Evergreen Business Owner Pleads Guilty to Filing False Income Tax Return

DENVER – John Michael Askins, age 61, of Evergreen, Colorado, pled guilty yesterday before U.S. District Court Judge Christine M. Arguello to filing a false income tax return, United States Attorney John Walsh, IRS Criminal Investigation Acting Special Agent in Charge Steven Osborne announced.  Judge Arguello is scheduled to sentence Askins on January 21, 2016.  Askins was indicted by a federal grand jury in Denver on July 7, 2015.

According to the indictment and plea agreement, Askins owns three Service Master carpet cleaning franchises in the Denver area. In October 2011, the Internal Revenue Service, Criminal Investigation (IRS-CI) received a referral from the Small Business/Self Employed Section of the IRS regarding Askins. The referral arose as a result of an audit of the defendant’s 2007 through 2009 personal tax returns.

The returns in question were prepared by a CPA based upon profit and loss statements for Service Master businesses, mortgage interest statements, and information about rental property owned by Askins. Askins reviewed the prepared returns and on more than one occasion told the CPA that the return at issue was not correct because he did not make that much net income and the CPA made the changes requested. Askins failed to file an income return for 2010 even after the CPA attempted to contact Askins several times.

An IRS-CI Special Agent employed a bank deposit analysis of the Service Master business bank accounts and determined that Askins underreported his income by $33,762 for 2007,  $127,472 for 2008, and $153,577 for 2009 which resulted in a tax loss of $9,453, $35,692, and $43,001, respectively. As for the failure to file for the year 2010, Askins gross receipts for this year amounted to $213,041.  However, Askins did not provide any books or records regarding 2010 business transactions, deductions, or expenses; therefore, using the applicable tax rate of 20%, the government asserts that the tax loss for the failure to file for 2010 was $42,608. The total tax loss for all four counts charged in the Indictment is $130,755.

Askins pled to one count of filing a false income tax return, which carries a penalty of not more than 3 years in federal prison, and a fine of up to $250,000.

This case was investigated by Internal Revenue Service – Criminal Investigation and is being prosecuted by Assistant U.S. Attorney Martha A. Paluch.