GREAT FALLS — A man has been charged in federal court in Great Falls with filing false income tax returns after an undercover investigation determined he did not report approximately $1.4 million of his gross receipts, resulting in a tax loss of almost $500,000.
U.S. Attorney Jesse Laslovich said in a news release on Friday, August 2, 2024, that a grand jury indictment in U.S. District Court charges Tommy Michael VanHoose with five counts of submitting a false tax return.
“The indictment alleges VanHoose, by his own claims, skimmed cash from his firearms business and did not report 20 percent of his gross receipts to the IRS, which resulted in a substantial underpayment of income taxes to the United States. After a thorough investigation conducted by the IRS, we allege VanHoose’s own statements to an undercover agent were accurate, which is why he is charged with multiple counts of submitting a false federal tax return,” Laslovich said.
The indictment alleges that VanHoose owned and operated Highwood Creek Outfitters LLC, a firearms distributor and shooting range in Great Falls. VanHoose, through a real estate agent, listed the business for sale for $1,750,000.
An IRS undercover agent, posing as a potential buyer, inquired about the list price by calling the real estate agent in February 2023.
The real estate agent told the undercover that, “[N]ot everything flows to the tax returns.”
In a later conversation, the real estate agent told the undercover agent that they would not identify in writing any “off the books” income but the actual amount of income was “substantial.”
The agent toured Highwood Creek Outfitters with VanHoose in May 2023.
According to court documents, during the tour, VanHoose stated that he skimmed approximately $450,000 in cash and repeatedly stated he did not report 20 percent of the gross receipts to the IRS.
Based on his own claims and on records obtained through a search warrant, VanHoose underreported approximately 20 percent, or about $1,486,404, of his income for tax years 2018 through 2022, resulting in him owing the IRS approximately $492,254.
The indictment alleges that when individuals purchase firearms from Highwood Creek Outfitters, they are required to complete a Bureau of Alcohol, Tobacco, Firearms and Explosives Form 4473, which identifies the firearm purchased.
Court documents:
The agent asked VanHoose how underreporting of income was possible when the ATF tracked gun sales by serial number through ATF Form 4473s.
VanHoose reportedly replied, “It’s easy” and stated, “they don’t know what I’m paying for or I’m getting in income off those guns.”
IRS agents executed a search warrant on June 14, 2023, at Highwood Creek Outfitters to obtain, among other items, the ATF Form 4473s to determine the amount of unreported income.
The actual gun prices were attached to the ATF Form 4473s and confirmed that VanHoose skimmed cash and underreported his gross receipts to the IRS.
After the search warrant was executed, VanHoose told MTN News: "The fact that they think we make so much money as a gun business that they had to come investigate all the thousands, hundreds of thousands, millions of dollars whatever it is we supposedly absconded with, anybody that knows the margins in the gun business knows they’re not that high."
Van Hoose said at the time that the agents were cordial and professional, but he felt "invaded."
Van Hoose told MTN News that his shop had a good relationship with the Bureau of Alcohol, Tobacco and Firearms, claiming that because his shop carries “fun guns” like AR-15s and AK-47s, their level of licensing draws more scrutiny.
“We have a reputation of dotting all the i's and crossing all the t's because there's so much legal fun to be had,” said Van Hoose. “It's just not worth doing things that are going to get you in trouble.”
Several days after his business was searched, a rally was held to show support for VanHoose:
The indictment also alleges that VanHoose sold firearms for a higher price than what he entered into a point of sales system for the business; gave or sold firearms to others in which he did not record the transaction; and lied to his accountant by providing incomplete records to underreport income to the IRS.
If convicted, VanHoose, 66 years old, faces up to three years in prison, a $250,000 fine, and one year of supervised release on each count.
A summons was issued for VanHoose to appear for arraignment on September 10 before U.S. Magistrate Judge John Johnston in Great Falls.
The news release notes that an indictment is only an accusation, and a defendant is presumed innocent unless proven guilty beyond a reasonable doubt.
