It’s important for small business owners to stay in the good graces with the Internal Revenue Service (IRS). A North Carolina couple, who operated an online business, neglected to report their gross earnings and fell out of the good graces of the IRS.
An article in the Triad Business Journal states that the couple owned and operated an online business that sold merchandise including scrapbooking and art materials, books, inspirational DVDs, pet supplies and tools through eBay and Amazon. The operation did pretty well and over seven years, the company earned over $1 million in gross receipts.
They ran into a problem with the IRS because they neglected to report their earnings on their tax returns. (One of those minor details you don’t want to forget.)Then it gets worse. They also forgot to report their company’s income on a bank application for a mortgage loan modification. (How do you forget that you earned $1 million?) Apparently, these missteps caught the attention of the IRS and the rest is history.
The 51-year-old man and his 53-year-old wife both pleaded guilty to making a false statement on a loan application. Each face up to 30 years behind bars for making a false statement on a loan application. The man faces an additional three years in prison for filing a false tax return.
Just because a business does not have a physical storefront it doesn’t mean it doesn’t exist. Perhaps this couple figured they could hide behind their online business without being detected.
Source: Today’s ”Fraud of the Day” is based on an article entitled, ”Local couple plead guilty to tax fraud, bank fraud,” published by the Triad Business Journal on August 3, 2016.
A Greensboro couple pleaded guilty Tuesday to tax fraud and bank fraud charges related to an online business they operated.
Daniel Balson, 51, pleaded guilty to one count of filing a false tax return for 2010 and one count of making a false statement on a loan application. Renee Balson, 53, pleaded guilty to one count of making a false statement on a loan application.