RALEIGH – Two Fayetteville certified public accountants who own separate CPA firms were found guilty recently in state courts on tax charges filed by the North Carolina Department of Revenue.

After a two-day trial in Wake County Superior Court, A. Johnson Chestnutt, 54, of 578 Milden Road, Fayetteville, was found guilty on May 13, 2004 of five counts of willfully failing to file his North Carolina individual income tax returns. Chestnutt was found guilty of these same charges in District Court in January and appealed the verdict to Superior Court.

The state’s evidence showed that Chestnutt had a history of delinquency in filing his income tax returns with the Department of Revenue and had not filed them for tax years 1997-200l. Chestnutt contended that he had filed his returns under a transposed social security number but Department of Revenue records did not show that the returns had been filed. Chestnutt’s 1997 through 2001 federal tax returns were filed with the Internal Revenue Service only after he was contacted by the Department of Revenue. Chestnutt received income from multiple rental properties and from his partnership, Chestnutt & Company, a CPA firm operating in Fayetteville for more than 15 years.

Superior Court Judge Robert H. Hobgood sentenced Chestnutt to two consecutive 45-day prison terms. The sentences were suspended and Chestnutt was placed on supervised probation for 30 months. He was ordered to pay a $2,500 criminal fine and to perform 100 hours of community service. Chestnutt must also file his delinquent tax returns within 30 days.

In another case involving a Fayetteville CPA, Johnny L. Blackwell, 64, of 329 Hamilton St. entered guilty pleas Friday in Wake County District Court to three counts of willfully failing to file his North Carolina individual income tax returns for 2000, 2001, and 2002. The state’s evidence showed that Blackwell’s earned income totaled approximately $95,323 in 2000, $108,000 in 2001 and $96,480 in 2002. Blackwell is a self-employed CPA and owns the accounting firm Johnny L. Blackwell CPA, located at 265 Gillespie St.

Wake County District Court Judge Monica Bousman sentenced Blackwell to a 45-day prison term. The sentence was suspended and he was placed on supervised probation for 18 months. Blackwell was further ordered to pay restitution of $1,820 and a $500 criminal fine. He must also perform 50 hours of community service and file all future tax returns. The charges against Chestnutt and Blackwell resulted from investigations by the North Carolina Department of Revenue’s Fayetteville Examinations Office and the Department’s Criminal Investigations Division.

Last modified on: 10/31/07 03:43:51 PM.