REVENUE INVESTIGATION LEADS TO ARREST OF CHATTANOOGA
BUSINESSMAN ON SALES TAX EVASION CHARGES
NASHVILLE, Tenn. - Today special agents of the Tennessee Department of Revenue arrested Donald Lee Phipps on sales tax evasion charges at his Hamilton County business. Phipps, 58, is the owner of Sam's Liquor Store, a retail liquor store, located at 2438 Rossville Blvd. in Chattanooga, Tenn.
"The Department of Revenue is committed to applying Tennessee's tax laws and policies uniformly to all taxpayers to ensure a level playing field," said Revenue Commissioner Loren L. Chumley. "The department cannot and will not allow people engaged in fraudulent tax activities to have a competitive advantage over honest businesspeople."
Phipps was indicted by the Hamilton County Grand Jury on March 28, 2005, on 31 counts of sales tax fraud and one count of theft. The indictment charged that Phipps unlawfully and knowingly evaded and defeated sales tax due the state of Tennessee by filing false sales tax returns for Sam's Liquor Store for the periods Dec. 1, 2000, through June 30, 2003. These fraudulent actions resulted in Sam's Liquor Store failing to report $392,704 of taxable sales for the business and failing to remit $33,732 of the proper sales tax collected and due. This is in violation of Tenn. Code Ann. Section 67-1-1440(g).
A $10,000 bond was set. If convicted, Phipps could be sentenced to a maximum of two years on each count in the state penitentiary and fined $3,000 for the 31 counts relating to his failure to remit sales tax collected and filing false returns. If convicted on theft of property, Phipps could be sentenced to a maximum of six years in prison and fined up to $10,000. In addition, civil tax, interest, and penalties are due the state.
Citizens who suspect violations of the Tennessee revenue laws should call the toll-free tax fraud hot line at (800) FRAUDTX (372-8389).
The Department of Revenue collects approximately 92 percent of total state tax revenue. During the 2003-2004 fiscal year, the department collected $9.1 billion in state taxes and fees. In addition to collecting state taxes, $1.6 billion of local sales tax was collected by the department for local governments during the 2003-2004 fiscal year. Besides collecting taxes, the department enforces the revenue laws fairly and impartially in an effort to encourage voluntary taxpayer compliance. The department also apportions revenue collections for distribution to the various state funds and local units of government. To learn more about the department, log on to www.Tennessee.gov/revenue.
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