A Cadillac area Chiropractor has been sentenced to 2 years in jail for evading taxes.
Paul Kelly, 53, pled guilty in August to one count of tax evasion related to a scheme that spanned from 1999 to 2006. During this time period, Kelly earned approximately $2.2 million in gross income from his Chiropractic business yet he only paid approximately $23,601 in taxes. According to the Department of Justice, Kelly understated his true tax liability by over $250,000.
"This office will continue to vigorously prosecute those who cheat the tax system to avoid paying their fair share of taxes," U.S. Attorney Patrick Miles said in a press release today. "The honest citizens of this district and America who pay their fair share deserve nothing less."
Court documents show that from 1992 until recently, Kelly owned and operated a chiropractic business in Cadillac, Michigan called Kelly Chiropractic Center (later Advanced Chiropractic Center). From 1999 to 2006, Kelly under-reported his business' income and inflated his business expenses.
The Department of Justice says Kelly maintained two sets of books and records. He only provided his tax preparers with records that did not accurately reflect his total business receipts. He also regularly claimed personal expenses, such a collectible toys, private school tuition, and snowmobile and hunting gear as an off-set to his business receipts.
"Kelly went to extraordinary means to hide his income," said Erick Martinez, Special Agent from the IRS. Kelly also utilized a business bank account in a different name in an attempt to hide his true financial status.
Kelly was sentenced to 24 months imprisonment and 2 years of supervised release. In addition, U.S. District Judge Paul L. Maloney also ordered Kelly to pay a special assessment of $100 and $279,145 in restitution to the IRS.