Former Minneapolis Restaurant Owner Evaded over $150K in Income Tax

Published On: 7th April 2015

From the internet

A total of 68 counts of tax fraud have been filed against a Minneapolis restaurant owner for avoiding paying his income tax.

According to the complaint, the man failed to report over $1 million in income over three years. It was the Minnesota Department of Revenue that discovered the fraud. A Hennepin County Attorney said that it is not uncommon for restaurant owners to not be able to pay all of their tax bills.

He said there are many times when a cash-flow situation presents itself, but that usually means agents will work out a repayment plan that works for the restaurant owner. When individuals are in situations like that, they are not charged with a crime because they are making an effort to pay their tax bills. But when a person simply makes no effort at all and they avoid paying their taxes, then criminal charges result.

In this case, the man filed fake sales tax returns for 2009 all the way through most of 2011, according to the complaint. Income from the restaurant was reported, but it was underreported. It was not that the restaurant was in financial strain, as what is commonly seen when restaurants underreport their income, but it was that the owner simply did not report and it was allegedly on purpose.

The man has no prior criminal record. He was never taken into custody because it is not believed to be a flight risk. The defendant maintains that he has not been formally informed of any charges against him for tax fraud, so he has not gotten a lawyer to start working on his case.

In July 2014 when the restaurant went dark, it was on the restaurant’s Facebook page that the landlord terminated their lease and that was why they were going to have to close. In the statement, it was said that the restaurant had “absolutely no control over this situation.” It went on to thank patrons for their business over the past 9 years, but that good things must come to an end. The restaurant, which was an existing establishment, was taken over by the man’s company in 2006

If the man is found guilty, he will need to pay over $170,000 in taxes, interest, and penalties. The crime is also punishable by a $10,000 fine an up to five years in prison.

This is the time of year in which tax fraud cases do start to come to light and the IRS and other authorities will pursue such cases aggressively in order to recover the unpaid taxes, penalties, and interest.

 

http://www.mprnews.org/story/2014/10/15/tax-fraud

http://www.bizjournals.com/twincities/news/2014/10/15/michael-whitelaw-social-house-tax-charges.html?page=all