Dog breeder accused of tax fraud

A Hanska dog breeder is accused of evading state taxes for three years by selling puppies for cash and neglecting to report sales on her tax returns.

Jana Marie Makela, 45, was charged with three felony counts of Fraudulent Income Tax Returns, three felony counts of Failure to Pay or Collect Income Tax, three felony counts of Fraudulent Sales Tax Returns, and three felony counts of Failure to Pay or Collect Sales Tax.

According to a criminal complaint:

Makela and her daughter, Brooke Makela run BrookeMarie’s Goldendoodle Love, a dog breeding business based in Hanska.  The Minnesota Department of Revenue began an investigation into the business for alleged tax violations in March 2022.

Investigators say the Makelas were claiming fewer puppies than they were actually selling and accepting only cash.

A preliminary investigation showed that Jana Makela had filed false or fraudulent returns for 2019 to 2021.  Investigators also found that both Brooke, and Jana’s husband, Lane, were filing tax forms for income earned on the business, which is registered as a sole proprietor business with Jana as the owner.

A Facebook page for BrookeMarie’s Goldendoodle Love showed the business had 10 litters with a total of 86 puppies for sale in 2020.  In 2021, the business had 13 litters, with a total of 102 puppies.  A website for the business priced the puppies between $2,500 and $3,500 each.  The website listing also included a disclaimer that Minnesota residents were required to pay a 7% sales tax.

Puppy sales for 2019 through 2021 were calculated by investigators through a review of bank and PayPal accounts belonging to Jana, Lane, and Brooke Makela.  During those years, Jana Makela failed to report $249.812 in income on her joint income tax return with her husband.  She also failed to pay $29,957.58 in sales tax.  Because of her failure to report additional income, she also owes $20,842.80 in income tax and penalties.