PAOLA — A Paola man has agreed to pay the Internal Revenue Service more than $680,000 in back taxes that he reportedly avoided by filing false income tax return information for his tree care business.
According to the plea agreement filed in U.S. District Court, Steven J. Strauss, owner and operator of Classic Tree Care since 2005, admitted to inaccurately reporting his business activities to his Gladstone, Mo., tax preparer from 2012 to 2015, which were the tax years investigated by the IRS.
According to the court document, “Strauss did not maintain a set of formal books or records for his business. Typically, he would provide handwritten notes to his tax preparer with figures that he represented to be the gross receipts and expenses for Classic Tree Care. Strauss knew that the tax preparer relied upon the figures he supplied to prepare his returns, and Strauss authorized the signing and filing of the returns that were based on those figures. The investigation revealed that Strauss did not provide accurate information to the tax preparer; he vastly understated the gross receipts for his tree business. The understatement of gross receipts caused corresponding understatements of taxable income and tax liability.”
The reported tax losses were $98,094 in 2012, $102,680 in 2013, $199,286 in 2014 and $284,732 in 2015.
The total tax loss is $684,792, which Strauss has agreed to pay back as part of the plea deal.
According to the court document, the IRS used the bank deposits method of proof in investigating the case.
“Most of Classic Tree Care’s customers paid by check. Deposits to Strauss’ bank account were analyzed. Deposited checks that were ostensibly payments for tree care services were considered to be income to Strauss. Cash deposits and other deposits that could not be shown as related to tree care services were disregarded in calculating the gross receipts for the tree care business. The IRS made an effort to fairly and reasonably identify and deduct non-income items. The results of the bank deposits analysis showed that during the years 2012 through 2015, Strauss deposited approximately $1,467,682 in business income over and above what was reported on his tax returns.”
The plea agreement states that the maximum penalty the court may impose is no more than three years in prison, a $100,000 fine and one year of supervised release, as well as a $100 mandatory special assessment that must be paid in full at the time of sentencing.
Assistant U.S. Attorney Thomas M. Larson said a sentencing date has not yet been scheduled.
When asked to comment on the issue, Strauss admitted to having an issue with the IRS, but he declined to comment further.