Tennessee Department of Revenue

REVENUE INVESTIGATION LEADS TO ARREST OF COOKEVILLE
BUSINESSMAN ON SALES TAX EVASION CHARGES

NASHVILLE, Tenn. - On June 19, the Putnam County Sheriff's Office arrested Erich Wilhelm Reiser on sales tax evasion charges at his place of business. Reiser, 42, owns Cosmopolitan Grill, located at 931 Shipley Rd. in Cookeville, Tenn.

Reiser was indicted by the Putnam County Grand Jury on June 12, 2006. The indictment charged that Reiser unlawfully and knowingly evaded and defeated the sales tax due the state of Tennessee by failing to file sales tax returns for Cosmopolitan Grill, Inc., for the monthly periods of Sept. 1, 2003, through Sept. 30, 2004. These fraudulent actions resulted in Cosmopolitan Grill, Inc., failing to report $518,731.62 of taxable sales for the business and failing to remit $50,509.97 of the proper sales tax collected and due.

"Tennessee's tax structure depends on taxpayers voluntarily complying with the laws," said Commissioner Loren L. Chumley. "Taxpayers who collect but intentionally do not remit sales tax breach the public trust. This arrest underscores our commitment to collecting all taxes due the state of Tennessee."

A $30,000 bond was set. If convicted, Reiser could be sentenced to a maximum of two years in the state penitentiary and fined for his failure to remit sales tax collected. In addition, civil tax, interest, and penalties are due the state.

These cases are pursued criminally by the department in cooperation with local district attorneys general.

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 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.Tennessee.gov/revenue.