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May 5, 2005

Former Palatka Restaurant Owner Arrested for Failure to File Tax Returns

The former owner of a Palatka restaurant has been arrested on charges that she failed to file tax returns and failed to send in tax that she had collected from her customers, despite repeated warnings from the Florida Department of Revenue.

Darlene McBay, 49, of Palatka, was arrested April 27, 2005, by the Putnam County Sheriff's Department on felony charges relating to failure to file tax returns and pay tax. If convicted, she faces up to 5 years in prison and up to $5,000 in fines, as well as possible repayment of stolen tax, interest, penalty and investigative costs. McBay operated the Rainbow Caf, located at 216 Johns Street, in Palatka. The business has been closed since it suffered damage during the 2004 hurricane season.

According to Revenue Department investigators, McBay opened her restaurant in 1993, but failed to file tax returns as required by law. Revenue Department staffers repeatedly contacted McBay, urging her to comply with tax law. Despite repeated promises to comply with the law, McBay failed to fulfill her legal obligations. During the 2004 hurricane season, the restaurant was damaged and the business closed. After the business closed, Revenue Department staff contacted McBay, asking her to provide business records from the closed restaurant and to file tax returns. Again, she failed to fulfill her obligations under law.

"To be fair, tax law must apply uniformly to all businesses," said Jim Zingale, executive director of the Revenue Department. "If one business is allowed to evade its obligation to obey the law, then law-abiding businesses must operate at a competitive disadvantage. The Department of Revenue cannot and will not allow this to occur. "

If you have information about tax theft, please call the Florida Department of Revenue investigations office in Alachua at 386-418-4415.