SOUTH CAROLINA DEPARTMENT OF REVENUE
Public Affairs Office
Phone (803) 898-5464
Contact: Danny Brazell
Fax (803) 898-5446
FOR IMMEDIATE RELEASE
July 8, 2004
Myrtle Beach man charged with tax evasion and forgery
A Myrtle Beach man employed by an Horry County all-terrain vehicle dealership is in jail today after South Carolina Department of Revenue investigators charged him with tax evasion and forgery related to his business practices.
James Timothy Phillips, 38, is being held at the J. Reuben Long Detention Center pending a bond hearing. Phillips, the general manager for Red Line Sports Inc., is charged with three counts of sales tax evasion and seven counts of forging tax documents of more than $5,000 in value. Phillips is the first person arrested in South Carolina in a joint-audit of ATV and watercraft dealerships by the North Carolina and South Carolina Departments of Revenue.
Phillips is accused of submitting affidavits of sales to the Department of Revenue showing the deliveries of ATV sales were made to North Carolina clients where no South Carolina sales tax would have been due. But the investigation by the South Carolina Department of Revenue and contact with the ATV buyers by the department showed the deliveries were made at the dealership in South Carolina where sales tax should have been collected. The Department of Revenue estimates Red Line’s sales tax liability at $25,508 from sales of watercraft and all-terrain vehicles made from 1999 – 2001.
Phillips is facing up to 85 years in prison if convicted of all the charges.
The North and South Carolina Departments of Revenue began their joint audit of ATV and watercraft dealers in April, looking for dealerships in both states who were avoiding paying either state’s sales and use tax by submitting fraudulent invoices or tax information with their tax returns. Prior audits by the revenue departments showed that frequently, dealers would indicate on invoices that vehicle deliveries were made to the customer in the neighboring state, making the customer responsible for paying any sales tax owed. However, the customer’s invoice issued by the dealers would often incorrectly show that taxes were not due. The revenue departments’ audit of these dealerships is ongoing.
The Horry County Sheriff’s Office assisted the Department of Revenue in today’s arrest.