MERIDEN, Conn. (WTNH) – A Meriden construction company has paid $250,000 in fines as well as back taxes of $112,609 after being fined for filing a false tax return.
SRC Construction was ordered to pay the fine after pleading guilty on July 15, 2016.
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In February 2006, SRC Construction made and subscribed a false corporate tax return, a 2004 Form 1120 for the fiscal year ending April 30, 2005, that overstated expenses. As a result, for the 2004 tax year, the company failed to report corporate income totaling $296,642, resulting in tax loss of $112,609.
SRC Construction had employed an internal accounting department that handled the general ledger, journal entries and bank accounts for the business according to court documents. It was stated that the they also handled the receipt and payment of invoices.
At least one individual employed by the company was responsible for overseeing and coordinating the business and financial matters for the company’s owner. The individual, who also was responsible for providing to the company’s outside accountants all information to prepare audited financial statements and tax returns, knowingly provided to the accountants a substantial number of non-deductible expenses knowing that they were non-business expenses.
That individual and others reviewed payments and directed how the items should be expensed. The individual instructed others that most, if not all, invoices be paid out of company funds, including a series of expenses that the individual knew were not deductible business expenses.
The company also itemized for the court the various accounting and other internal changes made as a result of the investigation that are intended to ensure future tax and accounting compliance