Scott Edward Carroll, Tax Evasion, Michigan 2015

GRAND RAPIDS, MICHIGAN - Scott Edward Carroll, 49, of Traverse City, Michigan, is facing up to one year in prison and a fine of up to $100,000 after pleading guilty to willfully failing to timely file an income tax return for the 2008 tax year.

Carroll will be sentenced on May 19, 2015, at which time he will face the possibility of imprisonment and a fine. As part of his plea agreement, Carroll has agreed to pay restitution of $103,466.65, plus fraud penalties totaling an additional $44,241.00.

“In 2006 and 2007, Carroll underreported the gross sales from his business by over $180,000.00 on his federal tax returns, and then willfully failed to file tax returns in 2008, 2009 and 2010. This office will continue to vigorously prosecute those who willfully choose to cheat the tax system to avoid paying the same fair share of the tax burden dutifully paid by the taxpayers of this district,” said U.S. Attorney Patrick Miles.

From 2006 through 2010, Carroll operated a training and consulting business in Traverse City, Michigan. In 2006 and 2007, he substantially underreported his gross sales from that business on Schedule C of his federal tax returns, resulting in an underreporting of his tax liability in each year. Despite the fact that the Internal Revenue Service began an audit of his tax returns, Carroll willfully failed to timely file any personal tax returns for tax years 2008, 2009, and 2010, by the required deadlines.

Instead, he did not file his income tax returns and pay his taxes for those years until 2012, long after the Internal Revenue Service informed him that it had commenced a criminal investigation of his conduct. As part of his guilty plea to the misdemeanor information for willfully failing to timely file his tax return for 2008, Carroll has also agreed to pay his corrected tax liabilities ($65,666.00), along with fraud penalties ($44,241.00) and interest ($37,800.65), associated with tax years 2006 and 2007.

“IRS Criminal Investigation directs its efforts at the portion of taxpayers that willfully violate their known legal duty to timely file accurate income tax returns,” said Jarod J. Koopman, Special Agent in Charge, Internal Revenue Service Criminal Investigation. “Identifying and investigating these types of crimes is vital to maintaining public confidence in our tax system.”

The Internal Revenue Service-Criminal Investigation conducted the investigation, and Assistant United States Attorney Ronald M. Stella is the prosecutor.

Source: https://www.justice.gov/usao-wdmi/pr/2015_0128_SCarroll.html