GATLINBURG, Tenn. – The Special Investigations Section of the Tennessee Department of Revenue conducted the investigation that led to the arrests of Kevin Matthew Flannery, age 62, president of M.K.M.K. Associates, Inc., dba Southland Car & Jeep Rentals in Gatlinburg, Tenn., and Margaret Anne Flannery, age 60, president of X.M.K.M. Enterprises, Inc., dba Famous Fries in Gatlinburg, Tenn. The Flannerys were arrested at their home in Gatlinburg by agents of the Department of Revenue with assistance of the Sevier County Sheriff’s Department. Both were charged with tax evasion. Bond was set at $25,000 each.
On July 13, 2009, the Sevier County Grand Jury indicted the Flannerys. The indictments charged Kevin Matthew Flannery with 21 Class E felony counts of Motor Vehicle Rental Surcharge Tax Evasion in violation of Tenn. Code Ann. Section 67-1-1440(g) for failure to remit collected motor vehicle rental surcharge tax in the amount of $21,411.42 from April 1, 2002 through June 30, 2007. Margaret Anne Flannery was indicted on 45 Class E felony counts of Sales Tax Fraud in violation of Tenn. Code Ann. Section 67-1-1440(g) for failure to remit collected sales tax in the amount of $46,352.68 from Jan. 1, 2003 through Sept. 30, 2006.
“The Department of Revenue is committed to applying Tennessee’s tax laws and policies uniformly to all taxpayers to ensure a level playing field,” said Revenue Commissioner Reagan Farr. “The department cannot and will not allow people engaged in fraudulent tax activities to have a competitive advantage over honest businesspeople.”
If convicted, the Flannerys could be sentenced to a maximum of two years in the state penitentiary and fined $3,000 for each count. Additionally, civil taxes, penalties and interest will be due the state.
This case was pursued criminally by the department in cooperation with District Attorney General James Dunn’s Office. Citizens who suspect violations of Tennessee’s 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 2008-2009 fiscal year, the department collected $10.2 billion in state taxes and fees. In addition to collecting state taxes, $1.9 billion of local sales tax was collected by the department for local governments during the 2008-2009 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.TN.gov/revenue.
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