Gabriel Ferrari, a New Jersey man who owns and operates Buses and Trucks, Inc., an automotive repair business, was sentenced today to one year and one day in prison for filing a false corporate income tax return with the IRS.

According to court documents and statements made in court, Ferrari had used business funds to pay for personal expenses, including gambling on horse races, in 2011. He did not disclose this to his return preparer, resulting in the preparation and filing of a fraudulent corporate tax return. Furthermore, Ferrari failed to pay employment taxes in the amount of $291,600 based on an unreported cash payroll.

U.S. District Judge Stanley R. Chesler also ordered Ferrari to serve one year of supervised release following his imprisonment and to pay approximately $87,926 in restitution to the United States. The announcement was made by Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and U.S. Attorney Philip R. Sellinger for the District of New Jersey.

The case underlines the importance of accurate tax reporting for small businesses. Tax evasion and fraudulent activities undermine the integrity of the tax system and can lead to severe consequences, including prison terms, financial penalties, and reputational damage.

This case also demonstrates the importance of segregating business and personal expenses, a common challenge for small business owners. Using business funds for personal expenses, particularly without proper disclosure, can lead to legal troubles, as seen in Ferrari’s case.

The role of IRS-Criminal Investigation, in this case, underscores the serious attention given to tax-related offenses by federal authorities. Small businesses are encouraged to maintain accurate financial records, seek advice from tax professionals if needed, and comply with all tax obligations to avoid similar repercussions.

Trial Attorney Ann M. Cherry of the Justice Department’s Tax Division and Assistant U.S. Attorney Andrew M. Trombley of the District of New Jersey prosecuted the case.

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Source: Small Business Trends


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