Tax issues have taken center stage in the trial of Washington State Auditor Troy Kelley Tuesday, as an IRS agent and Kelley’s defense attorney sparred over whether Kelley broke tax laws.
Among other charges, Kelley is accused of filing false tax returns related to his past real estate services business. The IRS agent testified that Kelley claimed business tax deductions for non-business items including Egyptian cotton sheets and meals out with his campaign manager.
On cross-examination Kelley’s lawyer tried to suggest the feds have overreached and that questions about business deductions belong in a civil tax audit not a federal criminal prosecution.
After nearly five weeks of prosecution witnesses, the defense is expected to begin calling its witnesses Wednesday. The case could go to the jury sometime next week.
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