Add a hefty tax bill to the woes of disgraced former East St. Louis city official Kelvin L. Ellis Sr., who is currently serving federal time for voter fraud and other crimes.
A U.S. Tax Court judge has found Ellis liable for more than $127,000 in back taxes and penalties, after dismissing objections filed by the one-time political operator who once led East St. Louis’s office of regulatory affairs. While still in power, Ellis failed to file tax returns in 2000, 2002 and 2004, and filed his 2001 and 2003 returns verylate, the judge found
“The record contains clear and convincing evidence that (Ellis’s) failure to file federal income tax returns was fraudulent,” Tax Court Judge Robert Ruwe stated, noting that Ellis “dealt in large amounts of cash in order to avoid the use of the banking system and the paper trails that would follow such use.”
Ellis consequently owes $127,730 in taxes, additions and penalties, according to the decision quietly issued late Wednesday. Currently incarcerated at the low-security Butner Federal Correctional Institution in North Carolina, the 62-year-old Ellis is scheduled for release in May 2014, according to Federal Bureau of Prisons records.
Once described by a U.S. prosecutor as “a parasite that fed upon the people of East St. Louis,” Ellis wielded considerable clout as a Democratic Party precinct committeeman until he was caught up in a vote-buying investigation. He was convicted of voter fraud in 2005 and pled guilty to tax evasion and obstructing justice.
Ellis was sentenced to serve a total of more than 10 years, but was also given credit for time spent in jail while awaiting trial. He had previously done a stretch in federal prison for extortion in the early 1990s.
In June 2010, some five years into his prison sentence, the Internal Revenue Service sent Ellis a notice of unpaid taxes. Officials said Ellis had failed to properly report income, including his East St. Louis salary, as well as consultant payments and $60,000 received from a 2002 lawsuit settlement.
At first, Ellis tried to fight the IRS from his North Carolina prison cell. That’s how he ended up in Tax Court, an important, but often obscure judicial forum located several blocks from the Capitol. Each year, the court’s 19 judges consider more than 30,000 challenges to IRS determinations; since 1997, for instance, four court decisions have specifically identified Belleville residents.
Usually, the IRS wins.
Ellis filed his three-page tax court petition in September 2010, declaring among things that the IRS had improperly calculated what he owed and had improperly audited him.
“These audits were apparently held without proper notice…and without (my) having an opportunity to review alleged income documents,” Ellis wrote.
But Ellis, who reported last year that he was suffering from an unspecified illness, faced an uphill battle from the start, not least because of his difficulty in obtaining necessary records.
“The Bureau of Prisons does not allow inmates access to the Internet or to receive documents via the computer,” Ellis advised the judge in one filing.
A former special agent in the IRS intelligence division himself, Ruwe gave Ellis extra time to prepare his case. But Ellis stopped responding and thereby effectively conceded the IRS points against him.