FRESNO, Calif. - Bay Area resident William James Kennedy, 68, pleaded guilty today to making and subscribing a false tax return, United States Attorney Benjamin B. Wagner announced.
According to court documents, Kennedy sent tax returns to the Fresno IRS office in 2002, 2003, 2004 and 2005, in which he underreported his taxable income. Kennedy, as a financial advisor, touted a variety of tax avoidance schemes, such as the use of corporation “soles" (a corporate form that enables religious leaders to hold property and conduct business for the religious entity) and debt elimination programs, to his clients in order to allow them to avoid paying income taxes. For his financial services, Kennedy was compensated by his clients but failed to properly report that income on his tax returns. In 2002, he claimed an improper charitable deduction to an entity that was one of his own corporation soles. As a result of Kennedy’s conduct, the United States incurred a tax loss of approximately $627,000. As part of his plea agreement, Kennedy will pay restitution to the IRS in this amount.
This case is the product of an investigation by the Internal Revenue Service, Criminal Investigation. Assistant United States Attorney Mark J. McKeon is prosecuting the case.
Kennedy is scheduled to be sentenced by United States District Judge Anthony W. Ishii on Nov. 24, 2014. Kennedy faces a maximum statutory penalty of three years in prison and a $250,000 fine. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory sentencing factors and the Federal Sentencing Guidelines, which take into account a number of variables.
Source: U.S. Department of Justice, Office of the United States Attorneys
