Consequences for Failing to File Taxes

Consequences for Failing to File Taxes
This past week, Michael Flore, the owner of The Arena in Ann Arbor, Michigan, was sentenced to two to five years in prison because he has failed to file taxes for more than ten years. He was charged with 120 counts of failure to file taxes and will have to pay more than $1.5 million in restitution. That is more than double of what he should have paid.

Given A Chance

The problem was that the state gave Flore, 43, a chance to make up part what he owed. He pleaded guilty last July and the state gave an 11-month delay in sentence so that he could pay toward his past due and pay what he currently owed on sales tax obligations.

What that meant is that Flore had to pay $8,000 a month on the arrearage, plus stay current on his sales tax obligations. Flores did make an initial payment of $100,000, and made seven of the $8,000 payments. When he missed a few, his attorney said that was “the kiss of death” for Flores.

If Flores had made all 11 payments, he would have been dismissed of 115 of the 120 counts. His sentence would have been probation for the five counts. Because he failed to follow through with what was asked of him, he will now be facing his prison sentence.

Featured on “Bar Rescue”

The Ann Arbor sports bar had been featured on season 4 of Bar Rescue in November 2015. While it might be embarrassing for an owner to feature their bar on the show, they did find that they grossed $220,000 in food and beverage sales within the first six weeks after the show had been launched.

It was in 2013 when the State of Michigan Department of Treasury opened an investigation into the bar. This was for failure to pay sales taxes for the last ten years. What the investigation found is that while Flores was charging his customers sales tax, he failed to ever pay it back to the state.

Flore was found to have failed to pay tax on over 9 million dollars. That resulted in having to pay $700,000 in back taxes, and an additional 100 percent penalty for fraud, plus interest. His total restitution owed to the state would have been $1,508,214 according to The Detroit News.

The Detroit News reports that “Bar Rescue” host, Jon Taffer, has saved more than 800 bars and nightclubs from ruin in his 30-plus years as a consultant. However, he couldn’t save Brian Michael Flore, owner of The Arena in downtown Ann Arbor, from himself.

Flores had within his power to avoid prison time and was unable to. When it comes to taxes, it might seem like one is getting away without paying, but it will always seem to catch up to them. No one should have to go to prison for not paying taxes.

Seek Legal Advice for Failure to File Taxes

If you are in a similar position as Flores, have failed to pay your taxes for many years, and are under investigation, seek legal advice immediately. There are many options for you and prison should not have to be one of them. Call us today.

248-348-7400 or 586-530-1000