Charles A. Davis has been sentenced to ten years in prison for tax fraud. According to the Justice Department, Mr. Davis has also been ordered to serve a year of supervised release after he is released from prison and to pay restitution to the Internal Revenue Service (IRS) totaling $538,569.
Former Pilot Defrauded IRS by Denying Income and Falsely Reporting Withholding
Mr. Davis was convicted by a federal jury in March 2012. The evidence at trial showed that, while employed as a commercial airline pilot for US Airways, Mr. Davis failed to file timely federal income tax returns from 1996 through 2007, even though his wages ranged from $129,950 to $190,510. Between 1997 and 2005, US Airways withheld little to no taxes from his income because Mr. Davis had falsely represented to his employer that he was exempt from withholding.
According to the trial evidence, Mr. Davis filed amended tax returns for years 1996 to 2000, falsely claiming that he made little to no income in those years. He later filed fraudulent returns for years 2004 to 2008, in which he falsely reported his federal income tax withheld and requested fraudulent tax refunds from the IRS in amounts up to about $1.5 million.
Mr. Davis also obstructed efforts by the IRS to collect his tax debt. He submitted false payment documentation, concealed his assets, filed for bankruptcy and diverted funds to his 401(k) account, all to avoid paying his taxes.
Whistleblowers Play Important Role in Identifying and Prosecuting Tax Fraud
Whistleblowers play a vital role in identifying and prosecuting tax fraud. In recognition of that fact, the Tax Relief and Health Care Act of 2006 provides that whistleblowers are eligible under certain circumstances for a financial award from the IRS Whistleblower Office, varying from 15 and 30 percent of the total recovered by the IRS as a result of the whistleblower’s information.
If you know someone is committing tax fraud, you can help stop it. Learn about your rights as a whistleblower under the Tax Relief and Health Care Act by talking to a whistleblower attorney at Waters & Kraus. Contact us or call our attorneys at 800.226.9880 to learn more about our practice and how we can assist.