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Man Sentenced to Prison for Not Paying Federal Taxes

Many people believe that there is nothing more certain than death and taxes, but the reality is that when someone gambles with his freedom, that certainty may also include incarceration. For John Durante, this rings true. On July 14, 2011, the 55-year-old Rhode Island man was sentenced to prison for engaging in a scheme to evade payment of employee withholding taxes as well as other business taxes. The root of his legal problems did not lie solely in the $1.3 million he owed the federal government, but in his conscious effort to avoid making payments.

Between 1994 and 2001, Durante operated several small health care businesses including Special Attention Home Health Care, Special Attention Health Services and Motivational Rehabilitation Services in Connecticut. Throughout the course of operating these businesses, Durante failed to pay his corporate income and payroll taxes, according to court documents.

Following notification from the Internal Revenue Service, Durante began a series of questionable actions. He set up additional and restructured businesses without notice to, or the knowledge of, the nominee owners – his nephew, his mother and a friend. He used significant company funds for his personal use, including monies to support his gambling habit, and he continued to operate his businesses without paying taxes while making false representations to the federal tax agency.

Although Durante pleaded guilty in September 2010 to federal charges of tax evasion, he was only recently sentenced to 30 months in prison. Once released from federal custody, the former businessman will participate in two years of supervised probation and must pay all of his outstanding tax liabilities.

In cases of tax evasion, the IRS has a high rate of conviction success (90.2 percent in 2010) even though it has limited resources, according to a just released U.S. Treasury report. While accurate statistics are hard to come by, it is estimated that up to $300 billion in tax revenues were lost in 2010, totalling nearly $3 trillion over the last decade.