APPLE VALLEY, MINNESOTA - Matthew Jade Carroll, CEO/Founder of Metro Duct Cleaners, a company operating out of Apple Valley, Minnesota, providing a taxable cleaning service to customers, has been charged for allegedly deducting personal expenses through his business. This prompted an investigation by the Minnesota Department of Revenue.

Investigators attempted to gather Carroll’s state income tax returns for 2017 through 2022 to find that he hadn’t filed income tax returns for 2021 or 2022. According to court documents, Carroll filed his 2017 state income tax return claiming state taxable income of $26,729, which investigators found to be under-reported by $30,505 from his gross receipts and overstating business expenses. When investigators recalculated, Carroll owed an additional $2,101 in income taxes, which remained unpaid.

Carroll filed his 2018 state tax return on April 10, 2019, claiming a taxable income of $10,115, which investigators found to be under-reported by $110,874 from his gross receipts and overstating business expenses. When investigators recalculated, Carroll owed an additional $7,423 in income taxes, which remained unpaid.

For his 2019 state tax return filed on November 20, 2021, he claimed a state taxable income of $0. After a review of his return and supporting documentation, investigators discovered that Carroll had yet again under-reported his business income on his personal return by $112,658 by under-reporting his gross receipts and overstating his business expenses. When investigators recalculated, Carroll owed an additional $6,272 in income taxes, which remained unpaid.

Carroll’s 2020 state income tax return was also filed on November 20, 2021, claiming a taxable income of $41,102. Investigators found that he had under-reported his business income on his personal return by $207,038 through under-reported gross receipts and overstating business expenses. When investigators recalculated, Carroll owed an additional $11,043 in income taxes, which remained unpaid.

Since Carroll failed to file a tax return for the years 2021 and 2022, investigators used income information that was available to them to prepare those returns for him. Carroll’s state taxable income was $231,944 and $288,891, respectively, and he owed $17,606 and $19,913, respectively. The latter remains unpaid.

As a business that provides a taxable service to others, Carroll was obligated to collect and remit sales tax and file returns. Sales and use taxes are filed with and paid to the Department of Revenue annually, quarterly, or monthly, depending upon the average amount collected. On the 20th day of the month following the end of the taxable period, taxes and sales tax returns are due. According to the criminal complaints, investigators determined that while Carroll had been filing the required sales and use tax returns for his business, he had stopped remitting sales and use taxes.

Carroll was required to file and remit quarterly sales taxes with the Department of Revenue. From 2018, 2019, and 2020, Carroll owed $1,028.48, $1,098.79, and $3,457.64, respectively. For 2021, Carroll failed to file returns for all months except January and February. But, based on the two, he did file, and the calculation by the investigators using Carroll’s financial records showed he owed $16,585.26. In 2022, Carroll failed to file returns for all months. Based on the investigator’s calculations, Carroll owed $24,599.63. All of these sales taxes remain unpaid.

Investigators met with Carroll to discuss his personal and business tax filings and past-due taxes. According to court papers, Carroll told investigators that he was the sole owner of his business and believed that his taxes were set up to be automatically paid. However, he found out later that those were for payroll taxes only. He also stated that he hired a CPA to review his tax information to get him current. Carroll admitted to investigators that the reason he fell behind on his fillings was because he had gone through a personally challenging time the past two years and screwed up. He also stated several times that he wanted to get caught up and take care of his liabilities sooner rather than later.

Carroll’s unpaid personal income taxes, unremitted sales taxes for the business, plus penalties and interest, total a state tax liability of $133,892.07.

According to the court documents, Matthew Jade Carroll is charged with:

• 4 Felony Counts of Filing a False or Fraudulent Tax Return
  Each felony count’s sentence being 0-5 years and/or $3,000 - $10,000

• 4 Felony Counts of Failure to File Tax Return (Willful Evasion)
  Each felony count’s sentence being 0-5 years and/or $3,000 - $10,000

• 12 Felony Counts of Failure to Pay Taxes (Willful Evasion)
  Each felony count’s sentence being 0-5 years and/or $3,000 - $10,000

We contacted the company to comment on these allegations but have not heard back from them.

Written by: Grace Patton

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