And so it begins.....Torco

[Bowtie]

this is what I find interesting

the IRS currently is withholding payment of more than $19.5 million in federal fuel-excise tax rebates that Knoll's Torco Racing Fuels company had claimed for two quarters in 2007 and 2008. The government refunds were used to collateralize a $15 million loan that Chemical Bank made to Knoll's company.

He spent what he didn't have, but who in their right mind would loan someone money based on repayments from the government, wonder if the bank will loan me money because a loanshark owes me a refund?
And it sounds like all of this will go away should he get his money from the government.

Knoll's company claims it paid excise taxes when it bought thousands of gallons of fuel from four sources that were blended to produce its racing grades, according to documents filed with the government and included in the Chemical Bank case.

According to the documents, Torco says it did not pass those taxes on to its customers who used its formulas in race cars. Excise taxes are charged for fuel used in street vehicles. The company said it filed for the rebates to recoup the excise taxes it paid to the government.

If this is the case, then he is entitled to the refund.

 

[nedannouncer]

D
And it sounds like all of this will go away should he get his money from the government.

Rob, you must have missed the line where it mentioned that the IRS officials said he was never entitled to the refunds in the first place.

I see "going away" as being the way this story ends, but in a far different context than you mention it in your post.

Brian

 

[Paul]

So it appears what I heard in Indy is true, Evan is still in a warmer climate then Michigan. If the man is innocent he would not be hiding. Throw the book at him and everyone else involved with this debacle.

 

[Just Paul]

This guy makes John John Constanza (JCIT) look more and more like a saint every day!!

 

[Larry]

I know people that had a hard time proving different after the IRS told them they were dead !
The IRS is a burocracy first and since when was a burocrat always right.
I know a little about off road fuels and in the large venue of diesel you have red dyed non taxed diesel for non highway use and that which is used in cars and trucks [ highway use ]is taxed.
Racing fuel even though a minor player should definitely be exempt from road taxes and if Torco paid it in expecting a rebate after a ruling [ that never came or was ruled against him] then he has recourse of a hearing and show cause when the fuel is not intended for highway use.

Don't blame him for going on vacation waiting on the government for a hearing to reverse that ruling.
It will likely take an act of Congress to get one.
Hope he gave a lot to his congressmans re election campaign.

 

[Tony]

The bottom line is....

I feel bad for all the racers who were sponsored by Torco and especially IHRA, who had a lot vested in Knoll and Torco Race Fuels. Now everyone is scrambling and things don't look good.

What a shame, I hope it all works out.

Tony

 

[luxexpress]

I know people that had a hard time proving different after the IRS told them they were dead !
The IRS is a burocracy first and since when was a burocrat always right.
I know a little about off road fuels and in the large venue of diesel you have red dyed non taxed diesel for non highway use and that which is used in cars and trucks [ highway use ]is taxed.
Racing fuel even though a minor player should definitely be exempt from road taxes and if Torco paid it in expecting a rebate after a ruling [ that never came or was ruled against him] then he has recourse of a hearing and show cause when the fuel is not intended for highway use.

Don't blame him for going on vacation waiting on the government for a hearing to reverse that ruling.
It will likely take an act of Congress to get one.
Hope he gave a lot to his congressmans re election campaign.

Well stated. I hope this gets sorted out soon. As a business owner, I know it is difficult and time consuming to get money back from the government, but God help you if you are late paying them.

 

[Bowtie]

Rob, you must have missed the line where it mentioned that the IRS officials said he was never entitled to the refunds in the first place.

I didn't miss that, but I am willing to bet that they can prove that when they bought all that fuel, they were taxed. And when they then blended it to racing fuel and because it was used in non street legal vehicles, they weren't required to charge taxes. So there for, they should be entitled to refunds because the fuel is for off-road vehicles. And obviously Chemical Bank had to look at the tax records and be satisfied themselves that everything was in order to approve a 15 million dollar loan, we are not talking about some car loan here. Not to mention, I personally have never been charged tax for any racing fuel I have purchased, no where on my receipt does it say taxes included in said price, but go to any gas pump, and the sticker is right there on the pump saying how much city, county, state, feds are charging you in taxes. And since when are government officials always right? They are humans, and subject to error. Hell, I even make mistakes, just don't tell my ex wife! LOL

 

[nedannouncer]

Hey Rob,

Your points are well made and well taken. I guess a few things anchor my belief that he's in a poop soufle.

1.) If the evidence of his innocence were as readily available or easy to prove as they logic you have laid out above, he wouldn't have pulled a Houdini and disappeared.

2.) The Federal Government (especially the IRS) isn't known for going on legal goose chases or for flailing blindly into matters like this. I'm guessing this thing has passed through about 15 layers of beaurocrats before landing on the desk of the guy that approved the raid. A college friend of mine works for the IRS in an investigative capacity and deals with stuff like this for a living. In asking him general questions on the matter (he's not involved in the investigation of Torco at all) he let me know that they had probably been lining their ducks up for close to a year leading up to the "visit" as Knoll's lawyer called it.

3.) The banking industry is no longer a place that can be viewed as being incredibly responsible or failure free. Yes, 15 million bucks is an astounding amount of money to loan somone, but with the current mortgage disaster, the same scenario of people being given huge sums (I'm a poor guy so a mortgage of a couple hundred K is huge to me) with little to no proof of income played it self out hundreds of thousands of times per year. If the bank was convinced that their loan was being (in some sense) backed by federal money, how could they lose? I guess we know now...

Rob, I respect your opinion and your points are logical. Maybe I'm just a cynical Yankee jerk. I know a man is innocent until proven guilty and nothing has been proven in stone here, but jeez, the evidence is mounting hot and heavy.

If you're right, I'll buy you a beer.

Brian

 

[Bowtie]

If you're right, I'll buy you a beer.

Brian

Agreed, and if your right, beer is on me. No hard feelings on this end, I enjoy good spirited conversations, and in the end, we are all entitled to our opinions and feelings.

Honestly, as I have stated before, I think he gave a lot of racers a chance to live out their dreams, dreams I wanted to live and won't be able to accomplish, in fact I am selling my car and trailer on craigslist as I type this. Was it handled wrong, Yes, should he be responsible to those people, yes if there are signed contracts. One thing my father taught me was, don't borrow money based on promises and spend money you don't have. And so I say to the teams that operated under verbal contracts, that's your bad.

I don't have an explanation as to why he is hiding, and agree it doesn't help him in any way shape or form.

As for the IRS, I know they don't go off with out a plan, but watching my dad go through a couple of audits in my life time, I have seen them show up with some pretty solid claims against him, and every time but one he put them in their place, and that one cost him about $3000.

As for the banks, yeah they don't make great decisions, but with 15 million on the line in one deal, you would think that the sphincter factor would be 10.0 and they wouldn't sign anything with out some kind of guarantee or something in writing from the IRS.

 

[davey]

Is he really hiding or is that speculation? I don't know so I'm just asking. If he is hiding it's not like they couldn't find him for pete's sake. If he hasn't been indicted he doesn't need to be around for anything. If he is indicted he will either come forward or they will locate him. I'm guessing he's just laying low while they conduct their investigation. There isn't really a reason for him to be around at this point.

 

[Bowtie]

Is he really hiding or is that speculation? I don't know so I'm just asking. If he is hiding it's not like they couldn't find him for pete's sake. If he hasn't been indicted he doesn't need to be around for anything. If he is indicted he will either come forward or they will locate him. I'm guessing he's just laying low while they conduct their investigation. There isn't really a reason for him to be around at this point.

My exact thoughts, I have yet to see any news report that states there is an arrest warrant, so that makes him free to go where ever he chooses.