Chiropractor to prison for tax evasion

Published: 2011-05-04 10:33:16
Author: WOOD-TV | May 3, 2011

A self-employed Grand Rapids chiropractor has been sentenced to two years in federal prison and two years of supervised release for tax evasion.

The ruling was handed down Tuesday for 57-year-old Kerry Kilpatrick.

U.S. District Judge Robert Bell also ordered Kilpatrick to cooperate with the IRS and pay restitution of $85,000 for taxes owed in 2002. Bell noted that Kilpatrick also owes a total of $467,000 for tax years 1999-2007, not including interest and penalties.

Kilpatrick admitted he evaded paying taxes for income he earned as owner of the Kilpatrick Chiropractic Life Center for the 2002 tax year.

In a written plea agreement, Kilpatrick acknowledged he did not any pay federal income taxes on income earned from 1999-2007, during which time the business had gross deposits of more than $3 million.

Kilpatrick paid himself through direct payments from his business credit union account without including any withholdings for state or federal payroll taxes, according to a news release. He also used the account to make direct payment on his home mortgage, along with other personal expenditures.

During 2001-2002, 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 1999-2005 personal tax returns, the IRS provided Kilpatrick with documents entitled "Why Do I Have To Pay Taxes?" and "The Truth About Frivolous Arguments."

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