The report said the government claims Thorpe needs to pay back taxes over a three-year span covering 2002-04.
Thorpe, 59, of Heathrow, Fla., faces four counts of failing to file an income tax return and three counts of failing to pay income taxes, charges which could land him a seven-year federal prison sentence and a fine of up to $3.2 million.
"We look forward to having a trial," Thorpe's lawyer, Mark Horwitz, told the newspaper. "We don't think he's willfully violated the law. That's not to say he doesn't owe the tax, but we don't think he's guilty of a crime."
The government's complaint said Thorpe also earned money from several endorsements, received at least $1.7 million in gambling winnings, and failed to make estimated tax payments against his accountant's advice.
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