Grand Rapids chiropractor Kerry Thomas Kilpatrick, age 57, of Rockford, was sentenced Tuesday, May 3, to federal prison for felony tax evasion, announced U.S. Attorney Donald Davis.
U.S. District Judge Robert Holmes Bell, Kilpatrick ordered that Kilpatrick serve two years in federal prison followed by two years of supervised release. The Judge also ordered Kilpatrick to cooperate with the IRS and pay restitution of $85,014 for taxes owed in 2002. The Judge noted that Kilpatrick also owes a total of $467,243.91 for tax years1999-2007, not including interest and penalties.
Kilpatrick admitted that he evaded paying taxes for income that he earned as owner of the Kilpatrick Chiropractic Life Center in Grand Rapids for the 2002 tax year. In a written plea agreement, Kilpatrick acknowledged that did not any pay federal income taxes on income earned from 1999-2007, during which time the Kilpatrick Chiropractic Life Center had gross deposits of over $3,000,000.00.
According to court records, during 1999 through 2007, Kilpatrick was a self-employed chiropractor at Kilpatrick Chiropractic Life Center, Grand Rapids, Michigan. Kilpatrick paid himself through direct payments from his business credit union account without including any withholdings for state or federal payroll taxes. Kilpatrick also used the business credit union account to make direct payment on his home mortgage, along with other personal expenditures.
During 2001 through 2002, Kilpatrick formed numerous holding companies, corporations, and enterprises that lacked any economic substance and were located in Nevada, Oregon, and the Republic of Panama. He used the entities to evade his income taxes, pay local property taxes on his real estate, and to hold the title on his 1999 Ford Expedition, $63,000 Tiffin Motor Home, and other real property. After failing to file timely 1999 though 2005 personal tax returns,
Internal Revenue Service personnel provided Kilpatrick with documents entitled “Why Do I Have To Pay Taxes?” and “The Truth About Frivolous Arguments.” In 2006, Kilpatrick filed tax returns and reported over $1 million in adjust gross income, but claimed false Schedule “A” deductions equal to the adjusted gross income, causing zero taxable income.
At the sentencing hearing, Judge Bell emphasized that instead of relying on the advice of professionals, like CPAs and attorneys, Kilpatrick choose to follow the advice of “internet goofballs” in determining whether he should pay taxes. “Those who choose to disrespect the law and flagrantly continue to use frivolous arguments will be held accountable,” said Special Agent in Charge Erick Martinez. “The law is crystal clear; people must file accurate returns and pay their taxes.”
This case was investigated by special agents of the IRS Criminal Investigation and was prosecuted by U.S. Attorney Donald A. Davis and Assistant U.S. Attorney Raymond Beckering III.