SALT LAKE CITY — A Utah man authorities describe as a tax "defier" will go to prison for filing fraudulent income tax returns.
Stephen Murphy admitted in U.S. District Court on Wednesday to filing false income tax returns from 2002 to 2009, some of which espoused "frivolous" positions. A return he filed in 2002 reported zero income and zero tax due on the grounds that he was "not a U.S. person" subject to tax, according to federal prosecutors.
Murphy filed several false returns claiming income tax refunds, including one in 2008 based on fictitious 1099-OID tax forms, prosecutors said. He also set up two fake charities, which were actually names attached to his personal bank accounts. He claimed “charitable contribution” tax deductions for funds siphoned to these accounts.
As part of the fraud, prosecutors said Murphy submitted W-4 forms to his employers vastly overstating his withholding allowances to minimize or eliminate tax withholdings from his pay.
In a plea agreement, Murphy pleaded guilty to one count of conspiracy to defraud the United States. Judge Dee Benson sentenced him to 24 months in prison. He also ordered Murphy to pay the IRS $83,831.