Silverthorne man sentenced to prison for tax evasion | SummitDaily.com

Silverthorne man sentenced to prison for tax evasion

A Silverthorne man was sentenced on Friday for tax evasion, with an IRS investigation determining he owed more than $335,000 in taxes through his real estate business.
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A Silverthorne man who pleaded guilty to tax evasion was sentenced to three months in prison and $335,211 in restitution to the Internal Revenue Service on Friday Afternoon.

Byron Thomas Warnes, 60, pleaded guilty in February of 2014 to one count of obstructing and impeding the administration of internal revenue laws, a class-five felony. He will serve 12 months of supervised release following a three-month term in jail.

The U.S. government calculated a total of $335,211 for taxes owed from years 1992, 2005, 2006 and 2007.

“Interfering with the tax law or those administering tax laws is unacceptable; rest assured we will hold those accountable and bring them to justice,” Stephen Boyd, special agent in charge for IRS Criminal Investigation, said in a statement.

Warnes was charged on Sept. 25, 2013. Warnes was a self-employed real estate agent and broker, working under the name Gold Mountain Realty. He was also a beneficial owner and one of two principals of real estate investment and development company Aspen Ridge, LLC.

According to the investigation, Warnes owed the IRS just over $140,000 in back taxes, which he failed to pay from his 1992 tax return. Around 1994, the IRS conducted an audit to determine Warnes’ income tax liability from that year. As a result, in February of 1997, the IRS determined that Warnes owed a total of $232,242 from the year, and a federal tax lien was recorded.

“It can’t be an accident. Someone has to take actual steps to hide it from the IRS,” special agent Bryan Thiel said of the investigation.

From 2005 through 2007, Warnes made over $233,000 in real estate commissions and other income, but failed to report the majority of this amount. In 2005, Warnes filed a tax return under-reporting commissions he had made for that year by about $98,000. Warnes had allegedly earned just over $103,000 in commissions that year, but reported just $5,000 in gross receipts and $2,000 in business income.

“By the filing of this return, the defendant misled the IRS into believing his real estate business was making negligible money and that he had little in income otherwise,” Warnes’ plea agreement read.

The following years, in 2006 and 2007, Warnes failed to file tax returns despite earning a significant amount of commission, the IRS noted. The real estate commissions were in the form of checks made out to either Warnes or Gold Mountain Reality, which he did not deposit directly into a personal or business account.

Instead, the investigation reports that Warnes negotiated the checks at banks where issuing real estate title companies had accounts, converting them into combinations of cash and checks that he deposited into his account for personal expenses.

He allegedly converted commissions of greater than $10,000 to smaller amounts to avoid bank currency reporting requirements for transactions of more than $10,000. By converting the commissions, it would be more difficult to ascertain how Warnes received the funds, and whether they were income.


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