Couple charged with tax fraud

A Milaca couple is facing three felony charges for violating state tax laws regarding their Mora-based photography studio.

Linda Rother, 58, and her husband David Mormann, 59, both of Milaca, are facing the criminal charges in Kanabec County, according to the Minnesota Department of Revenue.

Rother is charged with making sales without a permit after the permit was revoked, failing to file a tax return, and failing to pay taxes. Mormann is charged with aiding and abetting sales without a permit after the permit was revoked. Failing to file a tax return, and failing to pay taxes.

Rother ran Studio One Portraits when she failed to pay to the state taxes she collected from customers for her business services, according to a criminal complaint filed in Kanabec County District Court. She is also accused of defaulting on payment plans made with the department of revenue and continued making sales without submitting payment to the state or filing sales tax returns, the complaint states.

In 2010, the department of revenue revoked Rother’s sales tax permit, which made it a crime to operate her business. But in 2011 Rother made sales under a different business name, Dital Hot Shots, and once again failed to file a sales tax return, the complaint alleges. Records show Rother had more than $100,000 in sales in 2011 and customer invoices show sales taxes were charged and collected, the complaint states.

The department of revenue states that Rother owes the state about $50,000.