According to a Department of Justice press release, a woman from Michigan was convicted of scheming to intentionally obstruct the due administration of the internal revenue laws. This story is illustrative of the harm that can be caused by attempting to go up against the IRS without obtaining legal advice from a competent tax defense attorney.
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A federal jury convicted Gerri Avery, of Flint, Michigan, on tax-related charges stemming from her behavior while working for HCS Practice Management (HCS). HCS, operating out of Southfield, Michigan, failed to withhold, account for, and pay over payroll taxes for three consecutive quarters, beginning in the third quarter of 2013. While investigating the case, IRS Revenue Officers interviewed Avery about her involvement in the payroll tax process. During her interviews with the IRS, Avery falsely downplayed her involvement in the payroll tax process and lied to the Revenue Agent about her ability to access HCS’s financial data, such as bank statements.
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One of HCS’s owners, Joseph DeSanto, pleaded guilty for his role in failing to collect, account for, and pay over payroll taxes. Additionally, he pleaded guilty for failing to file his personal tax return in 2013.
Avery will be sentenced on December 4th and faces up to three years in a federal prison. She will likely be sentenced to an additional term of supervised release. Finally, Avery may be ordered to pay restitution to the IRS.
We have stressed in prior blog postings that the IRS and state taxing authorities do not take payroll tax compliance lightly. As demonstrated in this case, Avery, a non-owner employee of the company, was charged with a federal crime because she was untruthful about her role and access at HCS.
Whether you are an owner of a business or simply work in a role that deals with payroll tax, it is critical to understand the importance of payroll tax compliance. As Mrs. Avery has learned in this case, the government will attempt to prosecute anyone that it can when payroll tax violations occur. If you believe that your business has fallen out of compliance with its payroll tax obligations, it is in your best interest to contact an experienced tax attorney as soon as possible.
The tax and accounting professionals at the Tax Law Offices of David W. Klasing have worked with business owners of companies ranging in size from large to small. If you have received notice from the IRS or state taxing authorities that your payroll tax withholding, accounting, and remittance procedures are being scrutinized, our team of zealous advocates will help you develop a legal strategy aimed at preserving the integrity of you and you business. Do not let the threat of a criminal investigation or prosecution keep you up at night. Contact the Tax Law Offices of David W. Klasing today for a reduced-rate consultation.
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