After his Great Falls gun store was raided by IRS agents last summer, Tommy VanHoose said he felt he was targeted for political reasons due to the kinds of guns he sold.
But according to charging documents made public by federal prosecutors Friday, the raid came after VanHoose spilled the beans to an undercover agent about under-reporting more than $1 million of income to the IRS. The U.S. Attorney’s Office in Montana released a grand jury indictment charging VanHoose with five counts of submitting a false tax return.
The June 2023 raid of VanHoose’s business, Highwood Creek Outfitters, sparked a wave of public concern from Montana politicians over the seizure of firearm transaction records. Now more than a year later, the indictment sheds light on why agents seized those records.
Prosecutors allege that VanHoose skimmed $450,000 in cash from sales at Highwood Creek Outfitters and failed to report some $1.4 million of income to the IRS over a five years.
At his shop on Friday, VanHoose told Montana Free Press that he still feels he’s the victim of politics.
“Politically targeted,” he said. “They didn’t do any audits or anything.”
Federal authorities say the investigation began in Feb. of 2023 when the undercover agent responded to a listing of VanHoose’s business for sale. An unnamed real estate agent told the undercover agent that “[n]ot everything flows to the tax returns,” according to the indictment. During a subsequent tour of Highwood Creek Outfitters in May 2023, VanHoose repeatedly told the agent that he didn’t report 20% of his income to the IRS, charging documents say. He allegedly told the undercover agent that even though the U.S. Bureau of Alcohol, Tobacco, and Firearms tracks gun sales, he could still under-report to the IRS because “they don’t know what I’m paying for or I’m getting in income off the guns.”
VanHoose told MTFP that the person who he believed to have been the undercover agent said he was from Chicago.
“He blew smoke at me, and I blew smoke at him,” VanHoose said.
IRS agents raided Highwood Creek Outfitters in June 2023. Agents targeted ATF Form 4473s, which are transaction records required for gun purchases at a federally licensed dealer. They include information about the purchaser and transaction price.
The raid sparked a wave of outcry and an online fundraiser that has collected $25,000 for legal fees. Montana politicians also joined the frenzy.
Sens. Steve Daines and Jon Tester honed in on the seizure of Form 4473s, which included information about the gun purchasers. Both sent letters to the IRS demanding more information about how that information would be used.
A spokesperson for Daines sent a statement on Friday reiterating concerns about the lack of transparency about the seizure of documents containing customers’ personal information and the lack of notice to local law enforcement. Regarding the indictment, the statement said that “Daines trusts the judicial process and will respect the outcome.”
A Friday statement from Tester’s office said that “Senator Tester believes every American should be treated fairly before our legal system and expects this case to be no different.”
Rep. Matt Rosendale also wrote a letter expressing concerns about the Form 4473s, saying there is “no circumstance” that the forms would be necessary in an IRS investigation. Rosendale went a step further to bolster VanHoose’s claims of political targeting, claiming that the raid was an attempt by the Biden administration to intimidate firearms dealers. The Congressman also posted an image of himself alongside VanHoose to social media platform X, previously Twitter.
“I am concerned that this is another attempt by the IRS to create a database on people that they target for being conservative because they want to own their own firearm,” Rosendale said in an interview on Newsmax.
Rosendale’s office didn’t return requests for comment.
In the federal indictment, prosecutors say that the Form 4473s contained the actual gun prices, which agents compared to VanHoose’s business records. They found that the price of guns on the Form 4473s, which customers paid, were more than what VanHoose entered into his point-of-sale system, the indictment says. The investigation found that customers paid $187,527 more than what VanHoose entered in his business software.
In some cases, VanHoose allegedly entered no sale into his point-of-sale system for a transaction documented on a Form 4473. Prosecutors say VanHoose sold $572,462 worth of guns without reporting those funds to his point-of-sale software.
Finally, the grand jury indictment says that VanHoose submitted incomplete records to an accountant to under-report his income. This amounted to more than $1.4 million in unreported money, which would have cost him $492,254 in income taxes.
On Friday, VanHoose said that a press release from the Montana U.S. Attorney’s office was the first he had heard of the indictment. After a reporter showed him the release, he said, “None of that’s true.”
Clair Howard, a spokesperson for the U.S. Attorney’s Office, declined to comment on the summons process or VanHoose’s claims of political motivation.
The five counts against VanHoose represent five years of under-reported income from 2018 to 2022. The maximum penalty for the charges is three years in prison, $250,000 in fines and a year of supervised release for each count. An arraignment is scheduled for Sept. 10 at the U.S. District courthouse in Great Falls.
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