The Trifecta on How Not to Run The Business for Federal Tax Purposes

According to DoJ, federal district court accepted a Texas man’s guilty plea to evading taxes on income he earned from his business, on April 5, 2024.

According to court documents, John L. Petrone owned and operated a business that sold an herbal extract known as “kratom,” along with other related products. 

1. Petrone did not file individual income tax returns for 2014 through 2019, 
2. Nor did he pay income taxes for those years, despite earning hundreds of thousands of dollars from his business. 
3. During that time, Petrone attempted to evade his income taxes by 
• opting not to withhold federal taxes from his paychecks, 
• operating the business under different names, 
• dealing in cash, 
• using business bank accounts to pay for personal expenses and 
• lying to the IRS during an audit. 
• In addition, Petrone did not pay his business’s employment taxes. 

Through his actions, Petrone caused a tax loss to the IRS of over $529,000. 

Petrone is scheduled to be sentenced on June 14. He faces a maximum penalty of five (5) years in prison. 

A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

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Read more at: Tax Times blog