Knox County Business Owner Arrested for Sales Tax Evasion and Theft

KNOXVILLE, Tenn. - Kenny Cecil Owen, owner of Micko’s at 5210 Shubert Road, Knoxville, Tenn., was arrested on Nov. 15 by Special Agents of the Tennessee Department of Revenue after the Knox County grand jury returned a 31-count indictment relating to evasion of sales tax due the State of Tennessee.  Bond was set at $10,000. The investigation was conducted by the Special Investigations Section of the Tennessee Department of Revenue.

On Oct. 31, 2007, the Knox County Grand Jury returned true bills for thirty Class E felony counts of Sales Tax Evasion in violation of Tenn. Code Ann. 67-1-1440(g) and one Class D felony count of Theft Over $10,000 in violation of Tenn. Code Ann. 39-14-103. The indictments charge Owen, age 67, with failing to report taxable sales totaling $329,143.21 and failing to remit collected sales tax totaling $30,435.54 from Jan. 1, 2003 through June 30, 2005.

“Tennessee’s tax structure depends on taxpayers voluntarily complying with the laws,” said Revenue Commissioner Reagan Farr. “Taxpayers who collect but intentionally do not remit sales tax breach the public’s trust. This arrest underscores our commitment to collecting all taxes due the state of Tennessee.”

If convicted, Owen could be sentenced to a maximum of two years in the state penitentiary and fined $3,000 for each Class E felony count. The Class D felony charge carries a maximum of four years in the state penitentiary and a fine of $5,000. Additionally, civil taxes, penalties and interest will be due the state.

This case was pursued criminally by the department in cooperation with District Attorney General Randall Nichols’ Office. Citizens who suspect violations of Tennessee’s revenue laws should call the toll-free tax fraud hot line at (800) FRAUDTX (372-8389).

The Department of Revenue is responsible for the administration of state tax laws and motor vehicle title and registration laws established by the legislature and the collection of taxes and fees associated with those laws. The Department of Revenue collects approximately 92 percent of total state tax revenue. During the 2006-2007 fiscal year, the department collected $11 billion in state taxes and fees. In addition to collecting state taxes, $1.9 billion of local sales tax was collected by the department for local governments during the 2006-2007 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.