November 24, 2009
COUPLE SENTENCED TO FEDERAL PRISON FOR TAX EVASION AFTER FAILING TO PAY THE IRS OVER $200,000 IN TAXES
DENVER – David Yost, age 55, and Paula Yost, age 48, of Osage Beach, Missouri, were sentenced yesterday to federal prison sentences for tax evasion by U.S. District Court Judge Marcia S. Krieger, U.S. Attorney David M. Gaouette and IRS Criminal Investigation Denver Field Office Special Agent in Charge Christopher M. Sigerson, announced. David and Paula Yost were both sentenced to serve 18 months in federal prison, followed by 3 years on supervised release. They were also ordered to each pay a $200 Special Assessment to a general court victims of crime fund. They were ordered to report to a facility designated by the Bureau of Prisons on or before January 29, 2010. David and Paula Yost remain free on personal recognizance bonds pending their reporting to prison.
David and Paula Yost were indicted by a federal grand jury in Denver on December 3, 2007 on tax evasion charges. They both pled guilty on March 9, 2009. Their sentences were pronounced by Judge Krieger yesterday, November 23, 2009.
According to information contained in the Yost’s indictment and plea agreement, David Yost and Paula Yost were residents of Littleton, Colorado, from 1993 until 2002. Between 1988 and 2001, the Yosts operated plumbing businesses through various entities including: Dave’s Plumbing, a sole proprietorship, between at least 1988 and 1990; Dave’s Plumbing and Heating, a sole proprietorship, in Colorado, between at least 1993 and 1995; Payday Plumbing and Heating Services, Inc., a Colorado corporation, between at least 1995 and 1998; and Dave’s Plumbing and Heating Specialists, Inc. (“DPHS”), a Colorado corporation, between at least 1998 and September 27, 2001. The entities controlled by the Yosts employed individuals who were paid wages.
From approximately April 30, 1988 through January 31, 1991, the Yosts filed or caused to be filed twelve Employer's Quarterly Federal Tax Returns (Form 941) on behalf of Dave's Plumbing from the first quarter of 1998 through fourth quarter of 1990. For nine of these twelve quarters, the Yosts made no payments toward these employment tax liabilities. For the remaining three quarters, the Yosts paid only a small portion of the amount owed. The Yosts did willfully attempt to evade and defeat the payment of a large part of the federal employment tax due and owing, in an amount of approximately $99,488.36.
From approximately July 31, 1999 through at least October 31, 2001, the Yosts filed or caused to be filed eight Employer's Quarterly Federal Tax Returns (Form 941), on behalf of DPHS, for the second through fourth quarters of 1999, the second through fourth quarters of 2000, the second and third quarter of 2001 and one Employer's Annual Unemployment Tax Return (Form 940) for 2001, with the IRS. The Yosts did willfully attempt to evade and defeat the payment of a large part of the federal employment tax due and owing by DPHS, in an amount of approximately $87,847.63.
Additionally, on or about March 14, 2003, the Yosts filed with the IRS a joint U.S. Individual Income Tax Return (Form 1040) for tax year 2001 reporting only W-2 income from DPHS in the total amount of $4,600. The defendants did not list as income on this 2001 Form 1040 any of the money from the sale of DPHS that they spent on personal expenses. Accordingly, the defendants under reported his joint income for the tax year 2001 by approximately $231,132.59. After taking into account the adjustments to income, the defendants’ corrected joint taxable income for 2001 is $203,736.00, resulting in a tax due and owing for tax year 2001 of at least $24,820.
“Paying taxes is an essential part of our duty as citizens of this country,” said U.S. Attorney David Gaouette.
“Employers who commit Employment Tax Fraud by failing to remit withheld employment taxes are not only defrauding the IRS, they are creating financial havoc for their employees,” said Christopher M. Sigerson, Special Agent in Charge, IRS Criminal Investigation, Denver Field Office.
This case was investigated by the IRS Criminal Investigation.
The case was prosecuted by Assistant U.S. Attorney Pegeen Rhyne and U.S. Department of Justice Tax Division Attorney Monica B. Edelstein.
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