Federal Court Orders Delaware Donut Business and Its Owner to Pay Federal Payroll Taxes on Time

A federal court has ordered Chel-C Ventures Inc., which operated Donut Connection stores in Milford, Georgetown, and Harbeson, Delaware, to file its federal payroll tax returns on time and pay federal payroll taxes as they become due, the Justice Department announced.  Although Chel-C Ventures has said that it closed the stores after the United States filed its civil complaint in this case, the court’s order directs Chel-C Ventures and its owner, Elva Davidson of Sussex County, Delaware, to file the returns and pay the taxes on time if the business starts operating again.  The injunction is effective immediately.

According to the United States’ civil complaint in the case, Chel-C Ventures repeatedly failed over a period of years to fully pay its payroll taxes.  The court’s order also determined that Chel-C Ventures was liable for more than $645,000 in federal payroll taxes, penalties and interest and that Davidson was personally liable to the United States for more than $250,000.  Chel-C Ventures and Davidson agreed to entry of the court’s order, but did not admit to the allegations in the United States’ civil complaint in the case.

Acting Assistant Attorney General Caroline D. Ciraolo of the Tax Division thanked the revenue officer of Internal Revenue Service’s Field Collection for investigating and preparing the civil case.

Additional information about the Tax Division and its enforcement efforts may be found on the Division’s website.