A recent arrest made in the U.S. Virgin Islands has demonstrated the territory’s renewed dedication to enforcing tax evasion laws. In April, police arrested Johnathan Cohen, the sole owner of JKC Communications. Cohen was charged with failing to file and pay both individual and corporate income taxes for the past several years, according to the U.S. Virgin Islands Department of Justice and Internal Revenue Bureau (IRB).
JKC Communications is the parent company of several of the territory’s largest radio stations: Isle 95, Sunny 99.5 FM, AM 970-WSTX, Mongoose 104.9 FM and WSTX FM-100. Cohen’s arrest is one of many more to come as part of a greater effort to crack down on tax evasion, according to the U.S. Virgin Islands’ Tax Collection Task Force. Cohen allegedly failed to file taxes for a seven-year period between 2004 and 2010, during which time his corporations took in more than $10 million. In addition to failing to pay taxes owed to the territorial government, Cohen allegedly failed to file gross receipts tax returns during the same seven-year period.
The U.S. Virgin Islands has experienced a growing number of tax evasion issues since implementing economic development programs and tax breaks intended to lure new businesses to the area. While successful in bringing new companies to the territory, these incentives have also made it possible for more organizations to file false claims or avoid paying taxes altogether. In particular, the reluctance to file gross receipts taxes (a type of tax that is largely self-regulated) has been an area of concern for local and federal authorities.
A recent statement issued by Vincent Frazer, the U.S. Virgin Islands Attorney General and Co-Chair of the Tax Collection Task Force, explained that there are many individuals living in the territory who continue to fail to file or pay their taxes. It is the Task Force’s mission to bring those individuals to justice and collect any payment owed.
The investigation into Cohen’s case was carried out by the IRB under the leadership of Director Claudette Watson Anderson, with additional assistance from the U.S. Internal Revenue Service (IRS), which will continue to help with any upcoming tax evasion cases.
This news provides a good example of why it is important to work with an attorney to ensure you have all of your legal obligations covered, especially if you own or operate a business. Tax evasion is a serious crime, and it’s likely that the U.S. Virgin Islands will only ramp up its efforts to mitigate the issue in the months and years to come.
BoltNagi is a well-established and widely respected government relations law firm serving clients throughout the U.S. Virgin Islands.