Owner of Software Company Pleads Guilty to Tax Evasion

          GRAND RAPIDS, MICHIGAN — U.S. Attorney Andrew Birge announced today that Douglas Arvin Horning, 55, of Cadillac, pled guilty to tax evasion before the Honorable Ray Kent, United States Magistrate Judge.  Horning faces up to five years in prison when he is sentenced by the Honorable Paul L. Maloney, United States District Judge, later this year.

          According to the plea agreement, Horning has not filed an individual tax return since 2008 or a corporate tax return since 2006 for his software company Perfect Professionals, Inc., doing business as Compass Technologies.  He has not paid any individual or corporate taxes since that time.  Horning also failed to pay all of the required “trust fund” taxes withheld from his employees’ paychecks.  Horning concealed income by routing it through a second company—even after that company was dissolved by the State of Michigan—failing to disclose the company’s bank account to the IRS, and not including that income on the Forms W-2 he issued to himself through Perfect Professionals.  He likewise received unreported income by paying personal expenses using Perfect Professionals.  The parties stipulated that for criminal tax purposes, Horning owes the IRS $977,983, covering corporate and individual taxes for tax years 2012 through 2016, and trust fund taxes for 2006 through 2019.

          “Our Nation’s tax laws are not optional,” said U.S. Attorney Birge. “We all have an obligation to pay our fair share.  The refusal to do so not only imposes an added burden on other taxpayers, but when the conduct rises to the level of willful evasion, it is a felony.”

          “Evading your federal individual income tax responsibilities is a violation of law,” said Miguel Rivera, Acting Special Agent in Charge, IRS Criminal Investigation, Detroit Field Office.  “Mr. Horning’s plea serves as a reminder IRS-CI is committed to bringing justice to individuals who have a duty to file and pay tax yet willfully evade their federal tax responsibilities.  Evasion by failing to withhold and pay over the proper amount of employment taxes for employees is also a violation of law and can financially injure those employees from receiving benefits due to them, such as Social Security or Medicare.”

          This case was investigated by IRS Criminal Investigation and is being prosecuted by Assistant U.S. Attorney Justin M. Presant.

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