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The high cost of doing a favor

December 01, 2008

Anthony Marek probably felt he was doing a favor to Steven Mazzola when he created backdated invoices to document claimed expenses during an IRS audit of Mr. Mazzola's towing company. Things went well at first, and the IRS agent accepted the invoices and closed the audit.

Then Mr. Mazzola's brother called the IRS:

The criminal investigation that ultimately resulted in Marek's conviction began in April 1998, shortly after the audit closed, when Joseph Mazzola contacted IRS agents and alleged that the invoices submitted during the audit were false, and part of an effort to conceal a scheme to, inter alia, skim money from the company and pay employees "under the table" to help the employees evade income taxes and to enable the company to evade payroll and other employment taxes.

Things went badly, and Mr. Marek ended up convicted of "corruptly endeavoring to obstruct or impede the due administration of the Internal Revenue Code," earning six months of home detention, probation, and a $3,000 fine. Last week his conviction was upheld.

The Moral? Cheating on taxes is unwise; helping someone cheat is just dumb. Think about it: if it works, your cheating friend gets money, and you get nothing. If it fails, you get trouble. No upside for you, but plenty of downside.

Cite: Marek, CA-1, No. 07-2437.

Tags: tax crime.