One of the great aspects of American government is the level of generosity and inclusion that the government garners toward nonprofit groups around the country. In fact, the feds will spend big bucks helping small up-and-coming organizations. But with every good and honest attempt to better society, there are folks that aim to take advantage of the system. Michael Stickler is one of those folks.
A federal judge sentenced Stickler to two and a half years in a federal prison on Monday for several charges including tax evasion and stealing public money. According to a Department of Justice press release, Stickler ran a company out of Reno, Nevada called Faith Based Solutions. Apparently the stated purpose of Stickler’s company was to provide consulting services to charities and nonprofits. Though, the government would argue that the real mission of his company was to fund lavish vacations and taxpayer-funded luxuries.
In 2007, Faith Based Solutions received a $500,000 grant to help educate smaller organizations on how to apply for nonprofit status as well as other government benefits. But an audit of Stickler’s activities uncovered that the sub-grantees never saw any of that money. Instead, Stickler took the liberty of paying himself and various family members excessive salaries. He further took expensive vacations and spent they money on items that were otherwise not approved under the terms of the grant.
In addition to the theft of public funds, Stickler failed to remit employment tax for his employees. As a general rule, when an employer pays wages to an employee, they are required to withhold income tax on behalf of the employee and are also obligated to pay employment and Federal Insurance Contribution Act (FICA) taxes and remit both to the government.
Stickler pled guilty to the tax evasion charge relating to the employment taxes and was found guilty by a federal jury on the charge relating to the theft of public funds. Though, Stickler got off with a pretty lenient sentence, considering he could have been sentenced to up to 10 years in a federal penitentiary. The judge cited his long history of charitable activity as a basis for the reduced sentence. Though, he will have to pay over $300,000 in restitution to the federal government, in addition to his prison stay.
As evidenced by this case, investigations by the government can lead to some very bad consequences that can very easily include a sentence in a federal prison. If you are facing an IRS audit or are fearful that you will be, it is in your best interest to contact an experienced tax attorney to advise you. Many taxpayers believe that they will be able to talk their way out of an audit or an investigation. But this couldn’t be further from the truth. The IRS trains their examiners to ask all of the questions that may elicit a potentially incriminating response. And when they smell blood, they will stop at nothing.
The experienced tax and accounting professionals at the Tax Law Offices of David W. Klasing have years of experience helping taxpayers achieve the most desirable results when dealing with the IRS, Franchise Tax Board, and the Department of Justice. Don’t step into the ring with the government without us in your corner. Contact the Tax Law Offices of David W. Klasing today for a reduced-rate consultation.