A Missouri man was sentenced in federal court for tax evasion.
Duane Dixon, 59, of Sedalia, was sentenced by U.S. District Judge Gary A. Fenner to three years in federal prison without parole. The court also ordered Dixon to pay $639,733 in restitution to the IRS.
On Feb. 2, 2021, Dixon pleaded guilty to one count of tax evasion. Dixon admitted that he failed to file tax returns from 1996 through 2010.
Dixon hired a return preparer in 2010 to prepare tax returns for 2005 to 2010 but provided this return preparer with false and incomplete information, and knowing that these returns omitted significant income, submitted these same returns to the IRS. Dixon’s returns included taxable income amounts that greatly understated his true income, resulting in a tax due and owing of $237,821 for tax years 2005 to 2010, with additional penalties and interest of $401,912, for a total tax loss of $639,733. Over this same period of time, Dixon had additional taxes owed to the State of Missouri in the amount of $57,330.
The IRS sent Dixon numerous notices of enforcement collection actions between August 2003 and July 2015. Dixon filed bankruptcies when the IRS attempted to assess or collect his taxes to forestall levies and seizures of his property. Those cases were later dismissed by the bankruptcy court.
Dixon formed Dixon Builders LLC in February 2012. He subsequently opened bank accounts, bought and sold real estate, and purchased a boat and vehicles in the LLC’s name. During the 2013 and 2014 tax years, Dixon purchased nine pieces of real estate outright in the name of Dixon Builders LLC. On July 24, 2014, Dixon told an IRS Revenue Officer, who was attempting to collect payments from him, that he had no personal or business bank accounts, that he had no business such as an LLC, that he was self-employed as a handyman, and had no employees, and that he did not own any rental homes or have any rentals in a business or other person’s name. Dixon knew these statements were false at the time he made them.
When the IRS notified Dixon in January 2015 of the filing of alter ego liens against assets titled to Dixon Builders LLC, he immediately transferred three separate properties by quitclaim deeds from Dixon Builders LLC to his adult children. Soon afterward, Dixon acquired another property in the names of his adult children. Dixon’s children provided no consideration for the properties and had no intent to acquire or claim ownership of the properties; Dixon maintained de facto ownership.
Rather than pay his outstanding tax liability, Dixon continued to spend money on extravagances such as personal vehicles and motorcycles.
This case was prosecuted by Assistant U.S. Attorney Patrick D. Daly. It was investigated by IRS-Criminal Investigations.