Kara Sears
Several companies in Baton Rouge, Louisiana, have been accused of breaking tax laws. Notably, a tax preparer was arrested for a fraud scheme involving ghost companies and phony business losses, resulting in felony fraud charges. In another case, International Mezzo Technologies, a North Baton Rouge company, received a tax break from the city but failed to meet the terms of the agreement. ExxonMobil has also faced scrutiny for allegedly being under-assessed on property taxes, with activists calling for higher tax evaluations. These instances highlight the complex nature of tax compliance and the potential for misuse by businesses.
| Characteristics | Values |
|---|---|
| Company Name | International Mezzo Technologies |
| Company Type | Manufacturing |
| Industry | Car parts for professional racers and NASA |
| Location | North Baton Rouge |
| Date | 2021-11-09 |
| Non-Compliance | Violating the terms of the 2019 contract under Louisiana's Industrial Tax Exemption Program (ITEP) |
| Action Taken | Metro Council will consider penalties against the company |
| Other Companies Involved | ExxonMobil, accused of underpayment of property taxes under ITEP |
| Individuals Involved | Mezzo President Kevin Kelly |
| Other Details | A tax preparer in Baton Rouge was also arrested for fraud involving "ghost" companies and phony business losses |
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What You'll Learn
Tax preparers charged with fraud
In Baton Rouge, Louisiana, several tax preparers have been charged with fraud, highlighting the importance of ethical practices in the tax industry. These individuals and businesses have been accused of engaging in deceptive practices to deceive clients and evade taxes.
One prominent case involves Joseph A. Gillies, a Baton Rouge tax preparer, who was arrested on felony fraud charges. Gillies was found to have prepared and submitted hundreds of tax returns with fabricated business losses for companies that did not always exist. From 2012 to 2015, his alleged fraud scheme cost Louisiana taxpayers an estimated $768,740. Gillies was charged with Principal to Filing or Maintaining False Public Records and Principal to Illegal Transmission of Monetary Funds, marking his second arrest on fraud charges.
In another instance, a Terrebonne Parish woman faced multiple felony charges for attempting to steal thousands of dollars in fraudulent state income tax refunds. This case underscores the financial threat posed by fraudulent activities in the tax industry.
Additionally, a Baton Rouge businessman was arrested for tax fraud and failing to provide unemployment insurance for his employees. Simultaneously, a Metairie business owner was suspected of pocketing state sales taxes, further emphasizing the diverse nature of tax fraud schemes.
International Mezzo Technologies, a North Baton Rouge company, also came under scrutiny for violating the terms of its tax break agreement with the city. The company, which manufactures car parts for professional racers and NASA, failed to meet the job creation and payroll benchmarks outlined in the Louisiana Industrial Tax Exemption Program (ITEP).
These cases exemplify the diverse nature of tax fraud and the proactive efforts of law enforcement agencies to combat it. As a result, taxpayers in Baton Rouge and across Louisiana can rest assured that fraudulent activities will not go unchecked.
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Companies not meeting tax break terms
In 2021, two Baton Rouge-based companies were found to have not met the terms of their tax breaks. International Mezzo Technologies, a manufacturer of car parts used by professional racers and NASA, had failed to meet the state-set jobs and payroll benchmarks outlined in its 2019 contract under Louisiana's Industrial Tax Exemption Program (ITEP). Despite this, the East Baton Rouge Parish Metro Council approved a new tax break for the company, with seven members voting in favour of the exemption and five against. The council's liberal members argued that the approval of the new ITEP project should be delayed until they could question Mezzo President Kevin Kelly about the company's non-compliance.
Another company, a local brewery named Tin Roof Brewing Company, was also found to be in violation of its contract with the ITEP program in 2018, 2019, and 2020. The East Baton Rouge Parish Metro Council recommended that the company be removed from the program but voted against recommending that the company repay the more than $30,000 in taxes from which it was exempt.
In addition to these cases, there have been other instances of companies in Baton Rouge not meeting the terms of their tax breaks. For example, ExxonMobil, the world's largest publicly traded oil and gas corporation, lost $2.9 million in tax breaks after a teacher walkout threat led the school board to vote against granting the company two property tax breaks.
These cases highlight the importance of accountability and compliance when it comes to tax break agreements between companies and local governments.
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ExxonMobil under-assessed on property taxes
ExxonMobil, the oil and gas giant, has been accused of being under-assessed for its 2018 property tax bill in Baton Rouge. Teachers and representatives from Together Baton Rouge (TBR) have requested the East Baton Rouge Parish assessor to include several hundred million dollars worth of capital improvements to ExxonMobil's property tax assessments. TBR calculated that the firm's property must be depreciating at a rate of 18.3% per year, which is significantly higher than the normal rates. ExxonMobil responded that it followed the "most conservative option" allowed by the assessor's office and that it would pay the property taxes owed if it does not receive awards from the Industrial Tax Exemption Program (ITEP).
ExxonMobil has faced tax controversies in several countries. In one instance, a US federal court denied the company a $1 billion refund request, ruling that it had improperly classified mineral leases as sales. The IRS initially assessed a $200 million penalty for claiming an excessive refund, but this was overturned on appeal. ExxonMobil also lost a separate request for a $337 million tax refund in the US and settled a $600 million tax dispute in Russia, both in 2017.
The company has been criticised for its lack of transparency in tax practices. ExxonMobil does not disclose sufficient information for investors to assess its tax practices and potential risks. The company only reports its US and aggregate foreign tax payments without providing a breakdown by jurisdiction, making it difficult to determine if the taxes paid align with economic activity. Additionally, ExxonMobil has resisted disclosing project-level payments to governments, despite being evaluated as non-compliant by the Extractive Industries Transparency Initiative (EITI) in 2021.
The trend towards tax transparency has gained significant investor support, with shareholders voting on tax transparency resolutions at several companies' annual general meetings. ExxonMobil itself has acknowledged the importance of being open about its tax payments. However, the company has not disclosed global tax strategies or provided detailed information about its tax practices, particularly in foreign jurisdictions.
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Tax evasion by a businessman
Tax evasion is a serious issue that can result in significant financial and legal penalties. In Baton Rouge, there have been several notable cases of businessmen and companies engaging in tax evasion and fraudulent activities.
One prominent case involved a Baton Rouge businessman and tax preparer, Joseph A. Gillies, who was arrested on felony fraud charges. Gillies was found to have prepared and submitted hundreds of tax returns with fabricated business losses for companies that often did not exist. This "ghost business" tax fraud scheme resulted in significant financial losses for the state of Louisiana, amounting to an estimated $768,740 from 2012 to 2015. Gillies was charged with felony fraud and booked into the East Baton Rouge Parish Prison.
In another instance, International Mezzo Technologies, a North Baton Rouge-based company, found itself in hot water with the Metro Council over tax break violations. The company, which manufactures car parts for professional racers and NASA, had been granted a tax break under Louisiana's Industrial Tax Exemption Program (ITEP). However, Mezzo failed to comply with the terms of its 2019 contract, which required meeting specific jobs and payroll benchmarks. As a result, the Metro Council considered imposing penalties on the company for its non-compliance.
Additionally, ExxonMobil, the oil and gas giant, faced scrutiny from the East Baton Rouge Parish assessor and community activists. They alleged that ExxonMobil was under-assessed for its 2018 property tax bill, potentially missing out on hundreds of millions of dollars in tax revenue. ExxonMobil had been seeking property tax breaks through the Industrial Tax Exemption Program and had filed for $338 million in capital expenditures for 2017. However, the final costs ended up being significantly lower, at $269 million.
These cases highlight the diverse nature of tax evasion and fraud, ranging from individual preparers to large corporations. The financial and legal repercussions of such actions can be severe, impacting not only the evaders but also the wider community and taxpayers. It is crucial for businesses and individuals to navigate the complex world of taxation with integrity and compliance, seeking expert advice when necessary.
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Tax relief services in Baton Rouge
While there is plenty of tax expertise in Baton Rouge, with a range of tax experts, accounting firms, and Certified Public Accountants (CPAs) available to assist individuals and businesses, there have been some instances of tax laws being broken by companies in the city.
In 2021, two Baton Rouge-based companies were found to have violated the terms of their tax breaks. International Mezzo Technologies, a manufacturer of car parts for professional racers and NASA, and another local brewery, failed to meet the job creation requirements of the Louisiana Industrial Tax Exemption Program (ITEP). This decades-old tax break exempts manufacturing companies from paying property taxes, but only if they meet certain benchmarks. While the Metro Council considered penalties for these companies, they ultimately approved a new tax break for International Mezzo Technologies.
In addition, there have been several arrests of Baton Rouge tax preparers and businessmen on felony fraud charges. In one case, a tax preparer was arrested for a fraud scheme involving "ghost" companies and phony business losses, resulting in significant financial losses for Louisiana taxpayers.
For those in need of tax relief services in Baton Rouge, there are several options available:
- Tax Relief Systems: This company serves Baton Rouge and the surrounding communities. They help with IRS liens, wage garnishments, penalty abatements, late tax returns, and business payrolls. They also have tax attorneys who can assist with various legal tax issues.
- EER Accounting Services L.L.C.: This firm has been serving individuals and small businesses in Baton Rouge for over 14 years. They specialize in individual and corporate tax return filing, tax planning, bookkeeping, and payroll processing.
- The Pruitt Group, L.L.C.: This tax and business advisory firm provides a range of financial solutions, including tax preparation and planning, entity formation, administrative support, and IRS resolution.
- Haynes Accounting and Tax Service, LLC: With over 15 years of experience, this firm offers tax planning, tax relief, tax preparation, and estate and trust tax services. They also provide financial planning and bookkeeping services.
- Ten40: A full-service accounting firm, Ten40 provides tax planning, preparation, and resolution services to individuals, families, and independent contractors. They also offer a range of business services, including bookkeeping and accounting support.
- Tax Defense Network: With offices in Baton Rouge, this well-established tax resolution company has been helping clients since 2007. They specialize in finding affordable solutions for state and federal tax problems, including setting up payment plans, removing tax liens, resolving back taxes, and filing late tax returns.
These are just a few examples of the tax relief services available in Baton Rouge. Each firm has its own unique set of services and areas of expertise, so individuals and businesses can choose the one that best suits their needs.
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Frequently asked questions
International Mezzo Technologies, a North Baton Rouge company, won a tax break from the city but failed to meet the terms of its 2019 contract.
The Metro Council will consider penalties against the company for violating its 2019 contract under Louisiana’s Industrial Tax Exemption Program (ITEP).
Yes, another company mentioned was a local brewery that was recommended to be removed from the ITEP by the East Baton Rouge Parish Metro Council.
Yes, a Baton Rouge tax preparer, Joseph A. Gillies, was arrested for a fraud scheme involving "ghost" companies and phony business losses.
In 2018, ExxonMobil was accused of being under-assessed for its property tax, with allegations of the company not declaring eligible expenses for ITEP.
