Raleigh Businessman Pleads Guilty To State Tax Charges

Date: 7/6/2005

RALEIGH – A Raleigh businessman pleaded guilty Wednesday in Wake County District Court to felony tax charges filed by the North Carolina Department of Revenue.

David A. Krabacher, 62, of 9412 Bartons Creek Road, Raleigh, pleaded guilty on July 6, 2005 to two counts of sales tax evasion.

Wake County District Court Judge Jane Powell Gray sentenced Krabacher to a five-month minimum, six-month maximum prison term. The sentence was suspended and Krabacher was placed on supervised probation for 12 months. He was also ordered to perform 75 hours of community service and pay a $500 criminal fine. Before entering his plea, Krabacher paid restitution of the tax, penalty and interest.

The state’s evidence showed that Krabacher, as president and responsible officer of American Car Care Inc., and Fix & Fly Car Care Inc., of Raleigh charged and collected $24,116.70 in sales tax from October 2003 through February 2005. In an effort to defeat the tax, Krabacher remitted a self-prepared bond certificate of no monetary value to the Department of Revenue as payment for his taxes. According to Krabacher’s interpretation of the Internal Revenue Code, the federal government was responsible for paying any debt that he owed and the Federal Reserve should have supported the bond. When hearing the case, Judge Gray commented that she had never heard the theory that the federal government would pay a persons state and local sales taxes. Krabacher’s attorneys stated that their client had received bad advice from his bookkeeper.

The charges against Krabacher resulted from an investigation by the Department of Revenue’s Raleigh Revenue Office and its Criminal Investigations Division.

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