As a follow-up to my prior post about tax structuring, the story below gives a real life example of structuring payments in an effort to evade taxes.

Fed court: Two thumbs down on movie theaters’ tax evasion

A co-owner of movie theaters in Port Orchard and Bremerton pleaded guilty Friday to not paying taxes on incomes from those businesses.

Cindy Ondracek of Port Orchard made that in U.S. District Court in Tacoma.

Ondracek and her husband Jack have owned a three-screen drive-in movie theater in Port Orchard since 1986, and a Bremerton theater, the Redwood Cinema, from 2002- to 20005.

Ondracek admitted in court that the she did not pay income taxes on $197,000 in revenue from those theaters from 2002 to 2005, said a federal Internal Revenue Service news release. About $68,000 in taxes was owed.

Overall, the Ondraceks took in about $2 million in gross receipts in that period, the IRS said.

The Ondraceks failed to file tax returns for those years, the IRS said. Cindy Ondracek made deposits to their bank accounts in sums of less than $10,000, which is the threshold for banks to report deposits to the federal government.

The news release did not elaborate on Jack Ondracek. But it noted that Cindy Ondracek knew about the $10,000 reporting threshold, and was the one who structured the deposits to fall beneath that level.

Cindy Ondracek is scheduled to be sentenced on May 27. She faces up to five years in prison and a $250,000 criminal fine, plus interest and penalties on the tax loss. The Ondraceks also face civil penalties on the cases.

If you have been charged with tax structuring, contact Knoxville Tennessee tax attorney Norman D. McKellar today at 865-566-0125.