Business Owner Indicted for $1.2 Million Tax Fraud

 

KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced today that the owner of an Independence, Mo., business has been indicted by a federal grand jury for failing to report more than $1.2 million in business income on her income tax returns.

Peggy Hennon, 55, of Independence, was charged in a four-count indictment returned under seal by a federal grand jury in Kansas City, Mo., on Tuesday, Dec. 10, 2013. That indictment was unsealed and made public today upon Hennon’s arrest and initial court appearance.

Hennon was the owner of Peggy’s Tow. The federal indictment alleges that Hennon under-reported the gross receipts from her business from 2007 to 2009 in order to significantly reduce her income tax liability by approximately $308,368.

Peggy’s Tow purchased vehicles as scrap and sold them to scrap yards in the Kansas City metro area. After the vehicles were sold to the scrap yard, Hennon either deposited the check into one of her checking accounts or cashed the check at a gas station or bank.

According to the indictment, Hennon reported only part of her gross receipts on her 2007, 2008, and 2009 individual income tax returns. Hennon allegedly cashed the majority of checks she received from the sale of scrap vehicles (25 percent of the checks in 2007, 68 percent in 2008 and 98 percent in 2009). Hennon allegedly failed to include approximately $1,232,363 from the cashed checks on her tax returns for the 2007, 2008, and 2009 tax years.

Hennon is charged with three counts of making false statements on income tax returns. Hennon is also charged with attempting to interfere with the administration of internal revenue laws.

According to the indictment, Hennon provided expense records to IRS agents on three separate occasions in 2012 and 2013. Hennon allegedly provided false expense records to the IRS agents that had been altered to reflect higher business costs than the expense records that were used by her accountant to calculate expenses on her tax returns for 2008 and 2009. The majority of the alterations, the indictment says, involve a price which contained a “1” that was changed to a “4.”

The increased expenses of approximately $414,725 for tax years 2008 and 2009 would have reduced the amount of taxes due and owing by Hennon in the amount of approximately $163,857.

Dickinson cautioned that the charges contained in this indictment are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.

This case is being prosecuted by Assistant U.S. Attorney Roseann Ketchmark. It was investigated by IRS-Criminal Investigation Missouri Dept. of Revenue and the Missouri State Highway Patrol.