POTSDAM – A Potsdam man faces three years in jail and a $100,000 fine after pleading guilty in federal court on tax charges.

Timothy M. Schmidt, 53, has entered a guilty plea to federal income tax charges involving a deficiency of $270,802.49.

According to Northern New York District U.S. Attorney Richard Hartunian, Schmidt, owner of contracting business Sylvan Falls Painting and Wallpaper, will pay all back taxes for 2004 through 2010, totaling $270,802.49.

The news release notes that beginning in 2003, Schmidt was hired by a person with initials D.C. to complete various jobs at her residence, including an addition. Hartunian says that Schmidt realized income of about $895,000 from D.C. over and above the income he reported on his personal income tax returns.

Hartunian says Schmidt failed to include $162,362 as income on his 2004 personal federal tax return, $198,063 on his 2005 return, $196,995 on his 2006 return, $145,555 on his 2007 return, $83,520 on his 2008 return, $38,341 on his 2009 return, and $70,140 on his 2010 tax return.

“Each of these returns were made and signed by him under penalty of perjury. The Defendant knew these tax returns were false because each substantially under reported his income for that year. The foregoing resulted in a tax deficiency to the IRS totaling $270,802.49,” Hartunian’s statement said.

Schmidt has agreed to pay restitution to the Internal Revenue Service.

He is facing a statutory maximum sentence of three years, a term of supervised release of up to one year, and a maximum fine of $100,000.

The case was investigated by the Internal Revenue Service, Criminal Investigation, New York Field Office, and the Potsdam Police Department.

The case is being prosecuted by Assistant United States Attorney Ransom P. Reynolds.