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Touch play, touch tax

March 23, 2010

An Afton, Iowa man who leased "Touch play" machines during the Iowa lottery touch-play frenzy has pleaded guilty to tax evasion. Scott Mitchell, the owner of Central Iowa Amusements, has pleaded guilty to evading $93,000 in taxes. KGAN.com reports:

Mitchell was the owner of Central Iowa Amusements, which leased acrcade-style games to businesses across the state in exchange for a percentage of the profits.

In his plea agreement, Mitchell admitted withholding financial data from his tax preparer, allowing him to evade taxes of more than $93,000 over the three-year period.

The crime? From the plea agreement:

a. The Defendant intentionally withheld bank records or financial records from his tax preparer, and provided misleading and incomplete information to be used in preparing his tax returns.

b. The Defendant knowingly and willfully submitted fraudulent federal income tax returns for tax years 2004, 2005 and 2006, and

c. in the tax returns referenced above, the Defendant intentionally failed to disclose income that would have required him to pay7 substantial additional taxes in the estimated amount of over $95,000 combined, including an estimated substantial tax of no less than $50,000 for 2004.

Federal tax sentencing guidelines start at a 21-27 month sentence for a $95,000 tax loss, though the sentencing judge can go up or down from that.

The Des Moines Register reported that Central Iowa Amusement's revenue from Touch Play machines was $464,676.

The Moral? Always tell the truth to your tax preparer. Also, having your revenue in the paper is probably as good as a 1099 form.

Link: US Attorney press release.

Tags: tax crime.Touch play.

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