Former CPA, Mark A. Harmon Sentenced to 24 months for Cheating on His Income Taxes
Evansville accountant altered client invoices and falsified income on personal tax returns for years
Evansville (STL.News) Acting United States Attorney John E. Childress announced today that Mark A. Harmon, 64, of Evansville, Indiana, was sentenced to 24 months in federal prison by U.S. District Judge Richard L. Young on multiple counts of tax evasion.
“Do as I say, not as I do, was Mr. Harmon’s business practice,” said Childress. “Stealing from law abiding Americans and deceiving trusted clients will not be tolerated. Those thinking about engaging in this type of behavior during this tax season should think twice.”
Mark Harmon owned and operated Mark Harmon and Company, Certified Public Accountant and Consultants, in Evansville . He was an accountant for over 25 years and a CPA until his license expired in June 2015.
Harmon’s largest accounting client from 2012 through 2015 was a group of three related companies: Pittsburgh Tank and Tower Co., Pittsburgh Tank and Tower Maintenance, and Allstate Tower, Inc. (collectively, Pittsburgh Tank and Tower Group (“PTTG”)). Harmon had been working with those companies for over 25 years by performing accounting and financial audit services.
During the IRS examination, Harmon said he made approximately $75,000 per year in accounting fees from PTTG, and it was his practice to send PTTG an invoice for services rendered, which they always promptly paid. He further stated that PTTG did not issue him a Form 1099 for the tax years at issue because PTTG treated payments to Harmon as expense deductions for professional services. Further examination of Harmon’s accounting books showed approximately $435,000 in purported loans to Harmon from PTTG. Harmon said that PTTG would confirm the loans, and he produced invoices, some of which reflected a “Loan request.”
Agents also requested documents from PTTG. The CFO informed the agents that in the process of gathering the hard-copy invoices from their files, he observed that several invoices stated, “Loan request” and appeared to be altered. Company officials said that PTTG never loaned Harmon any money. Harmon had access to the company’s files during his year-end financial and tax returns preparation services, and they suspected that Harmon physically removed the original invoices from their files and altered the invoice description to state “Loan request.” The company located the original invoices in another format which did not include this description.
After the discrepancy in the invoices was discovered, Harmon admitted that he replaced the invoices in PTTG’s files with the ones matching the “Loan request” invoices. All the $435,000 falsely classified as loans from PTTG to Harmon was professional services income.
The examinations of Harmon’s 2012 through 2015 individual tax returns showed the following:
Calendar year 2012
Reported income of $11,342.00
Actual income approximately $99,138.00
Failed to pay approximately $31,293.00 in taxes
Calendar year 2013
Reported income of $8,622.00
Actual income approximately $167,533.00
Failed to pay approximately $54,211.00 in taxes
Calendar year 2014
Reported income of $25,918.00
Actual income approximately $183,826.00
Failed to pay approximately $59,519.00 in taxes
Calendar year 2015
Reported income of $9,349.00
Actual income approximately $199,512.00
Failed to pay approximately $63,137.00 in taxes
This investigation was conducted by the Internal Revenue Service Criminal Investigation.
“As a former CPA and accountant, Mr. Harmon has full knowledge of our tax laws. Mr. Harmon chose to blatantly ignore the tax laws by filing false returns to benefit himself” said Acting Special Agent in Charge Tamera Cantu of IRS Criminal Investigation’s Chicago Field Office. “We should not forget that the ultimate victims in tax fraud cases are the people of the United States – those honest taxpayers who diligently file tax returns each year. This sentencing sends a message that the IRS is working to make sure that all taxpayers file and pay their fair share of taxes.”
According to Assistant United States Attorney Kyle Sawa, who prosecuted this case for the government, Harmon must also pay $208,160 in restitution and will serve one year of supervised release following his imprisonment.