Judge rejects woman's appeal in Columbus 'Tax Time' fraud case




  • In US
  • 2022-09-22 11:39:00Z
  • By Columbus Ledger-Enquirer
 

The woman convicted with her husband in Columbus' "Tax Time" tax fraud case has lost an appeal in federal tax court.

Lakeisha Degourville and spouse Ken Degourville Jr. made headlines in 2016 when a Muscogee Superior Court jury convicted them of state income tax evasion and felony theft by taking.

Judge Gil McBride sentenced the husband to 10 years in prison with five to serve and the rest on probation. He sentenced the wife to 15 years probation.

Their charges stemmed from state authorities raiding the couple's 3551 Macon Road "Tax Time" business on Nov. 17, 2014, alleging the tax returns they filed for clients were inflated with fraudulent deductions. State agents said the Degourvilles' false claims defrauded Georgia of more than $1.2 million in 2011-2013, and that in 2013, the state paid more than $462,000 based on the fraudulent returns.

During trial, one client testified the return prepared for her claimed she owned a business, though she did not and never told Tax Time that she did. Still in 2013 Tax Time filed documents stating she ran a direct-sales operation with a $3,920 profit, $2,905 in vehicle costs, $201 in advertising expenses, $3,309 for insurance, $4,019 in office expenses, $3,017 for machinery, $3,321 for maintenance and a net loss of $18,107.

The IRS comes in

After trial, the Internal Revenue Service pursued Lakeisha Degourville for taxes owed from 2012, alleging she deliberately misrepresented her income.

Lakeisha Degourville appealed the IRS findings to federal tax court, where Judge Thomas Wells issued a Sept. 12 decision.

Wells noted that Tax Time in the years 2009 to 2014 was "recognized as one of the largest tax return preparation businesses in Columbus," employing 18 people. Lakeisha Degourville claimed in 2012 it was among three businesses she had, including a salon called Xplosions Hair Design and a restaurant she owned with her husband, whom she married in 1999.

The judge found that in 2012, Lakeisha Degourville reported her gross receipts as $36,127, paid no income tax and instead received a refund of $2,886. Yet an IRS review of deposits made that year to the couple's accounts at Columbus' SunTrust Bank showed a total of $1,054,255, and the agency decided about $800,000 of that was unreported.

Holding her husband accountable for part of that income, the agency claimed Degourville owed back taxes on $439,705. It wanted her to pay $139,249 in taxes and a penalty of $100,022, according to the court.

She challenged the IRS assessments, but was unable to provide documentation to substantiate her claims: She maintained she didn't have the needed records because they remained in the state's custody after her trial.

Finding in favor of the IRS, Judge Wells noted the Degourvilles at the time made multiple purchases in cash transactions, allegedly to conceal their wealth: They bought houses on Amber Drive, Beallwood Avenue, Glenwood Road and Irwin Way in Columbus, and on Maddox Drive in Hamilton.

In November 2013, they paid $90,000 for a plot of land on Preservation Trail in Midland and $366,436 to build a 3,727-square-foot house. The couple and their three children lived in that house in 2012, though the wife claimed in tax filings to live on Beallwood Avenue and the husband on Columbus' Quail Creek Way.

The court found the couple also paid cash for several motor vehicles from 2010 to 2013, including a 2006 Hummer, a 2009 Chevy C15, a 2012 Lexus, a 2013 Honda, a 2013 Audi and a motorcycle.

"Extensive dealing in cash to avoid scrutiny of a taxpayer's finances is a badge of fraud," Judge Wells wrote, later adding he found that Lakeisha Degourville "engaged in cash transactions in an effort to conceal income and that her overall course of conduct is probative of fraud."

The judge noted Lakeisha Degourville argued in court that she neglected to report some income in 2012 because running so many businesses made her "lack attention to certain areas."

Wells wrote: "In general, operating a few businesses is not a reasonable defense to under-reporting the income derived therefrom, nor is it a reasonable excuse considering one of those businesses was a tax-preparation company."

Because Lakeisha Degourville failed to prove the IRS assessment of her 2012 income was "unfair, inaccurate, or in error," the agency's claim of $439,705 in taxable income is "sustained in full," the judge ruled.

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