By Joseph M. Donegan on May 9th, 2012

The U.S Court of Appeals for the Third Circuit upheld previous court rulings that allow judges to take a defendant’s personal spending habits and lifestyle into account when presiding over cases of willful tax evasion.

In July 2010, James and Theresa DeMuro, who owned and managed engineering firm TAD Associates LLC, were each indicted on one count of conspiracy to defraud the United States, and 21 counts of willfully failing to account for and turn over employment taxes, according to the New Jersey Law Journal. The couple received repeated warnings from the IRS between 2002 and 2008 that they may be held personally liable under tax law for the $546,242 they withheld from employee paychecks for Social Security, Medicaid and income taxes, but never turned over to the government.