On March 13, 2018, it was announced that 53-year-old Michael Powers of New Cumberland, Pennsylvania had been sentenced to one year probation and four months on monitored home detention for filing a false Federal Income Tax Return for the 2010 tax year. The defendant owns and operates Power Auto Repair in New Cumberland. He pleaded guilty to understating his true income by $238,381 on his 2010 income tax return on September 11, 2017.
The tax owed on the unreported income totaled to $42,774. Powers will make restitution to the Internal Revenue Service in that amount in addition to another $26,198 for unpaid taxed owned on an unreported income of $208,979 for the 2012 tax year. Due to Powers’ underreporting of income, the IRS took a total loss of $68,972. Powers has been ordered to pay restitution in the amount of $68,972 to be paid in no less than monthly payments of $500.
The IRS initiated an investigation of Powers when it received a Form 1099-K suggesting that Powers Auto Pair had more gross receipts that what was reports on Powers’ 2011 income tax return. The investigation confirmed that Powers had opened two bank accounts. One was for business and the other was for personal purposes. Powers deposited all of the cash and checks he received from his customers into the business account. All of the credit card income was deposited into his personal account.
However, the defendant only reported the income in his business account on his 2010 and 2012 tax returns. Additional details have been made available here.