According to a Department of Justice press release, a Colorado man has been sentenced to 15 months in prison for evading over $700,000 in employment taxes owed to the IRS. This event underscores the significant legal ramifications that can result from tax-related offenses. If you have failed to comply with employment tax laws or have failed to file a tax return for one or more years, it is in your best interest to contact an experienced tax defense attorney to help bring you back into tax compliance.
Employment Taxes Went Unpaid and Levied Account Balances Were Kept Low
Court documents reveal that Frank Stevens of Bow Mar, Colorado, co-owned several restaurants and an oil production business. His businesses had employees from whose paychecks Stevens withheld income and Social Security and Medicare taxes. Beginning in 2002 and spanning several years, Stevens neglected to pay the withheld payroll taxes to the IRS or file the required quarterly employment tax returns for any of his businesses. After unsuccessful attempts to collect from the businesses, the IRS assessed the tax against Stevens personally. To prevent IRS collections through bank levies, Stevens maintained low balances in his personal and business bank accounts, often as low as a penny. He transferred, or directed employees to transfer, just enough funds to cover expenses, then moved any remaining money to a bank account not subject to the IRS levy. The government estimated that Stevens’ actions resulted in a tax loss of approximately $737,128.
In addition to the prison term, U.S. District Judge Daniel Domenico has ordered Stevens to serve three years of supervised release and to pay a $10,000 fine and $1,096,138.14 in restitution to the United States.
Recognizing the Need for an Experienced Tax Attorney
The prison sentence and monetary penalties levied against Stevens serve as a stark reminder of the importance of consulting with experienced legal counsel at the onset of potential tax troubles. The U.S. government gains most of its tax revenue through employer withholdings, and as such, the IRS and Department of Justice is particularly sensitive about employment tax law noncompliance.
If you find yourself out of employment tax compliance or having unfiled corporate or personal tax returns, you should consider contacting a seasoned tax attorney before the IRS opens an audit or begins an investigation. Together, you and your experienced tax counsel will work to determine the pertinent facts of your case and will develop a roadmap to bring you into tax compliance.
We Are Here for You
Regardless of your business or estate needs, the professionals at the Tax Law Offices of David W. Klasing are here for you. We are open for business and our team will help ensure that your business is too. Contact the Law Offices of David W. Klasing today to discuss your business with one of our professionals.
In addition to our main office in Irvine, the Tax Law Offices of David W. Klasing has unstaffed (conference room only) satellite offices in Los Angeles, San Bernardino, Santa Barbara, Panorama City, Oxnard, San Diego, Bakersfield, San Jose, San Francisco, Oakland, Carlsbad and Sacramento.
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Questions About Delinquent Payroll Taxes and Trust Fund Recovery Penalty
- What happens if an employer continues to incur new payroll tax liabilities?
- California Employment Taxes Basics
- How Does the IRS Develop an Employment Tax Fraud Case from the First Indication of Fraud to a Criminal Indictment?
- Can more than one person be considered responsible by IRS
- How unpaid employment tax payments are allocated
- When a corporate officer is considered a responsible party
- Examples of trust fund recovery penalty determinations
- Failing to pay employment taxes after notice is given
- How to determine responsible person for trust fund recovery
- Assessing trust fund recovery penalty and option to appeal
- What is the trust fund recovery penalty?
- What are the penalties for failure to pay employment taxes
- When am I considered liable for company’s employment taxes
