Revenue Investigation Leads To Surrender Of Knoxville Businessman On Sales Tax Evasion Charges

NASHVILLE, Tenn. - Gunvantrai H. Patel, 56, president of Shree Balaji, Inc., d/b/a Family Inns of America, 4300 Rutledge Pike, Knoxville, Tenn., surrendered himself for arrest yesterday to authorities at the Knox County Sheriff’s Office. A warrant for his arrest was issued after the Knox County Grand Jury returned a 36 count sealed indictment relating to evasion of sales tax due the State of Tennessee. Bond was set at $7,500. The investigation was conducted by the Special Investigations Section of the Tennessee Department of Revenue.

“The Department of Revenue promotes voluntary taxpayer compliance by educating taxpayers, aggressively pursuing criminal sanctions and demanding accountability when taxpayers engage in fraudulent activity,” said Revenue Commissioner Regan Farr. “This investigation underscores our department’s ongoing efforts to enforce Tennessee’s tax laws.”

Patel was indicted by the Knox County grand jury on February 28, 2007, on 23 counts of evading sales tax and 13 counts of theft. The 23 counts charge Patel with unlawfully and knowingly evading and defeating sales tax collected due to the State of Tennessee by failing to file sales tax returns and filing a false sales tax return on behalf of Shree Balaji, Inc. d/b/a Family Inns of America located at 4300 Rutledge Pike, Knoxville, Tenn. Evading tax is in violation of Tennessee Code Annotated Section 67-1-1440(g), a Class E felony. Patel was also charged with 13 counts of theft of property that included one Class A misdemeanor, 11 Class D felonies, and one Class C felony.

On December 5, 2006, Patel was arrested and charged with 12 counts of sales tax evasion in Davidson County.

Citizens who suspect violations of the Tennessee revenue laws should call the toll-free tax fraud hot line at (800) FRAUDTX (372-8389).

The Department of Revenue is responsible for the administration of state tax laws and motor vehicle title and registration laws established by the legislature and the collection of taxes and fees associated with those laws. The Department of Revenue collects approximately 92 percent of total state tax revenue. During the 2005-2006 fiscal year, the department collected $10.3 billion in state taxes and fees. In addition to collecting state taxes, $1.8 billion of local sales tax was collected by the department for local governments during the 2005-2006 fiscal year. Besides collecting taxes, the department enforces the revenue laws fairly and impartially in an effort to encourage voluntary taxpayer compliance. The department also apportions revenue collections for distribution to the various state funds and local units of government. To learn more about the department, log on to www.Tennessee.gov/revenue.