TAX NEWS - June 2010

Arkansas Tax: Stephen Walker indicted on tax evasion charges

The indictment was returned on May 26, 2010, and Stephen R. Walker of Hot Springs had his arraignment recently in Hot Springs, Arkansas.

According to the indictment, Walker is a real estate developer who owned and operated Renaissance Development, LLC, which later became Renaissance Holding Group, LLC. Both companies specialized in the development of retail shopping centers.

The indictment charges that Walker filed his 2004 federal individual income tax return with the Internal Revenue Service (IRS) in October 2006, approximately 1 and a half years late, which stated a tax liability of $46,863. To evade the payment of this tax liability, Walker diverted income he received from Renaissance Holding Group, LLC (Renaissance) during 2006 to a nominee bank account prior to the filing of his return. During 2004, 2005, and 2006 Walker set up his salary checks from his companies to appear as partner distributions to evade the assessment of tax on the money he received.

The indictment states that Walker did not file individual income tax returns with the IRS for 2005 or 2006. For the 2005 tax year Walker allegedly received approximately $309,831.96 in taxable income and owes the government approximately $89,243.55 in taxes. For 2006, Walker should have reported approximately $180,400 in taxable income, owing approximately $46,123.50 in taxes to the United States.

Additionally, the indictment charges that Walker withheld income taxes, social security, and Medicare from employees' paychecks, but never paid these taxes to the IRS. The indictment claims that Walker withheld over $122,000 in payroll taxes in 2005 and 2006 that he failed to turn over to the IRS.

This investigation was conducted by IRS Criminal Investigation. Assistant U.S. Attorney David A. Harris will represent the United States.