Among the legal problems a former AMA Director could face are violations of federal and state tax codes, according to experts contacted by Roadracingworld.com. Dal Smilie, Chief Legal Counsel for the Director’s Office of Montana’s Department of Administration, resigned from his AMA Board seat late last year as allegations arose that he had submitted and been reimbursed for falsified expense reports. Last week, the AMA Board decided to refer the results of a three-month forensic audit of Smilie’s expense reports to law enforcement authorities. The forensic audit determined that Smilie had submitted and had been reimbursed for falsified expenses over a period of time. Long-time AMA Director Jeff Smith, who served as Assistant Treasurer on the AMA Board and signed Smilie’s expense reports before submitting them to the AMA staff for payment, resigned Friday. Smilie has not yet returned a phone call from Roadracingworld.com seeking comment. Internal Revenue Service codes do not directly address falsified expense reports. However, Raphael Tulino, an IRS spokesman for Southern California who said he could not comment on any specific case referred all questions to Internal Revenue Code Section 61 (a), which states that gross income includes all revenue, “whatever source derived.” For tax purposes, any difference between actual expenses incurred by Smilie and the amount the AMA reimbursed him for could be construed as income. The IRS takes a broad view of “income,” as Al Capone found out when he was convicted on tax evasion charges for not reporting the income from his vast criminal empire. More, in the form of an official statement issued by the Montana Department of Revenue, in response to a query from Roadracingworld.com: The Montana Department of Revenue cannot comment on any individual taxpayer situation pursuant to 15-30-303 Montana Codes Annotated, and our comments should not be construed as applying to any specific taxpayer situation. The rules for expense reimbursement in general are such that, if an expense reimbursement exceeded the actual allowable expense, the excess might constitute taxable income to taxpayer. From there, the tax consequences to the taxpayer, if any, would depend on the circumstances of income, deductions, and a host of other variables including what was reported and how it was reported. We are not making any determination of whether there were or were not reimbursements, allowable expenses or reporting requirements for any taxpayer. We cannot comment any further than this because of individual taxpayer confidentiality and the variations between taxpayer situations.