Oklahoma Tax Commission lowers party group’s bill

EDMOND, Okla. — A student-run party business that received a $320,000 tax bill after boasting on the Internet “over a billion served” and “biggest party in the country” will now have to pay only $2,300.

Oklahoma Tax Commission auditors based the original bill on claims the group Kegheadz made on its MySpace page, but members said those claims were wildly exaggerated and intended to drum up new business.

Kegheadz members say they promoted parties hosted by restaurants and businesses, which handled all drink sales. The group of University of Central Oklahoma students promoted the parties through social networking sites and word of mouth, charging men a $5 cover charge and admitting women for free.

Kegheadz founders Julius Baroi and Jordan Glover, who confirmed this week that the bill was reduced, said they are satisfied with the outcome but unhappy with what they have gone through.

“I mean, how crazy was this case?” Baroi said. “I don’t know which would be considered stupid … us bragging about parties on MySpace and Facebook, or OTC using those as ‘evidence’ to assess $320,000 worth of taxes.”

Glover said he would like to know how much money the tax commission spent pursuing the case over the past year and a half.

“You’ve got to be talking tens of thousand of dollars here … just to settle for a scrap of what they originally went for,” he said.

Paula Ross, spokeswoman for the tax commission, said she couldn’t comment on individual tax cases. Commission auditors testified during a tax hearing that they were forced to rely on information from Kegheadz’ MySpace page because the group kept no business records.

Though the commission received criticism for relying on information from a social networking site to help calculate a tax assessment, Ross said the agency has “not changed any policies due to the case.”

State Rep. Joe Dorman, who criticized the tax commission’s earlier handling of the case, said Tuesday he thinks the final settlement is much fairer.

Dorman said he talked with state tax officials, who told him they would be “much more careful” in the future about how they interpret data from social networking sites.

“On the flip side, people need to be careful and need to know there are people out there watching,” he said.