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Cigar maker in court tomorrow to prevent seizures by Feds

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Tomorrow, U.S. District Judge Joseph McKinley, Jr. will hear from Tantus Tobacco in the Bowling Green, Kentucky federal courthouse as to why the federal government should not seize the company's equipment to settle a $3 million federal tax bill. The U.S. Treasury Department wants to attach liens and/or seize the company's equipment, however Tantus claims they do not owe the $3 million as is being claimed and is seeking an injunction.

The cigar maker is based in Russell Springs, Kentucky and manufactures Red Buck, Millennium, Richwood Grooves, Golden Harvest branded cigars along with e-cigarettes and other tobacco products. The dispute rises from when the company paid over $182,000 in federal excise taxes since September, 2009, which the federal government says is not enough. Tantus has two companies, a manufacturing company and a sales company. Tantus sells its products to the sales company which in turn, sells the cigars to distributors, a sales model which was approved by the federal government. However, after approving of the way the company sells its product, the government came back and reversed its decision and subsequently audited the company to determine they owe over $3 million in taxes, interest and penalties from 2009 through 2011.

The company has been working to resolve the dispute with the Treasury Department, however they have not been able to come to an agreement. The last deal on the table was presented by Tantus for $1.3 million, however has yet to be accepted by the Treasury.

Mark Loyd, the attorney representing Tantus in the case said, “I think that this offer is not only a credible offer submitted for the purpose of resolving the pending Notices of Demand but also one that (the Treasury) should accept.”

Libertarians find such matters as government saying one thing and doing another to entrap business owners. To take it further the Libertarian Party's platform states, "A free and competitive market allocates resources in the most efficient manner. Each person has the right to offer goods and services to others on the free market. The only proper role of government in the economic realm is to protect property rights, adjudicate disputes, and provide a legal framework in which voluntary trade is protected. All efforts by government to redistribute wealth, or to control or manage trade, are improper in a free society."

Libertarians abhor what is happening to the tobacco industry by the government when the products they sell are taxed and treated differently than other legal products on the market. The high taxes also cause a "black market" to appear rather than the beneficial free market. It is the complex tax code which makes compliance so difficult for business owners to operate their businesses. The Libertarian Party's 2012 presidential nominee, Gary Johnson, was promoting the Fair Tax as a way to help individuals and businesses comply with the complex tax code and is seen as one of the easiest alternatives to what is in place now. Though most Libertarians would like to see federal taxes go away altogether, many find the Fair Tax an acceptable and fair transition.

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