Eugene, Ore. – Kenneth L. Anderson, 63, and Dorothy S. Anderson, 61, of Central Point, Oregon, were sentenced today by U.S. Magistrate Judge Thomas M. Coffin to 14 months in prison to be followed by one year of supervised release. In June 2009, the Andersons each pleaded guilty to two counts of willfully failing to file federal income tax returns for the calendar years 2004 and 2005. The Andersons were ordered to pay over $400,000 in back taxes to the IRS and they must file delinquent tax returns.
According to the government’s sentencing memorandum, the Andersons have sold Mannatech Inc. health care supplements, both individually and through their corporation, AGK Services, since 1994. Between 2002 and 2005, the Andersons earned more than $1.3 million in commissions, yet failed to file either federal individual or corporate tax returns. In fact, the Andersons have not filed a federal tax return since 1987. In response to contacts by the IRS to settle their tax responsibilities, Kenneth Anderson responded with frivolous letters, failed to respond to IRS letters, and failed to appear for scheduled meetings with the IRS. In short, the Andersons simply refused to work with the IRS.
Quoting from the government’s memorandum, “Each year millions of hard-working Americans take time out of their lives to . . . (file) federal tax returns. They do so because they know that the privileges and benefits of living in the United States come with responsibilities and obligations of citizenship. Justice (Oliver Wendell) Holmes said it best: ‘Taxes are what we pay for a civilized society.’ . . . [T]he defendants[] want and take advantage of the benefits and privileges of citizenship in this country without paying their fair share.”
“Tax crimes are not victimless,” said Kenneth J. Hines, the IRS Special Agent in Charge of the Pacific Northwest. “Failing to file your income tax return is not just failing to meet your obligation under the law, it is against the law.”
This investigation was conducted by the Internal Revenue Service - Criminal Investigation. The case was prosecuted by Assistant U.S. Attorney Scott E. Bradford.
