North Carolina Businessman Fails to Report More Than $1 Million in Income

By December 22, 2015Tax Crimes, Tax Evasion

On Oct. 27, 2014, in Raleigh, North Carolina, Jeffrey Wayne Scott was sentenced to 12 months and one day in prison for tax evasion. Scott previously pleaded guilty to one count of willfully attempting to evade his personal income tax for tax year 2007. According to court documents, Scott owned and operated Greenville Loop Seafood (GLS).  For tax years 2006 through 2010, Scott and his wife filed joint individual income tax returns. Scott reported that his taxable income for these five years ranged between $23,934 and $92,999, and paid only $91,800 in federal income taxes for this time period. However, during these five years, the Scotts spent far in excess of this reported taxable income on personal expenditures. Between 2006 and 2010, the Scotts paid for nearly all of their living expenses with checks from GLS. Scott also made a monthly transfer of $10,000 from the GLS business account into a personal brokerage account.  After the purchase of their home in June 2009, Scott stopped transferring funds to the brokerage account, but instead used funds from the GLS business account to pay the mortgage and related expenses. Scott failed to report in excess of $1,270,000 in taxable income for these five years and owed at least $412,844 in additional federal income taxes. Furthermore, despite being aware that he was under criminal investigation, in November 2012, Scott filed a false 2011 corporate income tax return claiming work on his personal residence, including painting and repair work by a plumber, and health bills related to his family dog as business expenses.