Former U.S. Tax Court Judge Charged With Tax Evasion

MINNEAPOLIS (WCCO) -- A former United States Tax Court judge is accused of filing fraudulent tax returns and obstructing an IRS audit, all while still serving on the court.

The U.S. Attorney's office in Minnesota announced Wednesday that former judge Diane Kroupa, 60, and her husband Robert Fackler, 62, are each charged with conspiracy to defraud the United states, tax evasion, making and subscribing false tax returns and obstructing an IRS audit. Kroupa sat on the bench from 2003 until she retired in 2014.

During her time on the bench, Kroupa also worked as a lobbyist and political consultant as the owner and operator of Grassroots Consulting. Court documents say she frequently claimed personal expenses as deductible business expenses for the consulting firm in her tax returns, including home renovations, pilates classes, spa and massage fees, jewelry, clothing, wine club fees, and vacations to the Bahamas, Greece, Thailand and Australia.

Prosecutors say Kroupa and Fackler also hid documents from their tax advisor an IRS officer during an audit in 2006. During a 2012 audit, prosecutors say the couple also provided misleading documents to an IRS officer in order to make some personal expenses seem like business expenses.

All in all, prosecutors say the couple purposely understated their taxable income by about $1 million, avoiding at least $400,000 in taxes.