OKLAHOMA CITY – A group of college students who boasted about their keg parties on a MySpace page clashed with state tax officials in a hearing over tens of thousands of dollars in tax assessments the state is seeking.
Kegheadz, a loosely organized party business formed by University of Central Oklahoma students, requested Tuesday's hearing. Tax officials have acknowledged they calculated the tax assessments based on information from MySpace and other social networking sites on the Internet, where the students made claims like "Over a billion served," and "Biggest party in the country."
The co-founders initially were hit with $320,000 in tax bills after helping promote and host nearly two dozen parties at several metro businesses in 2006 and 2007.
The tax assessments later were reduced to about $43,000, but co-founders Julius Baroi and Jordan Glover testified Tuesday that is still way more than they made.
The pair testified they netted about $1,700 from the party business they promoted with exaggerated hype on MySpace and other Web sites.
Tax Commission auditor Marilee Savage and supervisor Janine McConville testified they were forced to rely on information from the Web site, from an Alcoholic Beverage Laws Commission raid on one of the parties and a business card to come up with a tax assessment because Kegheadz participants kept no records.
Among other things, tax officials initially billed the group for $162,832 in mixed beverage taxes, even though Kegheadz participants testified that the restaurants and businesses where the parties were held got all that money and the only money they made was from a $5 door charge to men who attended. Women were let in free, they said.
Savage testified she didn't know if a MySpace Web page had ever previously been used in an Oklahoma tax audit.
State Rep. Joe Dorman, D-Rush Springs, sat through Tuesday's hearing and later said he was "thoroughly disgusted with the waste of taxpayers' dollars I saw today."
"From everything I've seen, all this warranted was a slap on the wrist and people being brought in so they could show them the proper way to run a business," he said.
Dorman said he was particularly upset at the exclusion of sworn statements that showed Kegheadz made no money from alcohol sales.
Dorman plans to meet with Tax Commission officials to review auditing procedures.
Administrative Law Judge Kris Kasper indicated it will be several weeks before he rules on the case.