Unpaid Taxes Could Mean Prison

by | Oct 15, 2018 | Cracking the Tax Code with Christy | 0 comments

A well-known couple  from Klawock, Alaska, have both been sentenced to 12 months in Juneau’s federal prison for failing to pay federal taxes incurred for income derived from  commercial fishing. In May 2018, Roseann Demmert, and Archie Demmert III settled on a plea deal, including restitution of taxes unpaid from years 2011-2014 totaling $145,220.

For ten years previously, the Demmerts had avoided IRS collection attempts on substantial tax debt while the coupled gambled and traveled. In 2011, Roseann Demmert won more than $20,000 in gambling but failed to pay anything toward the couple’s tax debt. The statute of limitations eventually ran, and the IRS had to write off the Demmerts’ tax liability of $239,648.

In 2013, the couple agreed to pay $80,000 in settlement of their tax debt.  Instead, Demmert removed $84,000 from their joint bank account, telling the teller that he “was preventing the IRS from taking his money.” Demmert then informed the IRS that he and his wife could not pay the tax.  A year later, in the spring of 2014, the IRS noticed the couple of tax liability and penalties totaling $584,000.  Rather than clear any of the debt, the couple expended around $56,000 on personal bills, travel, and gambling.

The couple now sit in a federal prison for tax evasion.  According to the sentencing memo, they have not indicated their intention to file tax returns or pay taxes  for the years from 2015 to 2018.