IRS Raids TGI Friday’s in Ongoing Tax Evasion Investigation

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Guam – The Internal Revenue Service is investigating Watami USA Guam for possible tax evasion. Watami operates the island’s 2 TGI Friday’s restaurants.

Federal agents executed a warrant last Wednesday morning at the offices of Watami, within the building that houses the TGI Friday’s Restaurant in Hagatna.

According to the returned  warrant filed with the District Court today [Monday], agents seized  employee records, sales receipts and other documents dating back to 2006.

READ the Search and Seizure Warrant    

In his affidavit filed in support of the search warrant,  IRS Agent Todd Peterson, states that “I am informed and allege that there exists probable cause to believe that now located at the two TGI Friday’s business locations are evidence and instrumentalities of criminal offenses against the United States.”

READ Todd Peterson’s Affidavit in support of search warrant

The statutory authority cited in the affidavit is Title 26, Section 7202 which refers to the “Willful failure to collect or pay over tax.”

Specifically, according to Peterson’s affidavit, the Service charge is automatically added to each guest check, rather than added voluntarily, an employer should include the service charges as part of gross receipts and add the amounts paid to an employee in the employees wage amount. But, Peterson states: “it does not appear that Watami reported a majority of  the service charges paid to its employees as wages and tips.”