Just forgot; no trust at all; Exterior design; and other highlights of recent tax cases.
Vidalia, Georgia: Business owner Jonathan Mann, who pleaded guilty in April to filing a false tax-related document for the 2018 tax year, has been sentenced to a year in prison to be followed by a year of supervised release.
Mann failed to inform his tax preparer of $266,048 in income from his construction business between 2017 and 2019. Instead, Mann deposited these checks in his bank account or cashed them at the bank upon which the check was drawn.
Mann’s conduct resulted in him paying $84,638 less in federal income tax over those three years.
He was also ordered to pay $84,638 in restitution, the tax he owed on the unreported income.
Ocala, Florida: A federal jury has found Clarence Christofer Ward, a.k.a. Khaled Yaqud Mansur-El, of Tennessee, guilty of a count of wire fraud, 10 counts of money laundering, and one count of making a false claim to the IRS.
In November 2020, Ward e-filed a return on behalf of a trust in his name, falsely claiming that the trust had paid more than $7 million in taxes in 2019. Ward then asked for a $4.1 million refund from the IRS.
IRS records showed the trust had never paid any federal taxes. Before the agency realized that Ward’s claim was untrue, it issued the $4.1 million refund. Ward immediately spent the funds on four residential properties, a luxury automobile, vacations and investment brokerage accounts. The jury determined that the residential properties purchased by Ward could be forfeited to the U.S.
He faces up to 125 years in prison.
Butler, Pennsylvania: Resident Michael D. Funovits has pleaded guilty to willful failure to collect or pay over tax.
The court was advised that, between 2016 and 2023, Funovits failed to pay over federal payroll taxes he collected on behalf of his businesses, PennRo Associates LLC and Penn Exteriors LLC.
Sentencing is Feb. 17. Funovits faces up to five years in prison, a fine of up to $250,000, or both.
Egg Harbor Township, New Jersey: Denise Davis, of Mays Landing, New Jersey, has admitted to filing employment returns that concealed a company’s cash payroll.
Davis worked at Davis Brothers Chimney Sweep & Masonry, a business owned by Davis’ spouse. Davis admitted that between Jan. 1, 2018, and April 30, 2024, she conspired with Henry Collins, the business’ bookkeeper, to defraud the IRS.
Collins used a commercial check casher to negotiate a substantial amount of Davis Brothers’ gross receipts checks. He used some of the resulting cash to pay himself and other employees in cash. Collins provided the rest of the cash to Davis and her spouse.
Davis and Collins then provided false and misleading information to the business’ outside accounting firm that resulted in the preparation and filing of false payroll returns that omitted the employees paid in cash and their cash wages.
Davis also admitted that she failed to file individual income tax returns for herself and her spouse during the same period.
She admitted that the conspiracy resulted in a tax loss of approximately $1.18 million.
The count of conspiracy carries a maximum penalty of five years in prison and a fine of up to $250,000. Sentencing is Feb. 4.
Collins previously pleaded guilty and is scheduled to be sentenced in December.
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