IRS Says Menards Owes Back Taxes

By: January 21, 2005
By: January 21, 2005

The I-R-S says the Menard home improvement chain owes nearly six (M) million dollars in back taxes and penalties.

A judge ruled last fall that Menard overpaid owner John Menard by more than 13 (M) million dollars in 1998. She said only about seven (M) million of the 20 (M) million paid to John Menard should count as salary, the rest should be a dividend. Menard paid taxes on the entire sum and the company deducted it all as a business expense. Dividends are not deductible as a business expense, while salaries are.

The I-R-S has calculated that Menard owes nearly six (M) million dollars as a result of the ruling.

John Menard started the business in 1962 and now has about 200 stores in ten Midwestern states. The corporation is headquarted in Eau Claire.

Calls to Menards Corporate offices were not immediately returned.

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