Tax scheme suit targets Calif., Idaho men

March 7, 2005 at 3:09 PM

BOISE, Idaho, March 7 (UPI) -- The Justice Department says it has filed suit against a California man and an Idaho man to stop a "brazen tax-evasion scheme" for dairy farms.

A complaint filed in Boise, Idaho, said Michael Lee Yohe of Newberry Springs, Calif., and Michael Thompson of Filer, Idaho, operated an allegedly fraudulent employment tax scheme affecting more than 50 dairy farms and more than 1,100 farm employees in four western states.

The complaint described the men's actions as causing more than $12 million in employment and income tax losses.

Under some circumstances, federal law exempts from the employment tax in-kind payments of agricultural commodities for agricultural labor.

The complaint alleges the defendants and their corporations, Ag-Mart Services Inc. and Mancat, Inc., help Idaho, California, Arizona and Oregon dairy farms disguise cash wages the farms pay to their employees as purported in-kind payments of milk, so as to avoid employment tax withholding laws.

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