Who gets jail time for tax fraud?

WASHINGTON, D.C. » We often hear the stories about the highprofile athletes and entertainers who get caught for tax evasion, but the odds of your own tax return being audited are pretty low.

About 934,000 returns were audited during fiscal year 2017, the fewest since 2003. The chance of being audited dropped to 0.6 percent, the lowest rate since 2002.

And the less you make, the less likely you’ll be audited. The audit rate for taxpayers with incomes between $50,000 and $75,000 was .48 percent in 2017, compared with 3.52 for folks earning between $1 million and $5 million.

But don’t let the low numbers for regular taxpayers lull you into a false sense of safety. Even with reduced staff levels, the IRS is still teaming up with other law enforcement agencies to aggressively hunt down tax scofflaws.

With two weeks left until the tax-filing deadline, here are some recent cases of people who have gotten jail time for tax fraud:

• Cheryle Murphy of Maryland was sentenced last month to 28 months in prison for her role in a tax-fraud scheme involving more than 130 people, according to law-enforcement officials from the Justice Department, IRS and the U.S. Postal Inspection Service.

From 2005 to 2012, the team of fraudsters claimed refunds in the names of people whose identities had been stolen, including the elderly, drug addicts and prison inmates. The scam involved more than 12,000 federal income-tax returns fraudulently claiming at least $42 million in refunds.

Those involved played various roles, according to law-enforcement officials. The perpetrators either stole people’s identity, allowed their own personal identifying information to be illegally used, created fake returns, let refunds be mailed to them, cashed the refunds or provided bank accounts into which the refund checks were deposited.

Murphy allowed her residence to be used for the delivery of tax refund checks and was paid for each check she received, according to court documents. For her part, Murphy was ordered to pay $127,180 in restitution to the IRS.

• A Minnesota man was sentenced last year to 33 months in prison for tax evasion after he failed to file returns over a 10-year period, according to the IRS. Donald Gibson tried to hide income by diverting money to a so-called warehouse bank, which can hide the ownership of funds by commingling money from different individuals.

Gibson started Sovereign Christian Mission as a way to further evade paying taxes on

his chiropractic income, the IRS said. He used the religious organization to pay for his groceries, entertainment, dinners, and car repairs.

• Patricia Means of Richmond, Virginia, was a licensed investment broker who developed a scheme to defraud investors by saying she was creating a purse-organizer called “Savvy Bag,” according to the IRS. She got people to invest to the tune of $1.1 million, but she spent less than $3,000 to develop, produce or sell the product. The government says that between 2010 and 2014, Means received taxable income of more than $907,000 but failed to report it on her income tax returns. She was sentenced to 60 months in prison and ordered to pay restitution of nearly $1.14 million, including $201,065 to the IRS.

• Steven Headden Young, of St. Petersburg, Florida, was sentenced to 21 months in prison and ordered to pay $509,455 to the IRS. From 2007 through 2011, Young, who filed his own tax returns, got out of paying a huge part of his tax obligation by falsifying deductions, according to court documents. He created bogus business expenditures and deducted them from IRS Schedule C, which is used to report how much money you made or lost in your business.

In the category of “you’ve-got-to-be-kidding,” Young reportedly tried to intercept documents the IRS subpoenaed from his bank. Young fabricated a letter from the IRS to his bank in an effort to get records redirected to an address he established in the name of an IRS employee.

• A Tennessee dentist was sentenced to 12 months in prison for tax evasion. Andrea Henry, who had a dental practice, failed to pay $113,781 in income and self-employment taxes. Rather than pay her taxes, Henry used the money to pay personal expenses, including private-school tuition, expensive housing, and luxury cars, according to court documents. Despite being penalized by the IRS, Henry later reportedly stopped using personal bank accounts and used her business accounts to cover her personal expenses. She has to pay $653,116.78 in restitution to the IRS.

The odds of not being audited may be in your favor, but woe to the tax cheat whose luck runs out.

Readers can write to Michelle Singletary c/o The Washington Post, 1301 K St., N.W., Washington, D.C. 20071. Her email address is michelle. single ta ry@ washpost.com. Follow her on Twitter (@SingletaryM) or Facebook (www.facebook.com/ Michelle Single ta ry ). Comments and questions are welcome, but due to the volume of mail, personal responses may not be possible. Please also note comments or questions may be used in a future column, with the writer’s name, unless a specific request to do otherwise is indicated.