeneville to willfully making a false federal income tax return. Sentencing has been set for November 5, 2012, at 9:00 a.m.
Grose faces a term of up to three years in prison, fines of up to $250,000, and restitution of over $840,000. He was released pending sentencing.
As set out in his plea agreement, Grose, a certified registered nurse anesthetist reported his business income and expenses via a wholly-owned corporation. As a subchapter S corporation, the resulting net business profit or loss to the S corporation was to flow through and be reported on Grose's corresponding individual income tax returns. He intentionally and falsely overstated the corporation’s business expenses, principally contract labor, to cause the corporation’s net business profit to be materially understated. The falsely and materially understated net business profit/loss was, in turn, reported on Form 1040 for the years 2005 through 2009, which resulted in returns which falsely understated taxable income for Grose and his wife. Grose reported net losses from the S corporation on his 2005 through 2009 tax returns when he had actually had net income from the corporation each year ranging from $60,640.25 to $234,516.01. As a result, Grose actually owed taxes totaling $233,744.00 for the five-year period.
"The Internal Revenue Service's largest enforcement program is directed at the portion of American citizens who intentionally violate their known legal duty to pay their fair share of taxes. Those taxpayers who choose to do the right thing should be assured that the system works and justice will be done. No one is above the law," stated Christopher Henry, Special Agent in Charge, IRS Criminal Investigation-Nashville Field Office.
The charges were the result of an investigation by the Internal Revenue Service-Criminal Investigation Assistant U.S. Attorney Neil Smith represents the United States.