HARRISBURG, Pa. (WHTM) – The owner of a New Cumberland auto repair business has pleaded guilty in federal court to charges he filed a false federal income tax return.
Michael Powers, 53, owner of Powers Auto Repair, pleaded guilty to understating his true income by $238,381 on his 2010 income tax return, U.S. Attorney Bruce Brandler’s office said.
The tax owed on the unreported income amounted to $42,774. Under terms of the plea agreement, Powers will make restitution to the IRS in that amount plus another $26,198 for unpaid taxes owed on unreported income of $208,979 in the 2012 tax year.
Brandler’s office said the IRS began investigating Powers began it received a Form 1099-K indicating Powers Auto Repair had significantly more gross receipts than what Powers reported on his 2011 income tax return.
A Form 1099-K is filed by entities that process credit card payments on behalf of businesses.
Bank records showed Powers deposited all cash and checks he received from customers into a business bank account and all of his credit card income into a personal account at the same bank. Prosecutors said he only reported the income in his business account as income on his 2010 and 2012 tax returns.