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Jim Kenyon: Painted Into a Corner

  • Valley News columnist Jim Kenyon in West Lebanon, N.H., on September 15, 2016. (Valley News - Geoff Hansen) Copyright Valley News. May not be reprinted or used online without permission. Send requests to permission@vnews.com.


Sunday, May 20, 2018

I got a phone message the other day from the Internal Revenue Service. Had I forgotten to sign my tax return? Had I put an insufficient amount of postage on the return envelope? Or worse?

False alarm.

The IRS — believe it or not — was actually calling to enlist my services.

It seems the IRS had hooked a big fish in the Upper Valley and the media wasn’t biting. A press release issued by the U.S. Attorney’s Office in Concord had created barely a ripple.

“We’re not getting a lot of publicity in this case,” Amy Hosney, an IRS special agent who serves as spokeswoman for the agency’s Boston office, lamented in the message she left me.

Salivating at the thought of the IRS nabbing a modern-day Al Capone in our own backyard, I unearthed the press release that the U.S. Attorney’s Office had sent out earlier in the week.

The big fish was more like a minnow.

According to the release, Kurt Devoid, a self-employed house painter from Quechee, had pleaded guilty in federal court on May 10 to filing false income tax returns.

Devoid, 50, has had his own painting business with a couple of crews since the early 2000s. During a four-year period — 2010 through 2013 — he had failed to report the “true amount of his personal income,” the release stated.

An audit showed that Devoid owed $98,482 in back taxes. No small amount. But a hundred grand won’t put much of a dent in the $830 billion federal deficit.

I’m not suggesting the IRS should have looked the other way. Devoid should pay what he owes, plus interest, and a stiff fine, too. But where I draw the line is at prison time. Under federal law, Devoid faces the real possibility of spending up to three years behind bars.

And for the feds to hold a small-time tradesman up to public ridicule is a bit too self-serving for my taste. What’s next? Stocks at the Quechee Balloon Festival?

I don’t blame Hosney, the IRS spokeswoman. She’s just doing her job.

Truth be told, the IRS has long been publicity hungry. By making a big deal out of relatively minor cases, the feds hope to scare the bejesus out of any ordinary Joe even thinking about cheating Uncle Sam.

“Those who illegally target our nation’s tax dollars for personal financial gain could face criminal prosecution and lengthy prison sentences” warned Kristina O’Connell, special agent in charge of the IRS’ criminal investigation office in Boston, in the press release.

Also in play: The IRS is feeling underappreciated in Washington these days. Since 2010, Congress has cut $900 million from its budget and 21,000 jobs have been axed, The New York Times reported in December.

So with the IRS claiming to be understaffed, how did a Quechee house painter end up in its cross hairs?

The information isn’t public record, Hosney told me.

In looking through Devoid’s 17-page plea agreement, which is public record, I learned that the IRS had conducted a civil audit of his tax returns in 2013.

The audit revealed that Devoid reported income he received from commercial customers but not from residential customers. Over the four years, he failed to report a total of $338,320 in gross income.

“That’s a significant amount,” Hosney said. “I think Americans who pay their fair share would be happy that we’re pursuing these cases.”

I’m glad she brought that up. For years, much of corporate America has legally — thanks to its campaign contributions and high-paid lobbyists — avoided paying its fair share.

In his 2016 presidential campaign, Bernie Sanders put together his list of “Top 10 Corporate Tax Avoiders.” Between 2008 and 2013, No. 1 General Electric made roughly $34 billion in U.S. profits, but still finagled a total tax refund of more than $2.9 billion.

Then there’s America’s commander-in-chief who refuses to release his personal tax returns and during the 2016 campaign claimed that paying as little as possible in taxes was the “American Way.”

Now Devoid could be on his way to prison. It all depends on what the judge decides at his sentencing hearing on Aug. 22 at the federal courthouse in Concord. (It’s a New Hampshire case because Devoid’s tax returns were handled by a commercial tax preparer in Lebanon.)

Under federal sentencing guidelines, the amount of income that Devoid acknowledges not reporting puts him on the cusp of receiving prison time. A sentence of eight to 12 months isn’t out of the question.

“We’re sorry the government decided to prosecute this as a criminal case,” said Norwich attorney George Ostler, whom Devoid hired late in the game. “It could have stayed a civil matter.”

But the feds have chosen to make an example of Devoid. Generally speaking, Hosney, the IRS spokeswoman, said that cases stop being a civil matter when it’s shown there is “criminal intent to violate the tax code.”

Devoid, who doesn’t have a criminal record, said that he couldn’t talk about the case. In a brief interview, Ostler told me that Devoid “runs a good business and does a lot in his community.”

He oversaw the Hartford American Legion baseball program for a while and donated his time and materials to paint the Hartford High School gym.

He sounds like a guy who tried to cut corners — and now needs to make financial amends. I’m just not sure how the feds think he’s going to pay up, if he’s behind bars.

And by the way, if the IRS wants me to publicize a case it’s bringing against some billionaire hedge fund operator, I’m all ears.

 Jim Kenyon can be reached at jkenyon@vnews.com.