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“Money” in the US has tangible existence in three forms:Coin created by the US Treasury, which still has nothing to do with the Federal Reserve.Bank notes. Functionally equivalent to coins, but have a legal distinction as Bearer liabilities of the Federal Reserve.Ledger balances on Fed mainframes in some secret location. Hard drives and magnetic tapes list balances at Federal Reserve of accounts of :US TreasuryBanks with Master Account agreements with their local federal reserve bank (such as Bank of America and Richmond Fed).A handful of other customers, such as foreign governments’ dollar accounts and international organizations such as IMF.If you only wanted to know “where the money came from,” you can skip the rest of the answer. The monetary base has no physical limit. Money is printed through some COBOL program in some secret bunker owned by the Fed.A Planet Money episode about ACH give a hint about how the Fed works. ACH and checks are cleared through the mainframes. Essentially, the Fed only said “I could tell you where these mainframes are, but then I’d have to kill you.”Episode 489: The Invisible Plumbing Of Our EconomyThe rest of this answer deals with the legal aspects of the bailout. While the Fed could print 100’s of trillions of dollars with ease, they have limited legal authority. It goes into the sausage-making quite a bit, but personally I like knowing exactly how these programs concretely worked.Legal Constraints on MoneyAll three types of money have little physical constraint, but have legal constraints to how much the Federal Government can print and how the money is used.For #1, the “trillion dollar coin” idea was floated because the US Treasury has theoretically unlimited power to create coinage. Obama could not have spent the coin as he saw fit. Spending was set by Congress. But he could have funded that spending with a trillion-dollar coin instead of debt issuance.#2 and #3 is the substantial portion of money. They have no physical constraints but have significant legal constraints. The Fed could arbitrarily credit Bank of America’s account with $500 trillion dollars. Bank of America mainframes could also credit your account with $1 trillion. Bank of America has many layers of controls though to prevent that from happening. BoA’s shareholders and regulators heavily control and audit its books and computer programs.Similarly, the Federal Reserve banks can only act within the guidelines of the Federal Reserve Act. The 12 Federal Reserve banks are corporations for purposes of entering contracts, to sue and be sued, etc., but exist within strict statutory guidelines. The Kansas City Fed can’t just start selling tacos.In normal times, the Fed used two main methods to adjust the reserve balances:Open Market Operations. The New York Fed enters into agreement with its brokers, called “Primary Dealers.” If a Treasury is purchased on open market, the Primary Dealer’s Fed account is credited, usually at a separate clearing bank. Sales of the Fed’s assets conversely destroy money by debiting the bank account.Discount Window, or Lender of Last Resort. The Fed will lend margin to member banks based on the quality of collateral. For example, Treasuries may get 99 cents in margin while credit card loans get less than 50 cents.The Fed has ledgers of Treasuries similar to its ledgers of dollars. So for both OMOs and Discount Window, the Fed has possession of Treasuries on its mainframes.For purchases or lending of non-Treasury securities, the Fed either takes physical possession of the securities (i.e. Promissory Notes) or the Fed’s account at the DTC is credited. DTC is the central securities repository for most stocks, bonds, etc.Bear Stearns and AIG BailoutsIn 2008, the Fed used a dormant clause of the Federal Reserve Act for “unusual and exigent circumstances.” Specifically, the Federal Reserve Board of Governors authorized the New York Fed to backstop JP Morgan’s purchase of Bear Stearns.JP Morgan’s agreement to purchase Bear Stearns aside from $30B in assets.The $30B in assets was transferred to a Delaware LLC called “Maiden Lane LLC.” Bear Stearns/JP Morgan received $30B in consideration from Maiden Lane LLC in exchange for the assets.The LLC was funded with a $1.15B subordinated loan from JPM and a $28.82B loan from Federal Reserve Bank of New York. FRBNY credited “out of thin air” whichever account was used by the LLC and received the first proceeds from the loan. Furthermore, after both the FRBNY and JPM loans was paid back, FRBNY, received residuals.Maiden Lane II and III LLCs were setup to bailout AIG. The terms were generally similar, with AIG transferring toxic assets to the LLC and FRBNY lending a senior note to the LLC. The LLCs’ accounts at their bank were credited “out of thin air.”All three LLCs have paid back FRBNY in full.FEDERAL RESERVE BANK of NEW YORKTARPOther answers mentioned TARP, but this program had nothing to do with the Fed. The Treasury purchased preferred shares of banks with transfers from its Fed accounts to the banks’ Fed account. Treasury funded its Fed account with Treasury auctions.Shadow Banking System BackgroundThe Fed created an alphabet soup of programs which backstopped far more debt but made less headlines. The programs were: TAF, CPFF, AMLF, MMIFF, PDCF, TALF and TSLF. The Treasury also had a short Money Market Fund guarantee.Credit and Liquidity Programs ArchiveIn general, these programs backstopped the “shadow banking system.” The shadow banking system had replaced typical bank deposits for institutions with large cash balances. For example, a pension fund could:Put cash balances in a Money Market Fund instead of a traditional bank.Ask its custodian bank to lend its securities. I.e. a hedge fund could short Apple by borrowing a share from CalPERS. The hedge fund has to pledge 50% margin in case Apple goes up in price. The Custodian Bank now has a substantial amount of cash.The MMF and custodian bank then invest in Repo or Commercial Paper.Repurchase Agreements (repo): The MMF/Custodian Bank purchases securities with the promise to buy them back. So $100 mil in securities could be purchased for $94.97 million. Then the counterparty promised to buy back the securities for $95 million the next day. The $0.03 million “haircut” is the interest. Technically, most repo was also tri-party repo, with either JP Morgan or Bank of New York standing in the middle.Commercial Paper: Commercial Paper is a short-term loan with a guarantee by a bank such as Lehman Brothers. A lot of toxic assets were bought by a shell corporation (“SPV”). The shell corporation then issued commercial paper with backing by a bank such as Lehman. This is known as Asset-backed Commercial Paper (ABCP).A true bank has a charter from either OCC or a state charter. Bank accounts had 10% reserve requirements and, before 2008, these reserves yielded 0%. So institutional funds yielded more from their cash balances by using the shadow banking system.The stress on ABCP and Repo began in 2007 with BNP Paribas suspending withdrawals on hedge funds with toxic assets similar to ABCP and some Repo agreements. Starting in 2007, the cost of Repo funding went up and investors demanded better collateral.The Fed introduced the alphabet soup of programs under “unusual and exigent circumstances” to get around the fact bank runs happened to non-banks. While Repo and Commercial Paper were used instead of bank deposits, they did not have the statutory access to the Discount Window.Term Auction Facility (TAF)TAF was instituted in December 2007 under pressure from repo funding. It was merely a different form of discount window, where banks bid on a set amount of discount window funding. The banks who bidded the highest interest rates bid received the funding. From the Fed’s perspective, the program was needed to hide which banks needed liquidity.As with the discount window, the Fed could credit the bank’s Fed accounts out of thin air while taking possession of the collateral.Term Auction Facility (TAF)PDCF and TSLFBear Stearns failed so suddenly because it relied on overnight Repo agreements for funding its balance sheet. By early 2008, the repo market had contracted to only accept Treasuries as collateral. Bear Stearns also started losing traditional bank credit lines.Without the Fed’s intervention, JPMorgan would have stopped clearing trades for Bear Stearns. Bear Stearns was not a chartered bank. Broker-dealers had to settle cash for trades using a clearing bank. Without a clearing bank’s constant short-term credit, a broker-dealer must declare bankruptcy.After Bear Stearns, the Fed put in place the Primary Dealer Credit Facility (PDCF). Essentially, PDCF gave the same terms to non-bank Primary Dealers as the Fed gave banks with its discount window. Administratively, it was a tri-party repo agreement between the Primary Dealer, New York Fed and one of two clearing banks (JP Morgan or Bank of New York).So Merrill Lynch could transfer a corporate bond to JP Morgan, with JP Morgan having that account in the name of the New York Fed. The New York Fed then credits out of thin air Merrill Lynch’s account at JP Morgan, through JP Morgan’s account at the New York Fed.The Term Securities Lending Facility (TSLF) was similar, but involved swapping the Fed’s Treasury bonds for Agency Mortgage-Backed Securities (i.e. Fannie/Freddie) and AAA non-Agency MBS. The Primary Dealer would transfer the collateral to their clearing account, likely using DTC. The Fed would transfer Treasuries it owned previously to the clearing bank. Then the clearing bank would swap the ownership of the two securities. At maturity, the loans would swap back given the auction rate.US Treasury Money Market Fund GuaranteeEven with the PDCF and TSLF, Lehman declared bankruptcy after JPMorgan and Citibank stopped clearing their trades. The Reserve Primary Fund held Lehman-backed Commercial Paper and “broke the buck,” where a share went below $1.00 NAV.On September 19, 2008, Hank Paulson used an expansive reading of the Exchange Stabilization Fund to backstop up to $50 billion in losses on Money Market Funds. Like TARP, these funds were from Treasury Auctions or taxes, and not “out of thin air” like the Fed programs.Treasury Announces Temporary Guarantee Program for Money Market FundsAMLFAlso on September 19, the Fed started the ABCP Money Market Mutual Fund Liquidity Facility (AMLF) to help MMFs get liquidity for withdrawals. This program was administered directly with Fed members who had purchased Commercial Paper from a Money Market Fund. The ABCP had to have been rated the highest rating by two ratings agencies (A-1/P-1/F-1).The loan was non-recourse. So when a bank purchased ABCP from a MMF, it took no risk by taking the loan from the Fed. The Boston Fed administered the program. Administratively, the Boston Fed would credit the borrowing bank out of thin air and the borrowing bank would transfer the ABCP to the Boston Fed’s account at DTC. At maturity, the bank would have to repay the loan amount. However, since it was non-recourse, the bank can default on this loan and the Boston Fed can only use the collateral for repayment.CPFFThe Commercial Paper Funding Facility (CPFF) commenced in October 2008 due to the market for new Commercial Paper drying up. While AMLF funded previously issued Commercial Paper, CPFF funded Commercial Paper directly from the issuers.In administrative terms, the New York Fed engaged PIMCO and State Street to set up the facility. The New York Fed first worked with one of their Primary Dealers to create the trade agreement with the issuer. So Harley-Davidson (yes, one of the program recipients) could make an agreement with Goldman Sachs to sell $100 million in new Commercial Paper to Goldman Sachs’ client, the New York Fed.A shell corporation, CPFF LLC, was created by New York Fed to take beneficial ownership of the Commercial Paper. The New York Fed made recourse loans equal to the purchase amount of each transaction. CPFF LLC in turn used State Street as a Custodian Bank. So these recourse loans were funded out of thin air to State Street’s accounts on behalf of CPFF LLC.The money then flew from State Street’s accounts to DTC’s clearing account for State Street and then to the issuer, such as Harley-Davidson. The issuer’s books would have the Commercial Paper registered to Cede & Co., the nominee of DTC. Then DTC would credit that Commercial Paper to State Street. Finally, State Street held the assets to credit CPFF LLC.MMIFFMoney Market Investors Funding Facility worked directly with MMFs to buy their financial institution liabilities, such as CDs and commercial paper. Apparently, even commercial paper issued by banks was strained in 2008.There are fewer details easily available on this program. It set up a minimum of five shell corporations (SPVs). Their custodian banks were credited out of thin air by the Fed. Then the SPVs purchased these financial institution liabilities from eligible funds. Ultimately, these SPVs allowed these MMFs to meet redemptions where otherwise the market would be strained.TALFTerm Asset-Backed Securities Loan Facility began operation in March 2009. It created an SPV called TALF LLC which received a loan from the New York Fed. As before, its custodian was credited the money out of thin air. TALF LLC then purchased AAA tranches of Asset-backed Securities backed by assets other than mortgages (such as credit cards, auto loans, student loans, etc.)This program got the nastiest headlines since many counterparties were very wealthy or foreign. But the Fed would maintain the true beneficiaries were the ultimate borrowers.ConclusionLost in the sausage-making here is why unemployment went to 10% in the US. Isn’t that what it’s all about? In short, the Fed constantly tries to meet an inflation target by printing or destroying money. Prices are set by both supply and demand curves. However, the money supply can only affect the demand side. It can print more money and usually that money will get spent.Before 2008, “lowering interest rates” really meant the Fed crediting accounts out of thin air in exchange for T-bills. This new money yielded 0% and so usually the money was spent on other securities. Interest rates went down due to higher demand. Ultimately, the new money was spent on real consumption or investment.In September 2008, the Fed hit the zero-lower bound. It could print money and buy T-bills, but the T-bills already yielded 0%. The market demanded cash so much that it was fine getting 0% on T-bills. Now, typical OMOs had no effect on demand.Declines in demand at the zero-lower bound also had a positive-feedback cycle. The math does not work with everyone demanding a fixed amount of liquidity. If demand for cash goes up, then the price of cash goes up. The “price” of cash is really the price of everything else going down.The Great Depression happened due to demand increases for gold world-wide. In that case, deflation was 50%. If markets were perfect, 50% deflation wouldn’t matter since wages would decrease to compensate. Instead, unemployment went up to 25%. Real-world employees have strong expectations of consistent nominal wages. So with 10% revenue declines at a company, the managers are likely to cut employees or hours rather than cutting per-hour wages.So, the details of backstopping the banking system (real and shadow) are somewhat slimy. The structure of Federal Reserve banks is almost certainly unconstitutional under the Appointments Clause. Although the Board of Governors oversaw most of these programs, the unconstitutionally appointed Bank Presidents had significant influence.These programs backstopped trillions in debt and often used a select number of private corporations to administer them. There was no real oversight of the Board of Governors provided under Section 13(3). Section 13(3) was later overhauled by Dodd-Frank.In the end, I would favor not having bailouts at all. Do not even have the Discount Window, even though lender-of-last-resort goes back to the 1800’s. Don’t even have the FDIC. The last one sounds particularly crazy, but the FDIC was the on bank bailout that cost the government money.But we must have an unassailable monetary policy at the zero-bound. Given how much damage was caused by 2008, it is criminal that the entire economics profession is not focusing on how to get around the zero-bound.At the zero-bound, I favor the “helicopter money” proposal Bernanke gave for Japan in 2001. When rates on Treasuries and Agencies are zero, then credit payroll tax and Social Security recipients with money out of thin air. Helicopter money happened indirectly anyway with the 2008–2011 deficits and then the Fed purchasing trillions in Treasuries. Credit everyone’s accounts as a last resort and until general economic measures recover.Furthermore, 100% reserve banking (such as the pending TNB bank) should be favored for cash accounts of regulated institutions, such as pensions. Banks and Commercial Paper would no longer have an exemption for Securities Act registration. So regular depositors would generally have 100% reserve accounts as well. Demand deposits with mismatched maturity assets could not use words such as “bank deposits” in any marketing, including to “sophisticated” investors. These short-term liabilities would need to be registered and underwritten like other bonds, unless only sold to sophisticated investors. In general, have a great mindfulness of the inherent fragility of maturity mismatch.

From IRS Files:Criminal InvestigationMinnesota Chiropractor Sentenced For Tax EvasionOn April 19, 2017, in Minneapolis, Minnesota, Donald Gibson was sentenced to 33 months in prison for tax evasion and for presenting a fake financial instrument to the U.S. Department of Treasury. Gibson failed to file his 2004 through 2014 individual income tax returns and attempted to evade his income tax liabilities for these years by diverting money to a warehouse bank called MYICIS, cashing over $800,000 in business checks at a check-cashing facility and submitting fake money orders and bogus financial instruments to the IRS. Gibson also formed Sovereign Christian Mission (SCM), a purported religious organization, as a way to further hide his chiropractic income and pay for his personal expenses. Gibson used SCM to pay for his groceries, entertainment, dinners, and car repairs. While the IRS was auditing his tax returns and later during the criminal investigation, Gibson presented a fake financial instrument purporting to be worth $300 million to the IRS and claimed that it paid off his income tax liabilities.Louisiana Criminal Defense Attorney Sentenced for Tax EvasionOn April 19, 2017, in Baton Rouge, Louisiana, Michael Thiel, of Baton Rouge, was sentenced to 30 months in prison for tax evasion, two years of supervised release and ordered to pay $998,352 in restitution to the IRS. Thiel operated a criminal defense practice in Hammond and, from 2003 through 2013, did not file income or employment tax returns and didn’t pay taxes he owed. Thiel concealed his income and assets creating three trust and nominees. Thiel used these three trusts to evade the payment of federal income and employment taxes. In January 2007, Thiel used nominees to purchase his primary residence for $435,000 and entered into a phony lease agreement with the nominees to conceal his ownership of the property and shield it from IRS collection efforts. Between January 2007 and January 2014, Thiel deposited $416,283 into the nominee account that was used to secure and pay the mortgage on the property.Former Company President Sentenced for Wire Fraud and Income Tax EvasionOn December 29, 2016, in Rockford, Illinois, Christopher A. Jansen, of St. Charles, was sentenced to 70 months in prison, three years of supervised release, and ordered to pay $269,978 in restitution. Jansen was President of Baytree Investors Inc., an Illinois corporation engaged in acquiring trucking companies. In 2001 Jansen learned DFC Transportation was for sale, created a Delaware corporation, DFCTC Holding Inc., and arranged for DFCTC to purchase DFC with money Jansen borrowed using DFC receivables as collateral. Jansen arranged for other individuals to be the owners of DFCTC, some of whom were previous investors in failed Baytree business acquisitions. With appointment or authority, Jansen represented to others that he was the corporate secretary and controlled both DFCTC and DFC to avoid having shareholder or director meetings. Jansen then arranged for DFC to use its receivables to borrow from a bank and, without authorization, ordered employees to transfer money from DFC to DFCTC. Jansen then distributed the money to himself and others for their personal use and benefit. In addition, in 2002 Jansen used a bank account in the name of a dissolved corporation to receive his income and disburse his expenditures. He intentionally failed to have the dissolved corporation file informational forms with the IRS for taxable income distributed to him from the account. Jansen also failed to have Baytree and DFCTC file informational forms with the IRS regarding distributions of taxable income to him. In addition, Jansen did not have a bank account in his name in order to avoid reporting any income to the IRS.Virginia Resident Sentenced for Fraudulent “Savvy Bag” Investment SchemeOn December19, 2016, in Alexandria, Virginia, Patricia Means of Richmond, was sentenced to 60 months in prison, three years of supervised release and ordered to pay restitution of $1,136,862, including $201,065 to the IRS for defrauding investors. Means was a licensed investment broker from 1983 until prior to moving to Virginia in 2006. Around February 2009, Means developed a scheme to defraud investors by creating a product called “Savvy Bag,” a purported handbag organizer and solicited investments in the product. Between 2009 and 2014, Means obtained over $1.1 million from victims and spent less than $3,000 to develop, produce or sell the product. In addition, between 2010 and 2014, Means received taxable income more than than $907,000 that she failed to report on her income tax returns.North Carolina Man Sentenced for Tax Evasion and Possession of an Unregistered FirearmOn December 16, 2016, in Charlotte, North Carolina, Reuben T. DeHaan, of Kings Mountain, was sentenced to 24 months in prison for tax evasion and possession of an unregistered firearm. DeHaan owned a holistic medicine business, which he operated out of his residence under the names Health Care Ministries International Inc. and Get Well Stay Well. DeHaan admitted that, from 2008 through 2014, he earned more than $2.7 million in gross receipts, but failed to file income tax returns for those years and evaded the payment of approximately $678,000 in income tax. He did this with the help of Richard H. Campbell Jr. and others, by setting up straw companies and opening bank accounts in the name of the straw companies to hide his income and assets from the Internal Revenue Service. DeHaan also claimed he was exempt from the payment of taxes because he was an ordained “medicine man” whose earnings were exempt from taxation. In addition, DeHaan also admitted to the possession of unlicensed firearms.Florida Man Sentenced for Tax EvasionOn November 28, 2016 in Tampa, Florida, Steven Headden Young, of St. Petersburg, was sentenced to 21 months in prison, ordered to pay restitution in the amount of $509,455 to the IRS and ordered to file his corrected tax returns for tax years 2007 through 2011. Young evaded a substantial portion of his personal federal income taxes for the years 2007 through 2011 by falsifying expenses to negate his income. Young, who prepared and filed his own tax returns, created bogus business expenditures and deducted them from his Schedule C income. He provided the IRS with a false lease agreement and false invoices between his real estate company and a sham corporation, purportedly based in the Dominican Republic. Young also falsely filed as head-of-household (HOH) to take advantage of the tax benefits of the HOH filing status when he was indeed married. HOH provides for less taxes and higher credits than when filing as single, married and filing jointly, or married and filing separately. Young made false statements to the IRS claiming he was single, when he was married and living with his wife. Young also interfered with the IRS audit and tax assessment of his personal federal income taxes by attempting to intercept third-party records that had been subpoenaed by the IRS from Bank of America (BOA). Young fabricated a letter from the IRS to BOA in an attempt to redirect bank records that had been intended for the IRS to another address, which had been opened by Young in the name of an IRS employee.Ohio Psychiatrist Sentenced for Tax EvasionOn November 21, 2016, in Cleveland, Ohio, Sandra Vonderembse, an Oregon, Ohio psychiatrist was sentenced to 18 months in prison, one year of supervised release and ordered to pay $565,128 in restitution to the IRS for tax evasion. From as early as 2005, Vonderembse failed to pay taxes and filed, and caused to be filed, with the Internal Revenue Service (IRS) false and fraudulent tax returns that included false statements regarding her income and the amount of tax due and owing. From 2009 through 2011, Vonderembse falsely claimed to have no taxable income and to owe no taxes, despite earning more than $240,000 each year while working as a psychiatrist. Vonderembse used nominee entities to conceal income from the IRS, and sent fake financial instruments to the IRS in purported payment of her taxes. In total, from 2005 through 2011, she attempted to evade more than $360,000 in income tax liabilities.Hawaii Couple Sentenced for Failure to Pay Income TaxOn November 17, 2016, in Honolulu, Hawaii, Calvin Kim and Chun Cha Kim, husband and wife, were sentenced to 36 and 12 months in prison, respectively, for violations of federal tax laws. In addition, Calvin Kim and Chun Cha Kim were ordered to pay restitution in the amounts of $1,969,463 and $1,937,267, respectively, which represent all back taxes and penalties. Criminal fines of $250,000 and $100,000 were also imposed on Calvin Kim and Chun Cha Kim, respectively. In addition, both defendants agreed to the imposition of a fraud assessment by the IRS, which may amount to an additional civil penalty of $3 million. The Kims already have paid more than $4 million in back taxes and interest. The Kims were the sole shareowners of businesses that sold heating pads and other products. In October 2000, they became followers of so-called "tax protestors" and decided not to file a valid tax return from then till May 2014. From 2005 to 2012 alone, the tax returns of the Kims’ businesses showed payments ranging from $418,238 to $971,983 for Calvin Kim for each year, and $271,564 to $1,000,562 for Chun Cha Kim, resulting in taxes owed for each of those years ranging from $133,009 to $325,375 for him and $83,828 to $335,378 for her.Tax Defier Sentenced for $1 Million Tax EvasionOn November 16, 2016, in Kansas City, Missouri, Harold R. Stanley, of Peculiar, was sentenced to 60 months in prison, which includes a sentencing enhancement for obstruction of justice. Stanley, an electrical engineer, was hired by companies as a consultant and received $971,604 from self-employment from 2005 to 2009 as an independent contractor. However, Stanley failed to file any tax returns for 2005 and 2006. For tax years 2007 through 2009, Stanley filed substantially correct returns but left the tax line entry blank and failed to submit any payment. Stanley submitted fake money orders for payment to the Internal Revenue Service, returned documents to the Internal Revenue Service claiming that the tax assessments were satisfied because they were “Accepted for Value,” filled out payment vouchers with his name in all capital letters but didn’t submit payment and submitted a false criminal referral to IRS – Criminal Investigation. From 2005 through 2009, Stanley had taxable income of $686,829; the criminal tax loss is $259,900.Wisconsin Embezzler Sentenced for Fraud and Tax EvasionOn November 3, 2016, in Madison, Wisconsin, Lisa Buchholz, of Luck, was sentenced to 36 months in prison, three years of supervised release and ordered to pay restitution of $193,909 to the victim of her fraud scheme. While employed as a bookkeeper for Four Seasons Wood Products (FSWP) in Frederic, from May 2008 until June 2012, Buchholz devised a scheme to defraud the company. In addition, Buchholz failed to file income tax returns for 2008, 2009, 2010 and 2011, and committed income tax evasion in 2011 by making false statements to an IRS criminal investigator during an interview in 2013. Buchholz’s actions caused a fraud loss of $172,176 to FSWP and a tax loss of $111,553 to the IRS.Texas Man Sentenced for Filing False Tax Returns and Corruptly Endeavoring to Impede the Internal Revenue LawsOn October 28, 2016, in Austin, Texas, Victor Antolik was sentenced to 72 months in prison following his conviction on filing false tax returns and corruptly endeavoring to impede the due administration of the internal revenue laws. Antolik owned and operated a commercial janitorial business with locations in Austin, San Antonio and Houston, Texas, under a variety of business names, including Diversified Building Services Inc., DBS Services Inc., Partners in Cleaning, PIC Building Services and BSI Industries. Antolik also earned income as a real estate agent, real estate broker and property manager. Antolik earned a portion of his real estate income through his companies SGN Realty Inc. and Signature Realty Services. Antolik submitted to the Internal Revenue Service (IRS) false individual income tax returns on which he underreported his income for tax years 2004, 2007 and 2008. In addition, between 1998 and 2014, Antolik attempted to obstruct the due administration of the internal revenue laws by, among other things, attaching altered Forms W-2 and 1099 to his tax returns, providing false information to his accountant that was used to prepare corporate and individual income tax returns on his behalf, and using nominees to conceal income and assets. In addition to the prison term imposed, Antolik was also ordered to serve one year of supervised release and to pay restitution to the IRS in the amount of $916,358.