Congressional staffers who don’t file, and a Pittsburgh ice rink that didn’t pay its employment taxes in our weekly roundup of tax fraud cases.
Pittsburgh: Tax attorney Steven Lynch, 61, has been sentenced to four years in prison after being convicted of failing to collect, account for and pay over employment taxes.
According to court documents and trial evidence, between 2004 and 2015 Lynch co-owned and operated the local Iceoplex recreational sports facility, which included a fitness center, ice rink, soccer court, restaurant and bar. Lynch controlled the finances for these businesses and was responsible for collecting and paying tax withheld from employee wages and filing quarterly employment tax returns.
A jury found that between 2012 through 2015, he failed to timely pay to the IRS more than $790,000 in taxes withheld from the wages of the employees for these businesses.
Lynch was also ordered to serve three years of supervised release and to pay $793,145 restitution to the IRS and a $75,000 fine.
Arlington, Va.: Congressional staffer Issac Lanier Avant has been sentenced to approximately four months in prison for willfully failing to file an individual income tax return.
According to court documents, Avant has been employed by the U.S. House of Representatives as a chief of staff since 2002 and in December 2006 also became Democratic Staff Director for the House Committee on Homeland Security.
Despite earning more than $165,000, Avant failed to timely file his income tax returns from 2009 through 2013, causing a tax loss of $153,522. Avant also had no federal income withheld during those years because in May 2005 he filed through his employer falsely claiming that he was exempt from federal income taxes. Avant had no federal tax withheld from his paycheck until the IRS mandated that his employer begin withholding in January 2013. Avant also did not file tax returns until after he was interviewed by federal agents.
The court imposed a prison term consisting of 30 days’ incarceration followed by incarceration every weekend for a year. Avant was also ordered to serve a one-year term of supervised release and to pay $149,962 restitution to the IRS.
Jeff Stimpson is a veteran freelance journalist who previously served as editor of The Practical Accountant.