Skips Taxes, Buys Toys: Montana Contractor Pleads Guilty to $2.8M Tax Evasion

handcuffs sitting on a 1040 tax form
A plea agreement reached by the parties calls for the government to seek the dismissal of 32 remaining counts and for Horner to be responsible for total restitution of $2,878,522 if the court accepts the agreement at sentencing.
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The co-owner of Belgrade, Montana-based H&H Earthworks pled guilty April 8 to failing to pay $2.8 million in employee and employer taxes, a felony, and failure to file a quarterly return and pay tax, a misdemeanor, according to a U.S. Department of Justice statement.

Melissa Lynne Horner, 42, instead spent some of the money on personal expenses.

From 2014 through 2019, Horner, who was responsible for the financial side of the business, had H&H Earthworks bankroll more than $100,000 on dirt bikes and snowmobiles, $90,000 to a real estate title company in Bozeman, at least $50,000 on personal home renovations and $20,000 for a motorhome, says the DOJ.

At the same time, the company failed to pay the IRS payroll tax required to be withheld from employees’ paychecks. The company employed between 20 and 60 workers from 2014 through 2019.

Horner faces a maximum of five years in prison, a $250,000 fine and three years of supervised release on the felony failure to pay charge. Sentencing is scheduled for August 10. 

“As the deadline for filing tax returns approaches, the public should be aware that people like Horner who willfully violate the tax laws will be investigated and charged with felony tax crimes that can result in significant penalties including prison time, fines and restitution,” U.S. Attorney Leif M. Johnson said.

“Payroll tax evasion is not just a crime against the United States Government, but also a crime impacting the employees of Earthworks as it results in the reduction of their benefits,” said Andy Tsui, IRS criminal investigation special agent in charge, Denver field office. “IRS Criminal Investigation will vigorously pursue anyone who collects these taxes and uses these funds for their own personal gain."

In total, says the DOJ, Horner will be responsible for total restitution of $2,878,522 if the court accepts the agreement at sentencing.