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11/16/2012 6:01:00 AM
IRS rounds up Kiddie Korral honcho
Warnings ignored since 2005; total owed exceeds $318,000
JC AMBERLYN/MinerThe owner and operator of three Kiddie Korral daycare facilities in Kingman pleaded guilty in federal court Tuesday to charges of withholding $318,000 in federal employment taxes dating back to 2003.
JC AMBERLYN/Miner

The owner and operator of three Kiddie Korral daycare facilities in Kingman pleaded guilty in federal court Tuesday to charges of withholding $318,000 in federal employment taxes dating back to 2003.

Erin Taylor
Miner Staff Reporter


KINGMAN - A daycare operator who ignored repeated warnings from the Internal Revenue Service faces possible imprisonment for failing to pay $318,304 in back taxes.

Raycene Rosencrans Osterman, who operates three Kiddie Korral facilities, admitted in federal court Tuesday that she withheld federal employment taxes dating back to 2003 but never remitted the withheld taxes to the IRS.

She conceded in her plea agreement that she was warned as early as 2005 that she could face criminal penalties for failing to pay.

She said she was warned again in 2008. In 2009, she was visited by a third IRS agent. "In response, I repeatedly promised this agent that I'd deposit the overdue payments, but I never followed through on these promises," she said in court files. "Finally, in January 2011, an agent warned me again that I needed to make the missing deposits."

Osterman said she used the money to pay business expenses, including $260,000 in rent payments to her landlord, Five-O Partners. Five-O Partners is a trust controlled by her family members, according to documents.

Osterman was ordered to repay the total amount of $318,304.48. She faces a fine of up to $10,000 and up to five years in prison when she is sentenced Feb. 5 in U.S. District Court.



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Related Stories:
• $318,000 tax bill waiting for day care owner headed to prison
• $300K fine imposed on Kingman day care tax evader


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Reader Comments

Posted: Friday, November 16, 2012
Article comment by: Dee Dee Jones

Bottom line...Raycene withheld funds from her employee's pay checks and kept those funds. Repeated warnings from the IRS and she ignored them. She is a thief and I hope she gets the maximum.

Posted: Friday, November 16, 2012
Article comment by: J J

Love all the armchair accountants and constitutional scholars here trying to say we don't have to pay taxes. You clowns have no clue what you're talking about.

Let me fill you in: A company is obligated to withhold employee taxes and send them to the appropriate entity (IRS, State, etc). The employer can choose to do this monthly, quarterly, or yearly. You can do whatever you want with that money before sending it off to the IRS, but it's a slippery slope as you may not have it all when it comes due at years end. So that's obviously what happened here, and now she is behind the eight-ball trying to get it paid back and is likely going to be in massive trouble. This is never a good way to run a biz.


Posted: Friday, November 16, 2012
Article comment by: az mac

conerned citizen
The article only says back taxes. There is no law that says you have to pay income tax. There is force just like the crooks who say pay for insurance to protect your place or we will burn it down. The IRS handbook say income tax is voluntary. The income tax is one of the biggest frauds the government has done. Our founders started this country with no income tax. The income tax was put in by the federal reserve in 1913 when they got their charter. The federal reserve also had us taken off the gold standard so money would have inflation which is a tax that the banks make money from. Americans have been being ripped off for the last 100 years in many ways. Since most people do not know the constitution or our history they have no clue they are being ripped off.
Because of the ignorance of most people you will soon see this country crash.
Watch the news companies are laying people off like crazy. We already have over 100 million with no jobs and around 48 million on food stamps.


Posted: Friday, November 16, 2012
Article comment by: conerned citizen

If there are no laws saying we have to pay taxes, why is this particular lady in court facing fines and possible jail time???
Why doesn't she just walk out the door w/o saying goodbye?

And, by the way, these are not regular taxes, but employment taxes that she actually collected from her employees, but never turned in. Big difference, wise guys!


Posted: Friday, November 16, 2012
Article comment by: There is NO LAW on paying taxes

You are RIGHT ON az mac!! There is NO written LAW that WE THE PEOPLE HAVE to PAY taxes!!! Thanks for the video link!!

Posted: Friday, November 16, 2012
Article comment by: no bout em

This might serve as a warning to all the "good ol boys". You might be able to do whatever you like here in mohave county, but there are times you have to answer to the feds. Now if they would only do something about our courts. I know people with dog violations that get more fines and put on probation than the good ol boys' kids who steal and use drugs.

Posted: Friday, November 16, 2012
Article comment by: Not Surprised

That place looks so bad from the road most people would not let there cows in there yet alone children.

Posted: Friday, November 16, 2012
Article comment by: az mac

http://www.youtube.com/watch?v=J370TMhghnE
This jury found that there is no law to pay taxes.



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