Melvin Reynolds

Many of you may remember Melvin Reynolds who represented the Chicago area in the U.S. House of Representatives from 1993 to 1995. We often see tax news about congressmen. He resigned from his position due to his conviction on criminal sexual abuse involving a 16-year-old campaign staffer. Mr. Reynold’s has also, since then, spent several years in jail for federal bank and campaign fraud charges before his sentence was pardoned by then-President Bill Clinton. If this doesn’t seem bad enough, keep reading.

Tax Issues

Well, it seems trouble may have followed him. A federal judge convicted Mr. Reynolds on four charges of failing to file tax returns on more than $400,000 in income for 2009, 2010, 2011, and 2012. Mr. Reynolds is guilty of violating criminal statue 26 U.S.C. 7203, which is the defendant’s willful failure to file a tax return at the time required by law.

In the trial, Mr. Reynolds defended himself against the charges, stating that the money was not income. Instead, he argued that the payments were advances on travel expenses while working as a consultant for businessmen seeking new business opportunities in Africa.

The Case

Prosecutors in the case argued that the money was in fact income, and it had been treated as such. They went on to prove their case by showing the money was deposited into various accounts and then was used for personal expenses, such as clothing, shoes, and his children’s school tuition. During the trial, the prosecutors walked the judge through Reynolds’ expenditures in question. Among the personal expenditures: hundreds of dollars on “Beachbody” workouts, Victoria’s Secret “items,” and purchases at Foot Locker. Prosecutors added that none of these could be considered ordinary and necessary expenses for consulting work in Africa. Reynolds chose not to argue that point. Fairly so.

This conviction could earn Reynolds up to four more years in prison.

Adapted from news sources by J Anton Collins. Mr. Collins is an Attorney (Former IRS) with Tax Law Offices. If you are in need of a tax attorney, please contact our team today.