Fairfax County police investigator William A. Luzi has pleaded guilty to two misdemeanor counts of filing false tax reports. When he made the pleas, three felony counts of income tax evasion against him were dropped.

The pleas came late Wednesday night while the government was presenting its case against Luzi, of 2304 Locust Ridge Ct. in Falls Church.

Attorney Brian Gettings, who represented Luzi, said the pleas mean that Luzi "misinformed the IRS as to the source" of $3,000 in income. Luzi and his family operate a service station on Lee Highway in Arlington. Income from the station was the focus of the government's case.

No sentencing date has been set. Luzi faces a maximum of two years in prison and a $2,000 fine.

Luzi, who is three years away from retirement from his Fairfax County job, was indicted by a federal grand jury in Alexandria April 2 on three counts of deliberately understating his income during 1972, 1973 and 1974 by $32,000.

If convicted of the felony counts, Luzi would have faced a maximum of 15 years in prison and a $30,000 fine. Pleading guilty to the two misdemeanors is expected to preserve his ability to remain on the police force and receive a pension when he retires, according to an Internal Revenue Service official.

U.S. Attorney William B. Cummings, who prosecuted the case, could not be reached for comment.