New Cumberland Businessman Pleads Guilty To Filing False Tax Return
HARRISBURG – The United States Attorney’s Office for the Middle District of Pennsylvania announced that Michael Powers, age 53, of New Cumberland, Pennsylvania, pleaded guilty today before Chief United States District Court Judge Christopher C. Conner to charges that he filed a false Federal Income Tax Return pertaining to tax year 2010.
According to United States Attorney Bruce D. Brandler, Powers who owns and operates Powers Auto Repair in New Cumberland, pleaded guilty to understating his true income by $238,381 on his 2010 income tax return. The tax owed on that unreported income amounted to $42,774. Under the terms of his plea agreement, Powers will make restitution to the Internal Revenue Service (IRS) in that amount plus another $26,198 for unpaid taxes owed on unreported income of $208,979 for tax year 2012. Thus, the total loss to the IRS as a result of Powers’ underreporting of income was $68,972.
The IRS investigation of Powers began after the IRS received a Form 1099-K indicating Powers Auto Repair had significantly more gross receipts than what Powers reported on his 2011 income tax return. A Form 1099-K is a reporting document filed by entities that process credit card payments on behalf of businesses.
As a result, the IRS obtained Powers’ bank records, which showed that Powers established two accounts - a business account and a personal account at the same bank. Powers deposited all of the cash and all of the checks he received from his customers into the business bank account, and all of his credit card income into his personal account. However, Powers only reported the income in his business account as income on his 2010 and 2012 tax returns.
The case was investigated by the Harrisburg Office of the Internal Revenue Service, Criminal Investigations. Assistant United States Attorney Kim Douglas Daniel is prosecuting the case.
A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
The maximum penalty under federal law for this offense is three years of imprisonment, a term of supervised release following imprisonment, and a $250,000 fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
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