The IRS is not the only sheriff in town. State revenue departments are getting increasingly aggressive against individuals and businesses they believe are cheating on taxes. This is especially true if the taxes are considered trust fund taxes – sales and withholding taxes.
According to a prepared statement from the Indiana Attorney General’s Office, a state court judge ordered Dave Evans and Dave Evans Tire Inc of Kokomo, Indiana to shut down until resolution of a claim of $550,932 for unpaid taxes. As of this writing, Evans has not been criminally charged.
Prosecutors say that customers paid sales taxes and disposal fees on tire sales to Evans but Evans never turned those monies over to the Indiana Department of Revenue. Likewise, Evans is alleged to have withheld taxes from his employee’s paychecks but never turned those monies over either. If true, Evans can still face felony tax charges such as tax evasion.
According to published press reports, Evans said, “I have had difficulties concerning tax payments for some time, and have been working with the department of revenue to resolve them. I am determined to do the right thing…”
Unfortunately, in our experience it is very difficult for a business to bounce back after being shut down by the state. Both customers and vendors become leery. (The attorney general says that it is making arrangements for customers to retrieve vehicles left for servicing.)
In a prepared statement, Indiana Attorney General Greg Zoeller said, “When consumers make purchases and are charged sales tax it is required that the tax money be remitted to the state. When employees have their taxes withheld on their paychecks it is also required that this be remitted to the state. We support small business and private enterprise, but when an individual reduces his overhead through tax evasion, it undercuts other law-abiding competitors who play by the rules…”
Businesses that find themselves over their head should seek the services of an experienced tax attorney immediately. Quick intervention usually means not having to worry about tax evasion or other criminal charges. It often means keeping the business doors open as well.
Whistleblower Rewards for Unpaid State Sales Tax
Although the IRS pays whistleblowers cash rewards for reporting tax cheats, the overwhelming majority of states do not. Presently only Illinois, New York and the District of Columbia have a state false claims act that pays rewards for sales and other state taxes. (Michigan and California are considering expanding their existing whistleblower reward programs to include taxes.)
Companies that underpay or avoid paying state and local sales taxes cost taxpayers billions of dollars each year. If you select have inside (non-public) information on the intentional underpayment or underreporting of sales tax on New York, Illinois, Nevada or Washington D.C., you may have an opportunity to recover to collect a significant cash reward for uncovering the fraud.
Our tax whistleblower team includes a former state revenue (tax) commissioner, IRS special agent, state tax prosecutor and revenue officer. We offer a full range of IRS and select state whistleblower services. More importantly, we offer our years of experience in investigating and prosecuting these cases. For more information, contact us online, by email or by phone at 202.800.9791.
All inquiries are kept in strict confidence and protected by the attorney-client privilege. We accept IRS whistleblower cases worldwide, state tax whistleblower services in New York, Illinois, Nevada or Washington.
Mahany Law – America’s Tax Whistleblower Lawyers