Keean: State needs to pursue crooks at all levels
A man, who we'll call Chuck Tatum, along with his wife, operate a small retail grocery establishment in southwestern Vermont. Their annual sales approximate one million dollars and, like most such stores, work on a very low gross margin. The Tatums employ four local residents on a full and part-time basis.
Not unlike many small business owners, the Tatums have much to worry about. One such worry, that sometimes borders on obsession, is the plethora of taxes that must be paid monthly, quarterly, and annually.
In the Tatums case, the taxes range from unemployment, to employee withholding for social security, Medicare, and income. In addition, there are the monthly sales taxes due for gasoline, liquor, tobacco, etc. And then, of course, at year's end, there is the filing of income taxes for the business and personal. The Tatums know all too well the ramifications of failing to file or just filing late — not an option.
And like many of us, they may have read about Jennifer Dwyer, a 50 year-old bookkeeper from St. Johnsbury, who according to a Feb. 10 article in VTDigger, pleaded guilty to one charge of wire fraud in federal court in Burlington.
According to Ellie French's piece in the Digger, the wire fraud charge stemmed from Dwyer, over a 10-year period, embezzling $2.2 million from her employer, Northeast Argricultural Sales, Inc, a long-time family-owned business located in Lyndonville.
The company's long track record of being in business together with community support will be the force that will enable it to weather what has occurred.
Dwyer's short-term future was decided by Federal Judge Christina Reiss who imposed a sentence of 51 months in prison and for Dwyer to make restitution of $85,000. And it is no secret that Dwyer will most likely be back home in two years or so, never to have to worry about approximately $800,000 in taxes, penalties, and interest she should have paid to the federal government and to the state of Vermont.
And here is the question, why were there no charges filed by either the IRS or the Vermont Department of Taxes when such a huge amount of income went unreported for 10 years?
To the uninitiated, funds obtained through embezzlement are taxable in the year stolen. The embezzler, whether caught or not, has a legal obligation to report the amount taken as "ill-gotten gains." For obvious reasons most do not report. The taxing authorities have a duty to go after those who are found guilty of ill-gotten gains. It makes no difference whether the funds were obtained from embezzlement, selling illegal drugs, or misleading EB-5 investors out of hundreds of millions of dollars.
The authorities are quick to send late notices or worse, threats of confiscation and liens to the Chuck Tatums of this state, but when it comes to the those who have gained so much from illegal activity, not a word is mentioned.
Just to reinforce the above, this writer called upon the United States Attorney's office in Burlington for comment. The Assistant U.S. Attorney who prosecuted this case told me that the taxes are an issue for the IRS to decide on what action will be taken. A call was made to the Vermont Attorney General's office for comment — none was received.
The tax collection systems in the United States — federal, state, and local — are truly amazing for their complexity, inequities, and are, in some areas, illogical. And yet, collectively, they allow governments to collect trillions of dollars each year - mostly by voluntary self-declaration reporting by the taxpayer.
It is quite demoralizing to honest taxpayers to constantly hear and read about how embezzlers can obtain $20,000 or $2,000,000 illegally and get off tax-free. It is time for the authorities to stop worrying about the Tatums and go after the Dwyers of this state and country.
Don Keelan writes a regular
column for the Journal.
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