It is no secret that the economy is recovering from a major slump. Small business owners as well as individuals have felt the pocketbook pinch. When it comes to taxes however, a slow economy is no excuse for non-payment of taxes according to either the Internal Revenue Service or the Minnesota Department of Revenue.
It is possible to work with either the IRS or the Department of Revenue and develop a repayment plan or offer in compromise for any back taxes owed. However, failure to pay has consequences. It was recently reported that a Prior Lake small business owner has been charged with tax evasion for failure to pay sales taxes owed to the Department of Revenue.
The 36-year-old business owner in question owns the Basement Bar and Grill in Prior Lake. Located off Highway 13 just blocks from the lake, the Basement Bar and Grill had great entertainment and bar specials but the food wasn't great, according to online customer reviews. The website says the bar and grill is now closed.
The 36-year-old owner from Lakeville has been charged with six felonies for failure to pay $274,000 in sales tax and other tax issues in 2008, 2009, 2010 and 2011. Specifically his charges are two counts of failing to file returns, two counts of failing to pay taxes and two counts of filing fraudulent returns.
The fraudulent returns are the ones for the tax years 2008 and 2009, which would have been at the beginning of the economic slowdown. Had the business owner reached out to the Department of Revenue at that time, it may have made a difference. As it stands now, the 36-year-old is facing five years in prison and a $10,000 fine.
Source: Star Tribune, "Prior Lake bar owner charged with tax evasion," Susan Feyder, Nov. 14, 2012
- At our Minneapolis law firm we represent clients with the full range of tax liability issues with either the IRS or the Minnesota Department of Revenue.