Robert J. Fedor, Esq., L.L.C.

Ohio man convicted of filing false tax returns

We've preivously in this blog discussed the importance of filing tax returns in a timely manner. Of equal importance, however, is that those tax returns filed be accurate. An Ohio man was recently arrested and convicted on two counts of filing false tax returns for the tax years 2006 and 2007.

According to court documents, federal officials charge that the 50-year-old man, who owns and operates a construction business, failed to report substantial amounts of income for both the 2006 and 2007 tax years. According to projections by officials at the Internal Revenue Service, the 50-year-old business owner failed to report and pay taxes on nearly $300,000 of income. 

Additionally, officials contend the business owner used monies from private investors to pay for personal matters. The man was recently charged with tax crimes and faces up to six years in prison and half-a-million dollars in fines. 

When reading about this case, it appears on face value that the man willingly and knowingly engaged in criminal and deceptive acts. In reality, however, it's possible that he simply failed to keep accurate and up-to-date financial records. Moreover, assertions that the man had ill-intentions when he used business-related funds for personal use may not be accurate. 

In fact, many small business owners are guilty of dipping into business funds to pay for personal matters. In many cases, these individuals have invested heavily in their own businesses and therefore see no issue with borrowing from such funds with the intent of repaying them at a later date. 

This case is an example of why it's wise for small business owners to hire a financial and tax professionals. Such individuals have a fiduciary duty to act in a client's best interests and can help small business owners ensure they are following both state and local tax laws. 

Source: WBNS-TV, "Canal Winchester Man Convicted On Tax Charges," July 12, 2013