A Diamond Springs couple surrendered to Franchise Tax Board special investigators today on four felony charges of state income tax evasion, the Franchise Tax Board (FTB) announced.
Emilio Rubalcaba, Jr., 73, and Dora Lee Velasquez, 57, operated two painting businesses, American Eagle Painting and Eagle Painting Company. According to investigators, Rubalcaba and his spouse, Velasquez, allegedly failed to file their 2001 - 2004 state income tax returns and failed to report the more than $547,000 in taxable income they earned from the two painting companies.
The couple owes the state more than $29,000 in unpaid tax. Interest, penalties, and the cost of the investigation will be added to this amount. Each count carries a maximum term of three years in state prison.
The failure to file tax returns and underreporting income are part of the $6.5 billion tax gap the state faces. The tax gap is the difference between the tax that is due and the tax that is paid.
The case was discovered through FTB's internal collections process.
Rubalcaba and Velasquez were booked into the El Dorado County Jail. Bail has been set at $15,000 each. Their next court appearance has not been set.
They provide painting services to local restaurants and work as subcontractors for other general contractors. Velasquez was sole owner of Eagle Painting Company, which she closed in 2003. Rubalcaba then opened his painting business, American Eagle Painting.
El Dorado County District Assistant District Attorney Richard Jones is prosecuting the case.