Newtown Man Admits To Avoiding $320,000 In Federal Taxes

A Newtown man pleaded guilty on July 6 to one count of filing a false federal tax return stemming from his failure to pay approximately $320,000 in federal income tax, according to federal officials.

Richard J. Dunseith, 55, waived his right to indictment and pleaded guilty before US District Judge Christopher Droney in Hartford, David Fein, the US attorney for Connecticut, said in a statement.

According to court documents and statements made in court, Dunseith failed to file an Internal Revenue Service (IRS) Form 1040 for the 2004, the 2005, and the 2006 tax years.

Instead, Dunseith declared himself to be a trust, filed an IRS Form 1041 (US Income Tax Return for Estates and Trusts) for each year in which he disclosed his individual income, but reduced his taxable income to zero because he charged a fee to the trust equal to his total individual income, according to Mr Fein.

Also, during the 2004 tax year, Dunseith withdrew approximately $161,000 from his Individual Retirement Account and failed to pay early withdrawal penalties on it, Mr Fein added.

Through this scheme, Dunseith failed to pay a total of approximately $320,271 in federal income taxes, according to Mr Fein.

Judge Droney has scheduled Dunseith’s sentencing for September 23, at which time Dunseith faces a maximum term of imprisonment of three years and a fine of up to approximately $640,000. Also, Dunseith has agreed to pay back taxes, plus applicable interest and penalties.

The case was investigated by the IRS’s criminal investigation unit. Assistant US Attorney Rahul Kale is the prosecutor.