2006 News Releases
For Immediate Release: January 10, 2006
TWO SHELBY COUNTY BUSINESS OWNERS ARRESTED FOR VIOLATIONS OF STATE'S REVENUE LAWS
DAVID R. THOMAS AND HOWARD REED ARRESTED ON SALES TAX EVASION CHARGES
NASHVILLE, Tenn. - The Tennessee Department of Revenue's Special Investigations Section conducted the investigations that led to the indictments and arrests of two Shelby County business owners. Today David R. Thomas, owner of Thomas Auto Sales, located at 3718 Summer Ave. in Memphis, Tenn., was arrested on sales tax evasion and theft charges. On Jan. 9, Howard Reed, owner of The Final Detail, Inc., which was located at 8592 Ricky Bell Cove in Cordova, Tenn., was arrested on sales tax evasion and theft charges.
"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."
Background on Thomas
The Shelby County Grand Jury indicted Thomas on Jan. 5, 2006, on three Class E Felony counts of sales tax evasion and one Class C Felony count of theft of property over $10,000. The indictment charged that Thomas evaded the sales tax due the state by filing false and fraudulent monthly sales tax returns, failed to remit sales tax collected to the state, and hindered the state by failing to provide all records of sales. The criminal case against Thomas covers an 11-month period from Jan. 1, 2002, through Nov. 30, 2002. These acts were in violation of Tenn. Code Ann. Sections 67-1-1440 and 39-14-103.
A $5,000 bond was set for Thomas. If convicted, Thomas could be sentenced to a maximum of two years in the state penitentiary and fined $3,000 for each Class E Felony count of sales tax evasion and to a maximum of four years in the state penitentiary and fined $10,000 for the Class C Felony theft count. Additionally, civil taxes, penalties, and interest will be due the state once the criminal case concludes.
Background on Reed
Reed was indicted by the Shelby County Grand Jury on Jan. 5, 2006, on three counts of sales tax evasion, a violation of Tenn. Code Ann. Section 67-1-1440(g). The first count of the indictment charged that Reed intentionally failed to register with the state. The second count charged Reed failed to file state sales tax returns, and the third count charged that Reed failed to remit state sales taxes collected from his customers. Reed was also indicted on one count of theft over $10,000, a violation of Tenn. Code Ann. Section 39-14-103. The criminal case against Reed covers a 21-month period from Jan. 1, 2002, through Sept. 30, 2003.
A $5,000 bond was set for Reed. If convicted, he could be sentenced to a maximum of two years in the state penitentiary and fined $3,000 for each Class E Felony count of sales tax evasion and to a maximum of four years in the state penitentiary and fined $10,000 for the Class C Felony theft count. Additionally, civil taxes, penalties, and interest will be due the state once the criminal case concludes.
The department pursues criminal cases in cooperation with local district attorneys general.
Chumley encourages all citizens who suspect violation of the Tennessee revenue laws to 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 2004-2005 fiscal year, the department collected $9.6 billion in state taxes and fees. In addition to collecting state taxes, $1.7 billion of local sales tax was collected by the department for local governments during the 2004-2005 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.TN.gov./revenue
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