Byron Center resident pleads guilty to tax evasion

Date: Jan. 26, 2026

Contact: newsroom@ci.irs.gov

Grand Rapids, MI – U.S. Attorney for the Western District of Michigan Timothy VerHey today announced that James Phillip Scholten of Byron Center pleaded guilty to federal tax evasion. Scholten is scheduled to be sentenced by the Honorable Jane M. Beckering, United States District Judge, on May 12, 2026, and faces a maximum of five years in federal prison.

U.S. Attorney VerHey stated, “Everyone must pay the full amount of income tax they owe. Those who evade the assessment or payment of taxes by willfully and intentionally not complying with their legal responsibility pose a threat to proper tax administration and impede the prosperity of our nation.”

According to court documents, Scholten was charged with one count of tax evasion, a felony offense. Scholten admitted that, between 2011 and 2024, he regularly sold scrap metal that netted him approximately $3.4 million of additional income. Scholten used a Certified Public Accountant to prepare his federal tax returns. The tax returns that Scholten filed from 2011 to 2023 were false because Scholten never told his accountant that he annually sold scrap material that generated substantial additional income. Scholten admitted that he intentionally failed to provide his CPA with recycling payment records and the amounts of his recycling income to evade assessment of tax due and owing on that income. For example, in 2021, Scholten reported that he only owed $2,465 in federal income tax. In fact, Scholten obtained an additional $610,818 in taxable income from recycling payments resulting in an additional tax due and owing of $172,618.

“Tax evasion is not a victimless crime, as it is the American public who is affected when tax dollars—money that funds essential public services like defense, roads, and education—are dodged. Scholten deliberately withheld income so he didn’t have to pay his fair share. Now he will not only pay his taxes but will face the consequences of willfully not doing so from the start,” said Karen M. Wingerd, Special Agent in Charge of IRS-CI Detroit.

This matter was investigated by IRS Criminal Investigation, the law enforcement arm of the Internal Revenue Service. Assistant U.S. Attorney Chris O’Connor is prosecuting it.

IRS Criminal Investigation (IRS-CI) is the law enforcement arm of the IRS, responsible for conducting financial crime investigations, including tax fraud, narcotics trafficking, money laundering, public corruption, healthcare fraud, identity theft and more. IRS-CI special agents are the only federal law enforcement agents with investigative jurisdiction over violations of the Internal Revenue Code, obtaining a 90% federal conviction rate. The agency has 19 field offices located across the U.S. and 14 attaché posts abroad.