According to a Department of Justice press release, a California businessman recently pleaded guilty to committing employment tax crimes after failing to remit withheld employment taxes. The IRS and Department of Justice are particularly sensitive about the withholding, accounting for, and remitting of payroll taxes. If you have failed to strictly comply with federal payroll tax laws, it is in your best interest to contact an experienced tax defense attorney to determine your potential exposure and determine a strategy to bring you into compliance.
Defendant Admitted to Violating Payroll Tax Laws, Faces Prison Time
If you recall from our previous reporting of this story, Larry Kudsk, of Berkeley, was the owner and operator of two construction businesses. Between 2015 and 2016, federal prosecutors alleged that the defendant failed to properly pay over federal income taxes that were withheld from his employees’ paychecks. The IRS and federal prosecutors estimate the defendant allegedly caused more than $250,000 of tax loss.
Kudsk’s sentencing has been scheduled for later this year. Kudsk faces up to five years in federal prison. Additionally, Kudsk may be ordered to serve a period of supervised release, to commence upon the completion of any term of physical imprisonment. Finally, the defendant will likely be ordered to pay restitution, representing the total amount of tax loss caused.
Coming Into Payroll Tax Compliance After Falling Behind
U.S. employers are required by federal tax law to withhold certain taxes from the paychecks of their employees. Deductions from the paychecks of American workers serve as the largest single source of tax revenue for the IRS. Thus, it should be no surprise that the IRS and the Department of Justice take violations of laws surrounding payroll tax withholding, accounting, and remittance incredibly seriously.
If you have failed to comply with payroll tax laws, failed to file a business or individual income tax return for one or more years, or have filed a false tax return containing understated income or overstated deductions, it is in your best interest to consult with an experienced tax defense attorney. Working together, you will establish the critical facts of your case. Then, you will mutually agree on the next steps to bring you into tax compliance while attempting to minimize civil and criminal repercussions commonly observed in serious tax disputes.
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
