An Independence woman and business owner has been indicted for alleged tax fraud.

Peggy Hennon, 55, of Independence, owner of Peggy’s Tow, was charged in federal court Tuesday in a four-count indictment for failing to report more than $1.2 million in business income on her tax returns.

According to court documents, Hennon allegedly under-reported the gross receipts from her business from 2007 to 2009 to reduce her income tax liability by $308,368.

Peggy’s Tow purchased vehicles as scrap and sold them to scrap yards in the Kansas City area. After they were sold, Hennon either deposited the check into one of her checking accounts or cashed the check at a gas station or bank.

The indictment alleges that Hennon reported only part of those gross receipts on her 2007, 2008 and 2009 federal tax returns. She allegedly cashed a majority of the checks from the scrap vehicle sales – 25 percent in 2007, 68 percent in 2008 and 98 percent in 2009. That allegedly added up to $1,232,363 that was not reported to the IRS in those years.

Hennon faces three charges of making false statements on tax returns and one count of attempting to interfere with the administration of internal revenue laws.

The indictment alleges that Hennon provided false expense records to IRS agents on three different occasions in 2012 and this year. They had been allegedly altered to show higher business costs than the expense records her accountant used to calculate expenses for 2008 and 2009 tax returns. The indictment alleges that in a majority of the changes, costs that involved a “1” were changed to a “4,” which then reduced her taxes by $163,857.