Walled Lake Accountant Faces Five Years in Prison for Evading $318,000 in Taxes

Walled Lake Resident Pleads Guilty to Major Tax Evasion

In a surprising turn of events, an Oakland County man has pleaded guilty to evading a staggering $318,000 in federal income taxes. Paul Kozowicz, who is 75 years old and hails from Walled Lake, entered his plea on Thursday and admitted to intentionally failing to report around $1.15 million in taxable income over a span of nine years. This news came directly from the U.S. Attorney’s Office for the Eastern District of Michigan, which issued a press release detailing the case.

A Career Shift and New Beginnings

It seems that Kozowicz had a successful career before stepping into legal trouble. From 2002 to 2011, he worked as a full-time employee at a Birmingham law firm, where he provided accounting and financial services. However, things took a downturn for him in 2011 when the firm reorganized, cutting his salary down to just 20% of what he was previously earning. Facing financial pressure, Kozowicz decided to become an independent accountant and consultant to make up for the lost income.

With this change, he launched his own corporation named FACS, Inc. to provide his services to clients. This new venture included setting up a bank account under the business name, and initially, it might have seemed like a straightforward business operation. But, things weren’t as they appeared. Investigators uncovered that Kozowicz failed to report any income generated by FACS on both his individual and corporate tax returns from 2011 to 2019.

A Business in Name Only

What’s more surprising is that Kozowicz did not file a corporate tax return for FACS at all and neglected to keep any proper records. This lack of diligence led to him missing out on meeting Michigan’s annual corporate filing requirements. Instead of using the funds from FACS solely for business-related expenses, he utilized this money for personal expenses and other needs, which was clearly against the law.

While he reported his reduced salary from the law firm and certain taxable social security income on his personal tax returns, he completely omitted any mention of the earnings from his corporation. This decision certainly raised eyebrows and led to a significant investigation by federal authorities.

Consequences of Tax Evasion

As Kozowicz faces the consequences of his actions, he could be looking at up to five years in prison. Additionally, he is required to pay back $318,243 to the IRS after his sentencing, which is scheduled for January 21. His attorney, Kimberly Stout, has yet to provide any comments regarding the situation.

IRS Issues Strong Warning

In light of the guilty plea, Charles Miller, the Special Agent in Charge of the IRS Criminal Investigation in the Detroit Field Office, commented on the situation, stating, “The license to run a business is not a license to avoid paying taxes. Paul Kozowicz’s blatant fraud, hiding income, and having his shell business pay his purely personal expenses, cheated all Americans, since we all pay our fair share for the government services and protections that we enjoy.”

This case is a stark reminder of the obligations that come with running a business. Just last month, a couple from Macomb County faced prison time for Medicare fraud and tax evasion, and prior to that, Albert Morrison, the former president of Madison District Public Schools, was sentenced for his involvement in a bribery scheme and taxing issues.

The implications of Kozowicz’s actions are significant, both for himself and for the wider community. It seems that the IRS is cracking down on those who choose to sidestep their legal responsibilities, making it evident that all business owners must prioritize transparency and compliance.