Tax Blog

I often wonder how a person gets to the point where they’re running from the IRS.  I’m sure that most people don’t start off in business saying to themselves: “I’m going to start a business and defraud the government out of tax money”.

But yet, over time, it still happens.  Consider this True Story, from the IRS Website:

“On April 25, 2006, in San Francisco, CA, Lee Nobmann, the CEO and owner of Golden State Lumber (GSL), was sentenced to 15 months in prison, fined $40,000 and ordered to pay $330,000 in restitution.

Nobmann pleaded guilty on Dec. 8, 2005, admitting that he had his company pay for his personal expenses and deduct the funds as the company’s business expenses from 1996 to 2000.

Nobmann also acknowledged that he received rebate checks from vendors and deposited them into his personal bank account and did not report the payments as income for the company or as income on his personal income tax returns.”

I don’t have any inside information about this case.  All I know about it is what you just read. But still, reading stories like this always makes me wonder what happened over the 4-year period from 1996-2000, when this man started having his company pick up his personal expenses and claiming them as business expenses.

Did he not know that he was making a big mistake?  Did the Chief Financial Officer try to warn him about this from the beginning?

When he started depositing checks into his bank account from vendors into his personal account…did he think that he wouldn’t get caught?

5 Years Go By…I Wonder If I’m Going to Get Away With It?

The other interesting thing about this case is that it says he was sentenced to prison in 2005 for something that happened from 1996-2000. Five years go by…seems like a long time.

I wonder what he was thinking from 2000 until 2005? He had 5 years where he knew he had defrauded the government out of tax money … but yet he was still a free man. Did he think he was going to get away with it?

Was he constantly looking over his shoulder, wondering if the IRS was going to “jump out of the bushes?”  Did he ever read a blog like this one – encouraging him to do the right thing … before it’s too late? So if he was being warned, why did he ignore the warnings?

On September 29, 2009, in Texarkana, Texas, Malcolm David MacHauer was sentenced to 33 months imprisonment, to be followed by three years of supervised release, and ordered to pay restitution in the amount of $222,782.   MacHauer was found guilty by a jury on June 17, 2009, of three counts of attempting to evade and defeat paying federal income taxes.  According to information presented in court, although MacHauer received income from Wadley Medical Center in Texarkana, Texas, for his services as a doctor, he failed to pay the appropriate federal income taxes.   Instead, MacHauer placed his income into his corporation, transferring the money to the MacHauer Family Trust, and then withdrawing money from that Trust to pay his personal expenses without paying income tax.

On February 27, 2008, in Madison, Wis., Sabi Atteyih was sentenced to 12 months plus one day in prison, to be followed by a three year term of supervised release for income tax evasion.

On January 2, 2008, Atteyih pleaded guilty to evading his income taxes for 2002.  While owning the Casbah Restaurant in Madison, Atteyih underreported his taxable income from the restaurant from 2002 through 2005 by $349,673 and he evaded income taxes totaling $128,938.