Michael Powers, owner of Powers Auto Repair in New Cumberland, PA, pled guilty in federal court to charges of filing a false income tax return.
The IRS was tipped off to the false return when they received a 1099-K, which is filed by entities that process credit card payments on behalf of a business.
Powers would deposit the cash and checks received into his business account, but would have all of his credit card income directed to his personal account.
On his 2010 income tax return, Powers underreported his income by $238,381, which resulted in a loss to the IRS of $42,774. In his plea agreement with the court, Powers will pay that amount as restitution along with an additional $26,198 for underreporting his income on his 2012 return.
