PACIFIC PALISADES —On February 1, an attorney was arraigned at the Foltz Criminal Justice Center on charges of state income tax evasion, according to the Los Angeles District Attorney’s Office.


Allen Jeffrey Gross, who was arrested at his home in Pacific Palisades by a Franchise Tax Board agent at the end of January, pled not guilty to five felony counts of failure to file income tax returns, according to Deputy District Attorney David Berton, who is to co-prosecute the case with Albert Mackenzie, the Deputy-In-Charge of the Fraud Interdiction Program.


Gross, a partner in a Los Angeles law firm, is suspected of failing to file his state income tax returns from 2003 to 2007.  According to FTB officials, 61-year-old Gross is believed to have failed to report more than $2.3 million income he earned during these years.  He allegedly owes the state more than $178,000 in unpaid taxes.  Penalties, interest and the cost of the investigation are to be added to this amount, and each tax count carries a maximum term of three years in state prison, according to the state of California Web site.  The total loss in the alleged tax evasion is believed to be valued at about $850,000, including money owed.


The failure to file income tax returns is part of the $6.5 billion tax gap that California faces each year.  The tax gap is defined as the difference between the tax that is owed at the tax that is due.


Gross’s next court hearing is set at March 19 for a preliminary hearing setting.  If convicted, the defendant may receive a maximum sentencing of five years and eight months in state prison.