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Tax Crimes and Why Employers Should Be Concerned

For the May/June edition of Cityview Magazine, I wrote an article entitled "Tax Crimes and Why Employers Should be Concerned." A copy of the article can be found here: http://www.cityviewmag.com/2014_03/#p=136

The text of the article is duplicated below:

In 2013, the Internal Revenue Service launched over 5,300 criminal tax investigations of individuals and companies suspected of breaking one or more federal criminal tax statutes. While the majority of the IRS is focused on collecting money, the Criminal Investigation Division (CID) of the IRS spends its time and resources investigating suspected tax evaders. Locally, the Tennessee Department of Revenue also investigates Tennessee residents and companies who may have violated Tennessee's criminal tax statutes. An increasing number of these investigations are targeting small business owners.

Many people often associate tax evaders with persons who are tax protesters or famous celebrities. The reality though is that the majority of tax prosecutions will be against "regular" people who are neither famous nor actively flaunting their disagreement with American tax laws.

For a federal criminal case, the prosecution must prove 3 things:

1. Tax Liability or Tax Deficiency: The actual existence of a due and outstanding liability must exist in order for the IRS to prove that a taxpayer attempted to avoid the assessment and/or payment of his/her tax.
2. Affirmative Act: The actual completion of a voluntary and intentional act in order to avoid one's known legal income tax responsibility including the assessment and/or the payment of a tax.
3. Intent / Willfulness: Any effort or attempt to avoid the assessment and/or payment of a tax. Examples of acts which may constitute criminal intent in this regard may include:


  • Filing a false tax return

  • Creating false records such as invoices and receipts

  • Deliberately destroying records

  • Making false statements to an IRS agent

  • Claiming false deductions

  • Concealing bank accounts and/or assets

  • Cash structuring

While there is no such things as a "debtor's prison" in the U.S., an emerging trend in tax prosecutions is indicting business taxpayers who have taken affirmative action to avoid payment of payroll taxes. The Government views failure to provide payment for payroll taxes as theft, as the employer has taken money from an employee and failed to pay the withheld amounts to the IRS.

An example of this sort of prosecution occurred in the case of United States v. James and Theresa DeMuro. The DeMuros operated an engineering and surveying company out of New Jersey. The evidence at their trial showed that they withheld over a half million dollars from their employees' checks but failed to turn over this money to the IRS. They also had attempted to evade tax responsibilities by shutting down a different company in what the government believes was a strategy to evade payment of unpaid employment taxes for that entity. The convicted couple also withheld money from employees' checks for health insurance, retirement accounts, and child support, but they failed to provide these funds to the appropriate agencies or accounts.

After a jury found them guilty of willfully failing to pay employment taxes to the IRS, the DeMuros each received 44-month prison sentences and were ordered to pay restitution of $1,337,952.12 to the IRS.

Another emerging trend in tax prosecutions is the increase in prosecutions against staffing companies and PEO's (Professional Employment Organizations). These types of companies often handle the processing of payroll for their clients, who are usually small businesses. These staffing companies and PEO's are also required to pay over payroll taxes to the IRS, and when the companies do not satisfy this requirement, they too could face criminal prosecution.

A recent example of this trend involves Richard Whatley, who was the owner of multiple staffing companies in Utah. The prosecution contended that Whatley's actions in failing to turn over payroll taxes from 2001 to 2006 resulted in a loss of more than $2.3 million in tax revenue. Whatley ultimately entered into a plea agreement and was sentenced to 51 months in prison for willfully failing to pay employment taxes to the IRS. He was also ordered to pay a fine of $541,513.

As the IRS continues to increase collection efforts, business owners should be wary of any acts that could be perceived as efforts to evade reporting or paying employment-related taxes. Smart business practices would be to never use taxes withheld from an employee's check for any purpose other than its intended use. If a small business owner or other decision makers have already failed to turn over withheld employee funds, the owner and decision makers should immediately contact a qualified tax professional to take immediate steps to correct past mistakes and provide protection from the long arm of the law.

Norman McKellar is the founder of The McKellar Law Firm, PLLC and the winner of multiple Cityview Top Attorney awards. His practice primarily deals with IRS tax resolutions and federal criminal defense. More information on his law firm can be found at www.HelpingClients.com, or follow him on Twitter @McKellarLawFirm.


Breaking Bad and the Tax Consequences of Illegal Income

October 16, 2013, by The McKellar Law Firm, PLLC

As the hit show Breaking Bad comes to an end, Forbes ran an interesting article on the tax implications of illegal activities as it relates to the hit show.

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The author highlights a few problems that arise when conducting illegal transactions, including:

1. Illegal income is still considered taxable income by the IRS. Regardless of the legality of how the income was generated, the IRS still wants its piece of the pie.

2. Claiming expenses for an illegal business will typically result in an admission of participating in illegal activity, and the claimed expenses are most likely to be disallowed.

3. Money Laundering is a likely companion charge to tax evasion since most illegal income needs to be "washed," similar to Walter White's Car Wash in Breaking Bad.

4. If the person conducting the criminal action files a tax return but fails to disclose all his/her income, that person could be looking at a charge of filing a false tax return. If the alleged criminal does not file a tax return, then he/she may be dealing with a charge of failure to file a tax return.

5. Finally, if the alleged criminal decides to move his/her money offshore, he/she would be required to file an FBAR (Report of Foreign Bank and Financial Account). Violation of this requirement can carry a maximum civil penalty of $100,000 for each violation, and the criminal penalties can include a $500,000 fine and a maximum 10-year prison sentence.

Staffing Company Owner Sentenced to 51 Months in Prison for Failing to Pay Payroll Taxes

July 31, 2013, by The McKellar Law Firm, PLLC

A growing area of tax fraud is originating from staffing companies and PEO's (Professional Employer Organizations) who withhold taxes from their workers and fail to turn the withheld funds over to the IRS. A case earlier this month resulted in a former owner of such a company receiving a 51-month prison sentence for committing such a crime.

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Richard Whatley, who was once part owner and/or financial controller for three staffing companies located in Utah, was indicted in 2010 for five counts of willful failure to account for and pay over employment taxes for these businesses which were under his control from 2001 to 2006. Prosecutors alleged Whatley's infractions resulted in the loss of more than $2.3 million in tax revenue.

Whatley struck a plea deal in his case in which he accepted a sentence of 51 months in prison and a fine of $541,513 in exchange for a plea of guilty to one count of willful failure to account for or pay over taxes. Whatley admitted to prosecutors that while he did collect fourth quarter taxes from employees of one of his staffing companies in 2003, he did not turn over the money to the IRS. T

26 USC § 7203 states that any persons found to have willfully failed to account for or pay over taxes to the IRS are subject to a fine up to $25,000 for an individual or $100,000 for a corporation. The statute also declares that the individual, if convicted, will be charged with a felony and could face up to five years in prison.

To determine the meaning of "willfulness" one must turn to the case law of Cheek v. United States, 498 U.S. 192, 201 (1991), United States v. Pomponio, 429 U.S. 10, 12 (1976), and United States v. Bishop, 412 U.S. 346, 360 (1973). These cases determined willfulness to be defined as the "voluntary, intentional violation of a known legal duty." Courts do not require direct proof of willfulness. Instead, the court can infer by the behavior or acts of a defendant that his or her conduct had the effect of misleading or concealing the desired information from the government. Spies v. United States, 317 U.S. 492-499 (1943). This conduct includes any efforts by the defendant that the court infers had the intention to "place assets beyond the government's reach after a tax liability has been assessed." United States v. Mal, 942 F.2d 682, 687 (9th Cir. 1991).

This was not Whatley's first brush with law. He previously served 27 months in prison for mail fraud and interstate transportation of stolen funds. He completed probation for these crimes in November of 2003.

Detroit Pizza Restaurant Owner Indicted for Tax Fraud

July 29, 2013, by The McKellar Law Firm, PLLC

Detroit, Michigan, Pizza Restaurant owner Happy Asker is most likely unhappy after the Justice Department indicted him and several others earlier this month for federal tax violations related to his business, Happy's Pizza.

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Michigan-based Happy's Pizza grew into a thriving business with 100 franchises across six states. After a three-year investigation of the business, Happy along with Maher Bashi, Tom Yaldo, Arkan Summa and Tagrid Bashi are facing charges for multiple federal and tax offenses listed below:

• 3 counts of filing a false individual tax return for Happy
• 21 counts of aiding in the filing of false payroll tax returns for Happy and Maher;
• 23 counts of aiding in the filing of false payroll tax returns regarding specific Happy Pizza franchises for Yaldo
• 11 counts for aiding in the filing of false corporate tax returns in regards to specific Happy Pizza franchises for Happy and Bashi
• 1 count of obstructing the due administration of internal revenue laws for Happy and Bashi
• 1 count of obstruction for Summa and Bashi (charged together)
• 1 count of obstruction for Yaldo

The problems for Happy's Pizza originally came to light in 2010 when thirty DEA, ATF, and IRS agents infiltrated the company's corporate offices and seized all of the business and personal records. The company maintains they have completely cooperated with the authorities for the last three years, and asked the public not to pre-judge the situation. In a statement released by the company it stated that the IRS investigated all 100 of its franchisee restaurants and only found seven stores to have under-reported income (the government says there were nine stores). It further vowed to vigorously defend its founder.

Happy and his associates stand to face up to five years in prison and a $250,000 fine for the conspiracy charges; up to three years in prison and a $250,000 fine for each count of filing a false income tax return and aiding or assisting in filing a false return; and a maximum of three years in prison and a $250,000 fine for each count for obstruction.

Sources
Dept. of Justice Press Release, "Pizza Franchise Owner and Four Others Indicted for Tax Fraud," July 16, 2013

CBS Detroit, "Happy's Pizza Founder Will Fight Tax Charges," July 17, 2013

Search Warrant Executed by IRS & FBI for Knoxville-Based Pilot Flying J

April 16, 2013, by The McKellar Law Firm, PLLC

As most Americans stressed yesterday for what is commonly known as "Tax Day," locally-based Pilot Flying J was swarmed on Tax Day by approximately 30 federal and local agents while executing a search warrant at its Knoxville headquarters as part of an "ongoing investigation." Pilot CEO Jimmy Haslam, father of Tennessee Governor Bill Haslam, stated that Pilot is "cooperating fully with authorities."

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The IRS and the federal government have long been fans of moving forward with warrants, investigations, and indictments for higher profile individuals and companies near the dreaded April 15th tax filing deadline. Although this search warrant could have been executed on another day, April 15th is the most notable of tax dates, and it provides the IRS with an extra opportunity to remind the public at large that they are enforcing tax laws.

In a KnoxNews.com article, one Pilot worker commented on the IRS and FBI agents who were executing the search warrant by stating, "They didn't seem like they were on a witch hunt...They seemed like they knew what they were looking for." Oftentimes, when agents from the Criminal Investigation Division (CID) of the IRS show up, they have been investigating the case for a lengthy period of time. The Pilot worker was likely correct in that the IRS CID and FBI agents knew exactly what they wanted to obtain long before they entered the Pilot headquarters.

In fact, to obtain a search warrant, the federal government would have been required to present "probable cause" evidence to a judge that there had been a violation of federal law, which would allow for the issuance of a search warrant. However, the issuance and execution of a search warrant does not mean that Pilot Flying J and/or its officers have done anything wrong or illegal. Undoubtedly, Pilot will take swift action to have its attorneys begin (or possibly continue) their investigation and defense of the case.

UPDATE: Since the original posting of this blog, a second search warrant has been executed today, and federal agents are continuing their efforts at the Pilot Flying J headquarters in Knoxville, according to KnoxNews.com.

Sources and Additional Articles
KnoxNews.com
NBCSports.com
WBIR.com

Chicago Politician Faces Tax Evasion Charges While Arguing for a More Diverse Jury Pool

March 13, 2013, by The McKellar Law Firm, PLLC

William Beavers (pictured below), a former Chicago police officer and 7th Ward alderman, has been charged with tax evasion. Prosecutors allege that Beavers spent $226,000 of campaign money for his personal expenses over a three year period and never paid taxes on the funds. It is also alleged that in 2006 Beavers contributed $69,000 of campaign money to a city retirement fund which more than doubled his monthly pension. There are some grumblings that the prosecutors intend to show that Beavers gambled with a portion of the $226,000 at a casino in Hammond, Indiana.

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Beavers stated that the FBI is targeting him because he refused to wear a wire to help its investigation of Commissioner John Daley (brother of former Chicago Mayor Richard Daley). Beavers' defense maintains that the money from the campaign fund was a loan, and that some repayment has been made. Since the investigation started, Beavers amended his tax returns to reflect the income.

Judge James Zagel is presiding over the case. He advised Beavers that he can tell the jury that he amended his returns and repaid the campaign funds after learning that he was being investigated so long as he takes the stand to do so. Beavers has repeatedly stated that he will take the stand in his defense, and that he is not guilty of the charges levied against him.

Jury selection for Beavers' trial began on March 12, 2013 with controversy. Out of the fifty prospective jurors, none were African American. Because Beavers is African American, the defense has requested the pool be dismissed. The case is set to go to trial the week of March 18th, 2013. Should Beavers be convicted, he is facing a maximum penalty of three years in prison and a $250,000 fine for each count against him.

SOURCES
http://www.nbcchicago.com/blogs/ward-room/W-196782271.html
http://articles.chicagotribune.com/2013-03-12/news/ct-met-william-beavers-trial-0310-20130311_1_jury-selection-selection-process-jurors

Stephen Baldwin and Owner of YouPorn Facing Tax Evasion Charges

December 11, 2012, by The McKellar Law Firm, PLLC

As a criminal defense and tax attorney, I often deal with the intersection of those two areas of practice when handling tax evasion and tax fraud cases. Even though the number of tax prosecutions by the federal government has increased in recent years, the total number of criminal tax prosecutions are relatively few. For example, in 2010, there were approximately 1,250 tax fraud charges brought by the Department of Justice.

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With so few tax prosecutions each year, the types of criminal tax prosecutions usually focus on a few groups of people: celebrities or high profile people, tax protesters, and lately, those who have attempted to evade taxes by hiding assets outside the country. Of course, there are cases which don't fit into of the aforementioned categories, but two recent tax fraud cases show how tax authorities have targeted a few higher profile individuals. While the IRS and the Department of Justice are usually the lead agencies in the pursuit of tax fraud prosecutions, other agencies can also get involved.

Last week, actor Stephen Baldwin (who is looking very "Baldwin-esque" in the mugshot above) was arrested in New York for failure to file state income taxes for $350,000 in earnings from 2008-2010. Baldwin denies that he committed any crime, but acknowledges that his personal bankruptcy and other financial factors contributed to his inability to pay his taxes. Baldwin is scheduled to return to court on February 5, 2013.

Apparently, the U.S. is not the only government which pursues higher profile individuals, as Germany arrested Fabian Thylmann last week on suspicion of tax evasion. Although Thylmann may not be a household name to many, he is the owner of 2 of the world's top 110 websites, YouPorn and Pornhub. Thylmann was arrested in Belgium and will likely be extradited to Germany in the near future.

Florida Man Sentenced to Prison For Tax Evasion by Concealing Assets

September 23, 2012, by The McKellar Law Firm, PLLC

In an ordinary tax evasion case, the IRS focuses on prosecuting persons who evade taxes by either not filing tax returns or who choose to falsify income and expense information on tax returns. However, in the case of Florida resident Michael Murray, he was prosecuted for his efforts to evade payment of taxes that were legitimately owed. As a result of his actions, he was sentenced to one year and one day in Federal prison, three years of supervised release, and must pay $4.3 million in owed taxes.

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According to a press release from the Department of Justice, Michael Murray began evading taxes in 2001 when the IRS determined he had a tax debt of $889,520 for income he made in 1993. The IRS issued liens and levies against Murray's properties and companies. Instead of paying his tax debt, Murray diverted money and property for his personal use into other people's name. He also made false statements to the IRS about his assets and income. He then compounded his problems when he violated the levies the IRS had placed by writing checks to himself for his personal benefit. Murray was able to evade the IRS' collection efforts for ten years with these tactics. By that time his tax debt had become $4.3 million due to penalties and interest that accumulated.

The lesson to learn from Mr. Murray's case is that attempts to settle or reach payment agreements on IRS can be handled legitimately, or they can be handled the way which Mr. Murray chose to handle them. Programs like Offer in Compromise allow taxpayers an opportunity to settle back taxes if they qualify for the program.

Kentucky Minister Predicts Coming of Christ, While U.S. Govt. Predicts Conviction for Tax Evasion

I have often said that clients charged with tax crimes are my favorite clients because they often passionately believe that they are right in their beliefs. Sadly, they are often wrong, but they are at least acting with conviction. However, it is a rare case when a defendant can combine their own misguided beliefs on the tax laws with an incorrect prediction of the return of Jesus Christ. Such a defendant can be found in the form of Kentucky minister Ronald E. Weinland.

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Weinland was indicted on November 10, 2011, for attempting to evade taxes in excess of $350,000 for tax years 2004 - 2008. A copy of the Indictment can be found here. According to the Indictment, Weinland failed to file tax returns during these periods, he used church contributions for his personal use without reporting the funds as income, and he failed to file a Report of Foreign Bank (FBAR) regarding a bank account that he had in Switzerland. His trial is scheduled for this upcoming Monday, June 4, 2012.

In what would have been perhaps the most unique ground to ask for a continuance of a trial, Weinland predicted that Jesus Christ would return to the Earth on May 27, 2012. Unfortunately for Weinland, his trial is still scheduled to proceed next week. If convicted, he could face up to 5 years in prison, restitution, fines, and court costs for violating 26 U.S.C. 7201.

More information on Weinland can be found at this Fox TV station's website here.

Knoxville, Tennessee Couple Indicted for Tax Fraud and Filing False Claims for Refund

According to a press release by the U.S. Attorney's Office for the Eastern District of Tennessee, a grand jury has found probable cause to indict James and Beverly Beaver, both 67, for conspiracy to defraud the United States and by filing false claims for tax refunds. Mr. Beavers was formerly employed as a research director for an engineering institute at the University of Tennessee.

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According to the indictment, the Beavers filed a false 2008 tax return and false amended 2006 and 2007 tax returns, which were filed by their accountant Penny Jones, who is/was a partner in PMDD Services, LLC, an Idaho-based tax return preparation firm. The 2008 return claimed that the Beavers were entitled to a nearly $600,000 refund, and the amended tax returns allowed the Beavers to receive $193,056 and $202,625 in tax refunds. The accountant was then paid $59,405 for her services. The Beavers also allegedly tried to hide their assets from possible IRS collection by transferring real estate title for their personal residence and a store that they own to "nominee trusts."

The Beavers are being charged with these tax crimes in the Eastern District of Tennessee, while the accountant and others in her firm are being charged with various tax crimes in the Southern District of Florida. If convicted, each defendant faces a maximum potential sentence of 20 years in prison, a criminal fine up to $1 million, and possible restitution to the IRS.

Tennessee Man Pleads Guilty to Filing False Form 941 Quarterly Tax Return

Criminal defense attorneys who focus their practice on criminal tax matters will often deal with personal income tax fraud or evasion. However, prosecutions against business owners for criminal tax fraud is an ever-present threat for entrepreneurs.

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In a case that hits awfully close to home, the United States Attorney's Office for the Eastern District of Tennessee recently posted on its website that a local small business owner has pled guilty to filing a false quarterly tax return (Form 941), also known as an Employer's Quarterly Federal Tax Return. Stanley Veltkamp of White Pine, Tennessee was the co-owner of a local Marina in Jefferson County. According to his plea agreement, Veltkamp would pay a portion of his employees' wages in check and a portion in cash in order to have the marina avoid paying its Social Security and Medicare taxes to the United States. Mr. Veltkamp now faces up to three years in prison and a $250,000 fine.

Employers are required to accurately complete a Form 941 and submit it to the IRS each quarter to report its employee's wages. When this form is submitted, employers are to also include a payment consisting of the amount withheld from an employee's paycheck. Failure to comply with federal tax laws could lead to criminal prosecution.

IRS May Begin Blocking Delinquent Taxpayers from Leaving the U.S.

A Bill before the Senate titled "Transportation Research and Innovative Technology Act of 2012," (SB 1813 Sec. 40203), could give the IRS the power to revoke, limit, and/or deny passports to citizens that owe back taxes despite the fact that the IRS is not the entity that issues them.

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Senate is expected to pass Section 40304 of Senate Bill 1813 which will penalize those that owe the IRS more than $50,000, have a lien or levy in place, and are behind on payments by revoking, limiting, or denying passports until the debt is paid. The exceptions would be if someone has an Installment Agreement with the IRS and are making the payments on time or if an appeal has been initiated. There is no language that states exactly how delinquent the debt must be or how long a lien or levy must be in place before action can be taken against a citizen.

Relying on language found in the Passport Act of 1926 that states, "(a)n Act to regulate the issue and validity of passports, and for other purposes," (22 U.S.C. 211(a) et seq.), the new Bill will allow the Secretary to request a Secretary of State to revoke, limit, or deny passports to persons that meet the provisions of the Bill. Prior to revocation, a passport that has been previously issued can be limited to only allow return travel to the United States or a temporary, limited passport may be issued that will only allow return travel. Exceptions to revocation are emergency or humanitarian travel.

If this Bill passes the Senate and the House of Representatives, the action of revoking a passport will be carried out by an un-elected official. There is no provision that the taxpayer has to have a judgment against them for tax evasion or fraud. Further, there is no review or approval by Congress before action is taken, which raises "due process" concerns.

Senate Bill 1813 is currently before Senate and portions of it have already been passed. Should Section 40203 pass, it will take effect January 1, 2013.

IRS Considers Sharing Private Information With Law Enforcement in Effort to Thwart Tax Fraud

March 26, 2012, by The McKellar Law Firm, PLLC

As we approach the dreaded tax return filing season, the IRS is contemplating ways to crack down on those who would like to steal tax refunds. Reuters reports that in response to $130 million in stolen tax funds since last year, Florida Senator Bill Nelson has proposed new legislation that will allow the IRS to share tax return information with police. A pilot program in Tampa, Florida is being considered by the IRS due to the area being rampant with identity theft and tax refund fraud. The program would allow the IRS to share bogus tax return information with local law enforcement where fraud is suspected. Currently laws only allow the sharing of such information if the victim gives his or her permission.

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The law that currently prevents the IRS from sharing taxpayer information has been on the books since 1976 when Congress made it a crime to disclose this confidential information. Nina Olson, national taxpayer advocate for the IRS, cautions that while some sharing may be necessary in some cases, there is a possibility that unauthorized parties could gain access to it. She proposes a modification of the 1976 law to allow access to the information but only for law enforcement purposes.

Privacy concerns are the main antagonist of the proposed law and program. As of yet, no date has been set for the Tampa pilot program to begin. However, if the program is successful, one should expect an increase in the number of criminal prosecutions for tax fraud.

Convicted Tax Evader Demonstrates How Not to Properly Handle a Criminal Case

March 19, 2012, by The McKellar Law Firm, PLLC

Abraham Lincoln is credited with saying, "He who represents himself has a fool for a client." I too have often thought the same thing when I hear of people venturing into the dangerous waters of criminal defense without a skilled lawyer. One such person to venture into these dangerous waters is Hiram Dane, who was convicted on four counts of felony tax evasion in Utah.

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Up until 2 weeks ago, Dane had been on the lam for almost three years. In 2008, he was a pilot for SkyWest Airlines in Utah when he was arrested for four counts of felony tax evasion. The prosecution claimed that Dane failed to file tax returns for 2005 and 2006, and that he also falsified returns for other tax years.

Dane's case came to trial in 2009. He went pro se before the court during the morning session. He was due back in the afternoon but never showed. He was later convicted of tax evasion and failure to file a proper tax return. For close to three years, he has been on the run from authorities. In 2010, he registered a company called Bavarian Securities in Sanford, North Carolina. This act ultimately led to his arrest.

Dane made three mistakes that I hope no one else will make: 1) representing himself, 2) abandoning his defense in the midst of trial, and 3) fleeing. I can only imagine that Dane will receive no leniency from his sentencing judge upon his return to Utah, and he may face additional penalties and/or charges for fleeing and contempt of Court.

Johnson City Man Indicted for Evading Tennessee Sales Tax

December 12, 2011, by The McKellar Law Firm, PLLC

As any good criminal defense lawyer will tell you, evading tax responsibilities often leads to drastic consequences. As a prime example of such consequences, the Kingsport Times reports that Dean Stover of Johnson City, Tennessee was indicted on November 9, 2011 for four counts of evasion of sales tax in violation of Tenn. Code Ann. § 67-1-1440(d). According to the story, Mr. Stover purchased four vehicles and falsified records of his purchases resulting in $14,933.76 in unpaid sales tax.

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T.C.A. § 67-1-1440(d) makes it lawful for "any person to delay, hamper, hinder, impede, obstruct or thwart the state of Tennessee in the collection of any of its lawful revenue, or to deprive the state of the realization of such revenue at the time it is lawfully entitled thereto by any artifice, design, false weight or measure, stratagem, or by the falsification of any record, report or return required by law."

Mr. Stover is facing a maximum sentence of two years and possible fines of $3,000.00 for each count of tax evasion. He surrendered himself to authorities on November 21, 2011 and his bond was set at $20,000.00. Revenue Commissioner Robert H. Roberts vowed to aggressively pursue all individuals that attempt to defraud sales tax and offered this case as an example of those efforts.