According to a Department of Justice press release, a Denver businessman was recently indicted on employment tax fraud charges. Mandatory payroll withholding and other obligations placed on business owners and their employees remains among the most enforced areas of the income tax system. If you have failed to properly withhold, account for, and pay over employment taxes, it is in your best interest to contact an experienced employment tax defense attorney to develop a customized plan to come into tax compliance.
Defendant Accused of Employment Tax Law Violations, Among Others
Court records reveal that Frank Stevens was the owner and operator of Stevens & Soldwisch Oil and Gas Properties I LLC as well as Northeastern Energy Corporation. Stevens employed individuals to extract oil from the field that his companies owned. Prosecutors allege that between 2014 and 2015, Stevens properly withheld employment taxes from the paychecks of his employees but failed to pay those taxes over to the IRS. Department of Justice prosecutors also allege that Stevens evaded the payment of his own taxes by transferring income out of his and his business’s names via a crime known as evasion of payment. Lastly, the IRS alleges that Stevens failed to file annual tax returns for his companies for one or more years. The government alleges that Stevens has caused a tax loss of more than $700,000.
If he is convicted, Stevens could face a federal prison sentence of up to five years for each count of tax evasion and each count of failing to pay over employment taxes. Further, he could face up to one year in prison for each count of failing to file a tax return. Additionally, Stevens may be sentenced to serve a period of supervised release upon the completion of his physical incarceration. Lastly, if Stevens is convicted, he will likely be ordered to pay restitution to the IRS, representing the tax loss that he caused.
Coming into Employment Tax Compliance Once You’ve Fallen Behind
The IRS and Department of Justice have always recognized the importance of enforcing employment-related tax obligations. For most Americans, the lion’s share of our tax obligations is paid through paycheck withholdings. Employers is required by federal and state law to withhold income taxes, legally performs as a fiduciary regarding those funds until they are remitted to the IRS or state tax authority, respectively. Thus, business owners or those responsible for the payroll function find themselves in hot water when tax withholdings are misappropriated even when used to pay valid creditors of a struggling business.
The good news is that if you have fallen behind on your obligations to pay over employment tax withholdings, there are methods and strategies that can be employed to bring you into compliance and avoid criminal tax prosecution. The first step to resolution is to work with an experienced tax defense attorney. Together, you will pinpoint the areas of exposure and develop a strategy to address them. One of the best parts of being represented by a seasoned tax attorney is never needing to go up against the IRS alone.
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. During the COVID-19 pandemic, our staff are working from home, but have full virtual meeting capability.
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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
