Ex-Cortland resident sentenced in tax case

STAFF REPORT

CLEVELAND — A former Cort- land resident was sentenced to four months in prison, four months’ home detention and three years’ probation for attempting to evade his 2004 income taxes.

Stephan Karchut of Kalispell, Mont., was sentenced by United States District Judge James S. Gwin, who also ordered him to pay restitution to the Internal Revenue Service of $44,901 in taxes owed for 2003 and 2004 and to cooperate with the IRS in determining additional income taxes, penalties and interest that he may owe for the years 2002 through 2004.

Karchut previously pleaded guilty to the charge, which involved his efforts to conceal income he earned as sole operator of a business known as PC Surveillance, Cortland, where he formerly lived.

According to his written plea agreement, beginning in 2002, Karchut followed erroneous advice from a person who held himself out as a tax professional to conceal his income and tax liabilities.

Karchut failed to file income-tax returns for 2002 through 2004, on that individual’s false advice that under a section of the Internal Revenue code, income is not reportable unless it is received from a foreign source.