VANCOUVER, WASHINGTON, HOTEL AND RENTAL PROPERTY OWNER SENTENCED TO FIVE YEARS IN PRISON FOR TAX EVASION
THOMAS D. WEATHERS, 54, of Vancouver, Washington, was sentenced today to 60 months in prison for evading payment of their 1996 federal income tax and for failing to file tax returns for the years 1998 through 2002. WEATHERS and his wife, KATHY J. WEATHERS, were convicted in June 2005, following a six day jury trial. The sentence was handed down by U.S. District Judge Franklin D. Burgess.
The government investigation revealed that the WEATHERS received substantial income from the operation of three hotels in Portland, Oregon, two motels in Longview, Washington, and other rental properties throughout Southwest Washington. In October 1997, the WEATHERS filed with the Internal Revenue Service a joint U.S. Individual Income Tax Form 1040 for the tax year 1996, and reported to the IRS that they owed $103,419 in income and self-employment taxes. The WEATHERS, however, did not pay the more than $103,000 in self-reported tax. The WEATHERS also ceased filing any subsequent income tax returns despite yearly reported gross receipts from their hotel properties in excess of $1 million per year.
Rather than pay any income tax, the WEATHERS engaged in a series of acts designed to evade payment of tax. The WEATHERS submitted false statements to the IRS declaring they earned zero income. The WEATHERS also attempted to hide assets and income from the IRS by setting up shell-corporations and placing all of their bank accounts and other assets, such as vehicles, in the names of such corporations. During the years the WEATHERS evaded tax, they spent hundreds of thousands of dollars on purchasing new cars, an airplane, foreign trips, home remodeling, private school tuition, and opening investment trading accounts. The WEATHERS also sent money to accounts overseas.
During the course of the investigation, the WEATHERS filed documents with Clark County declaring their independence from the United States and rejecting any obligation to conform to the federal laws. THOMAS WEATHERS also threatened an IRS criminal investigative agent that the agent would be subject to involuntary bankruptcy if he continued to use THOMAS WEATHERS's name. THOMAS WEATHERS declared in one document sent to the IRS that he was a "Sovereign without subjects, ...a Foreign Nation (not a person) who rules autonomously and is not subject to any entity or jurisdiction anywhere."
"All Americans have a duty to pay their fair share when it comes to federal income taxes," said Sherree W. Preston, IRS Special Agent in Charge for Washington. "Fortunately for our country, the majority of American taxpayers file timely, accurate income tax returns and pay the resulting taxes. Anyone who does otherwise victimizes us all."
Using a conservative calculation the government believes the WEATHERS owe more than $1.6 million in back taxes. In addition they must pay interest and the cost of prosecution. The cost of prosecution is an estimated $25,000.
This case was investigated by the Criminal Investigation Division of the Internal Revenue Service. Assistant United States Attorneys Katheryn Kim Frierson and Kurt P. Hermanns prosecuted the case. For more information, please contact Emily Langlie, Public Affairs Officer for the United States Attorney's Office, Western District of Washington, at (206) 553-4110.