On March 19, 2014, Larry Lester Larson, a resident of Tucson, Arizona, was indicted on three counts of tax evasion. Larson is president, owner and sole shareholder of State Industrial Supply Corporation, which is distributes fasteners and other machined parts.
During the tax years 2007 through 2009, Larson paid numerous personal expenses out of his corporation’s bank account. These personal expenses were deducted as business expenses on the corporation’s federal income tax returns that Larson filed on behalf of the corporation relating to the tax years 2007 through 2009.
According to the indictment, Larson deducted payments to his housekeeper for his personal residence; payment for repair of classic cars; payments for 15 remodeling and other maintenance related expenses for personal residence and a family member’s home; payments for plastic surgery, i.e., a face lift; payments of hotel rooms for a wedding; medical and dental expenses; and golf club dues.
Because Larson falsely deducted numerous personal expenses on his corporate tax returns during the above years, the total business expenses on such returns were overstated. The net income from his corporation was thereby understated. This resulted in a reduced taxable income on Larson’s personal returns thereby fraudulently decreasing his tax due and owed to the Internal Revenue Service.