SPRINGFIELD, Mo. (March 20, 2001)—Friend Tire Co. has entered a guilty plea to four misdemeanors in a five-year-old case involving alleged non-payment of federal excise taxes on Yokohama truck tires imported from Canada.
The tire distributor, a wholly-owned subsidiary of Fullerton, Calif.-based Yokohama Tire Corp., pled guilty Feb. 9 to four counts of failing to file federal excise tax returns on nearly 5,000 imported tires. If U.S. Magistrate Judge James C. England in Springfield federal court accepts the plea, Friend Tire will pay a $100,000 fine and admit liability for nearly $160,000 in unpaid taxes.
Friend Tire, in Monett, Mo., was one of several tire distributors across the U.S. accused of "gray market" truck tire sales. The IRS alleged that the companies certified large tires for export and then sold them domestically, defrauding the federal government of excise taxes.
On Feb. 14, 1996, IRS agents made surprise raids of all the accused companies, seizing bank records, receipts, invoices, disbursement ledgers, tax records, canceled checks and other financial documents which might have related to the excise tax investigation.
The raid caused Don Isbell, president of Friend Tire, to write a letter of protest to his congressman and senators. The IRS used "strong-arm tactics" against Friend Tire, Mr. Isbell claimed in his Feb. 29, 1996 letter, and the company would have cooperated fully had the agency simply asked for the records "in a reasonable manner."
Mr. Isbell declined comment on the currently pending plea, except to say that he expected Judge England to rule on it soon.