Business owner hit with tax fine

Posted: February 26, 2013

The Winchester Star

WINCHESTER — A city business owner was fined $250 Monday after being found guilty of failing to provide documents required to perform tax assessments.

Judge Amy Tisinger found Martin B. Gavis guilty in Winchester General District Court of failing to provide documents requested by the commissioner of the revenue’s office. The Class 3 misdemeanor was punishable by a fine of up to $500.

City Attorney Tony Williams said he was pleased with the outcome.

“I believe the court reached the right resolution in this case,” he said. “The city’s hope always is that the taxpayer provides the documents we need and we don’t have to reach this point.”

Williams said the city will continue to pursue the records it contends are necessary until Gavis provides them. He operates Marty’s Used Cars and Colonial Garage, and their business license fees are based on gross receipts.

Gavis and the city also are involved in three other legal actions.

A motions hearing is scheduled for Thursday related to Gavis’ appeal of a zoning director and Board of Zoning Appeals decision that he is operating a wholesale vehicle dealership out of his home at 414 S. Braddock St. He is permitted to operate a retail outlet.

The city also has filed civil actions against him related to zoning ordinance violations for the condition of his home and for having a bucket truck parked in front of it. Gavis was found guilty of those violations in General District Court but has appealed the decisions to Circuit Court.

According to testimony in Monday’s case, the inquiry into Gavis’ city tax liability began last May when Brenda Fristoe, Winchester’s tax field auditor, noticed discrepancies between information he had provided to the state and the city. She gathered other information available to her but still was unable to reconcile the issues.

Based on testimony, at least two summonses and at least two follow-up letters were issued for Gavis to provide multiple records for 2008 to 2011, and repeated efforts have been made since then to obtain:

A copy of his complete, signed tax returns for those years. Gavis testified that he provided the city a copy of Schedule C of that form, “which has to do with the garage and the used car lot,” and that an accountant told him he didn’t have to provide his personal tax return.

“You’re not auditing me personally,” he told Williams under cross-examination.

A copy of his daily cash receipts. Gavis said he’s kept no such records in the 50 years he’s been in business.

An inventory of his vehicles. Gavis said that was not pertinent to the inquiry.

A copy of bank statements for his businesses. Gavis said Marty’s Used Cars and Colonial Garage are “strictly cash and carry” and he has no bank statements for them.

Monthly sales tax reports. Gavis said he has no retail sales at either business that require sales tax collections.

A list of his business and personal property. Gavis said he “had no idea” how that was pertinent to the case.

Copies of the business license information he provided Frederick County, where he also operates a business under the name Colonial Garage. “You can request any documents you want,” Gavis said, “but if they’re not in your jurisdiction, you don’t get it.”

Gavis did provide copies of some ledger book pages at some point during the process.

Under cross-examination, he admitted to telling Fristoe and Ann Burkholder, the commissioner of the revenue, that he provided false data to the city after being questioned as to whether he was going out of business because of low sales.

“I manufactured the numbers,” he told the court.

In issuing her ruling, Tisinger didn’t address each group of records that had been requested. She said only one was needed to find him guilty of the charge.

“The federal tax return documents,” she said, “are something they certainly would need to have for ferreting out the problems.”

Tisinger told Gavis he has 10 days to appeal her decision.

— Contact Vic Bradshaw at vbradshaw@winchesterstar.com