A youthful attempt to party their way to popularity and some exaggerated MySpace boasting have turned into a $320,000 tax nightmare for five current and former University of Central Oklahoma students.
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“This is crazy,” said Julius Baroi, co-founder of Kegheadz, a loosely organized Edmond-based party business. “The Tax Commission claims we owe more than $300,000. We don't have enough money between us to pay $6,000 to hire an attorney. They won't listen to us.”
Paula Ross, spokesperson for the Oklahoma Tax Commission, said she couldn't comment on an individual taxpayer's case.
Although the Tax Commission wants to tax Kegheadz like a million-dollar business, Kegheadz was really just a group of college guys who got together to throw parties, said Baroi, 29, and co-founder Jordan Glover, 23.
Overall, Baroi estimates Kegheadz only netted about $1,700.
Tax officials got the wrong idea because of embellishments on the Kegheadz MySpace Web site that boasted things like “Over a billion served,” “Biggest party in the state,” and “Biggest party in the country,” Glover said.
But that was just “exaggerated hype” designed to create a buzz and attract people to the parties, Glover said.
The group threw 22 parties in Edmond and Oklahoma City in 2006 and the first half of 2007, Baroi said.
The goal was to meet college women and hopefully make enough money to pay their personal bar tabs, Glover said.
“It wasn't a career choice,” he said. “The goal was to have fun in college. Being a cool guy was the main objective.... You'd think they could tell we weren't masterminds. We were just college students having fun and acting stupid.”
Baroi said his group operated Kegheadz by going to Edmond and Oklahoma City restaurants and businesses and persuading them to host college parties. Off- duty law enforcement officers were hired to provide security and prevent problems, he said.
Men were charged a $5 cover charge. Women were let in free.
“If a guy brought three or four girls, we'd let him in free, too,” Glover said.
Kegheadz paid building owners $100 to $800 from the cover charge and a disc jockey was paid $50 to $200. The building owner got to keep money received from bar sales. If there was money left over from the cover charge at the end of the night, it was split among the Kegheadz friends who had promoted the event, Baroi said.
He said from 60 to 275 people showed up for the 22 parties Kegheadz promoted. Baroi said he made a few hundred dollars on some events and lost money on others.
He said they never really thought about Kegheadz as a business, so they never filed any paperwork with tax officials.
“We're not denying that we threw parties and probably owe the Tax Commission something,” Baroi said.
But $320,000?
“That's ridiculous,” Glover said.
How did the Tax Commission arrive at such a high figure?
Baroi and Glover said when they met with tax officials, they were shown a huge stack of evidence that appeared to be page after page printed off the Kegheadz' MySpace Web site.
In the absence of business records, Tax Commission auditors apparently built their tax case around the statements made on the MySpace site, one of several Internet social networking sites the students used to promote their parties, Baroi said.
The former students said they were just having fun. Embellishing on social networking sites by college students is pretty much the norm, they said.
“People thought we were a lot bigger status than we were and we enjoyed people thinking that,” Glover said.
They just don't enjoy tax officials thinking that.
Documents given to the students by tax officials indicate auditors concluded Kegheadz hosted 108 events over a 4.5-year period and that their average paid attendance was 675.
Auditors estimated they had $919,506 in mixed beverage sales, from which they would owe $162,832 in mixed beverage tax, penalties and interest.
The Tax Commission also is trying to assess them $155,294 for sales tax, penalties and interest and $1,856 for tourism tax, penalties and interest.
Baroi said none of that makes any sense.
Kegheadz never received any money from mixed beverage sales, he said. That revenue went to venue operators.
The group only held 22 parties and never had close to 675 people attend any of them, Baroi said. That's counting women, who got in free, he said.
Baroi said Kegheadz stopped hosting parties after some of their later ones lost money.
An April 2007 party planned for the Oklahoma City Farmers Market turned into a disaster when the disc jockey couldn't get the sound system to work, and a November 2006 party at Midsouth Pro Wrestling went south when it was raided by the state Alcoholic Beverage Laws Enforcement Commission and Oklahoma City police, Baroi said.
Businessman Mike Crawford, 38, said all he did was sublease the Midsouth Pro Wrestling building to Kegheadz three times and now the Tax Commission is claiming he was part of Kegheadz and should share in the disputed $320,000 tax liability.
Baroi said Kegheadz was originally scheduled to argue its tax case Sept. 24, but has been given a delay until the last week in October.
“I think common sense will prevail,” Glover said. “But if there's any attorney out there who remembers what it was like in college and wants to give us some free help, we could sure use it.”
Glynda Chu, spokeswoman for the Edmond Police Department, said she didn't specifically remember Kegheadz, but college parties like the ones they hosted used to be a problem in Edmond because they often involved underage drinking. The parties dried up after Edmond adopted a social host ordinance and began arresting adults at parties where underage drinking was found, she said.
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this is awesome. Now the "kids" are probably regretting all of their stupid moves. That happens in a "reality television" world doesn't it? All of the stupid pics on Myspace, this is awesome
Jess & V. Do you know for a fact that the OTC was just "surfing" MySpace? It sounds like you two have all the facts and answers to this whole fraudulent mess. Maybe the two of you should be appointed to the OTC. I'm sure the two you would do the State of Oklahoma proud. As for all of you who say they are embarrased to be an okie and/or to live in this state because of this one little incident that is getting blown totally out of proportion. Move. The State of Oklahoma would be better off without you. Proud to be an American and live in the State of Oklahoma. And by the way V, I'm not an idiot.
David - Altus - living where you do, you should know that military personnel who are stationed in another state are legally able to keep their home state tags. Now the "1000" tags you refer to probably aren't all military, but being in Altus, I bet many of them are.
Yeah Brandon I saw that on channel 4 last night. Sounds like the local media is supporting kegheads nicely. They should have a live broadcast from their courtroom on nov. 4th. It would be AWESOME.
Yeah Brandon I saw that on channel 4 last night. Sounds like the local media is supporting kegheads nicely. They should have a live broadcast from their courtroom on nov. 4th. It would be AWESOME.
I think any decent attorney can win 90% of this case against the tax commission. Like that tax attorney on Channel 4 was saying last night...kegheadz needs to bring out the venue owners and other witnesses to their court hearing. Owners, bartenders, bouncers, cops whoever worked at those parties.
OTC says 5 years, 108 parties, 675 people average & sold alcohol. Kegheadz says 18 months, 22 parties, 250 average and never sold alcohol. Quite a difference in numbers there!!! Also, there's that person Mike Crawford in it that says he was never a part of Kegheadz! I really wanna see what happens at the end.
Hardly a day goes by where I don't get an e-mail telling me I've won a bazillion dollars from some African lottery, an heir ,or a U.S Captain in the armed forces. I bet I'm not the only big winner. I also bet members of the Tax Commission are also big winners. Time for them to pay up.
first, Jess... it's not "assuming" when you know for a fact what went down. these are the same guys that are mid to late 20's still trying to pick up H.S. girls. that is just sad. i do know these people personally and i know how and what they are about, so it's not "jealousy"... it's more of a frustration from a christian standpoint. no they aren't the only reason and only place that people can drink... so it's not on them totally, but other places provide a better way to keep underage drinking from happening...these guys just don't care. you say "enjoy yourself", so does that mean getting drunk, sleeping with strangers, then driving home? that is not my sort of thing seeing as i'm a christian. i've been married for a while now and my perspective on life has changed the older i get. i don't think they should be on the hook for that large sum of money, but they should be held accountable for their actions.
Nathan, you have no way to assume anything about these guys or their parties. You weren't at them and obviously from the jealous tone, you were probably at home... alone. You can't put the blame of every drunk driver or college party on these guys. They are small fish! Making an "example" of these guys isn't going to solve underage drinking, sex or drinking and driving. So stop whining like a sissy, get out and enjoy yourself for once.
D, Choctaw: whoever taught you your "common sense" did you a disservice. They handed you a bag crap, and I'd demand a refund.
Nathan, Edmond: your tiresome prattle is the typical fare on display from the greasy pulpits of Southern Baptist wowsers everywhere. Grow up.
Nathan: I detect a little bit of jealousy in your post. Maybe you should get out and mingle a little and you may find a lady friend. Don't be jealous because these guys are getting the women. Now get out there and find you a girl. I know if you try will will find one.
megan in newalla: i'm glad the local H.S. got out in time for you to post your "insight" to all of this. i'm glad your "sweetheart" of a friend enabled underage drinking and young people the opportunity to drive drunk for a fee. i'm glad he did it "legally" and didn't stoop to paying women for sex... wait, that's right! hopefully they were all of "age" or you have a whole other crime on your hands. like i said, these guys are schmucks who prey on "drunk chicks" to even stand a chance...sad.
Jason, Edmond. I do not work for the Tax Commission or any other state office. And I don't have any personal acquaintances who work for the Tax Commission. I just used a little common sense that's all.
I know one of these boys! and he is a sweetheart! I went to elementry school and yall are trying to make them out to be bad people and i dont know the others but i have been to the partys! They were fun! But mostly just people that were getting together i know that they didnt make money! they did it to have fun! and whats the difference in what they did and if i know a friend that has a business and i have done this before and i just wrote on my myspace and facebook to come check it out on a certain date to help him get more business! Should i get fined bc i told a couple people to come hangout! and did a little advertising for him!???
julius was always a little weasel in high school too. i can definately understand why guys like them have to "pay" for their women. based on the picture alone you can bet that we will see most of their faces on here again under the title, "former members of kegheadz arrested for solicitation of undercover police police officer". i'd say prosecute them and get as much as you can from them. i wonder how many accidents they contributed too by throwing these parties? how many underage girls they "hung out" with after getting them drunk? i really can't stand people like this.
Kegheadz co-founders Jordan Glover (in the Kegheadz Army shirt) and Julius Baroi (in the white shirt behind Glover) posed for a picture with several of their Kegheadz promoters, disc jockeys and friends at a Halloween party called "Insanity 2006.” PHOTO PROVIDED
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Nathan, Edmond: your tiresome prattle is the typical fare on display from the greasy pulpits of Southern Baptist wowsers everywhere. Grow up.