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California Tax: Watsonville couple are among state's largest sales tax delinquents

by ALIA WILSON, 01 June 2022 -- The California State Board of Equalization announced last week Larry and Patricia Stenshoel of Watsonville were added to the updated list of California's largest unpaid sales and use tax delinquencies.

The board replaced 19 names on its list of debtors. Those added to the list have delinquencies totaling $28 million in sales tax owed, according to the state tax board.

Larry Stenshoel, 76, and his wife, Patricia, 72, operated the Cade Co., a San Jose waterproofing business, where they charged and collected sales tax from customers without properly paying the tax to the board. The couple failed to report and pay more than $430,000 in sales tax from October 1996 to December 1997 and more than $60,000 in state income taxes between 1994 and 1996.

The Stenshoels fled California after charges were filed against them in April 2001, according to the state tax board. Larry Stenshoel was extradited from Texas in June 2005, and Patricia Stenshoel later surrendered to authorities in February 2006. Both were convicted of two felony counts of sales tax evasion, three felony counts of state income tax evasion, and one count of grand theft.

On Aug. 4, 2006, Larry Stenshoel was sentenced to two years in state prison. Patricia Stenshoel was sentenced to three years probation and 1,440 hours of community service, according to the state tax board. Additionally, Larry and Patricia Stenshoel were ordered to pay remaining restitution of $544,834 to the Board of Equalization and $264,246 to the Franchise Tax Board.

They had initially paid $500,000 toward their tax debt. The case was prosecuted by the Santa Clara County District Attorney's Office.

For a complete list of the largest sales tax debtors, visit California State Board of Equalization website.

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