Cumberland County auto-shop owner pleads guilty to tax evasionFeds: Michael Powers must pay back nearly $70,000
The owner of a Cumberland County auto shop has admitted to filing a false tax return for 2010, and must pay back $68,972 to the federal government.
Michael Powers, 53, operates Powers Auto Repair in New Cumberland.
Federal prosecutors said Powers understated his true income by $238,381 on his 2010 income tax return, meaning that he failed to pay the IRS $42,774 in taxes on that amount.
He pleaded guilty Monday before U.S. District Court Judge Christopher C. Conner, the U.S. Attorney's Office said. Efforts to reach Powers at his business were not immediately successful on Tuesday.
According to federal prosecutors, an IRS investigation of Powers began after the IRS received a Form 1099-K indicating his business had significantly more gross receipts than what Powers himself reported.
Form 1099-K is a document filed by entities that process credit card payments on behalf of businesses.
The IRS obtained Powers' bank records, which showed that he had both a business and a personal account at the same bank. Prosecutors said Powers deposited cash and checks from business customers into the business account, but deposited the credit card income into his personal account.
Powers will make restitution to the IRS for 2010, as well as $26,198 for taxes he failed to pay on nearly $209,000 in income he failed to report for 2010, prosecutors said.