One of the main aspects of the IRS and state taxing authorities’ efforts to enforce compliance with tax laws focuses on the relationship between employers and the government. At both the federal and state level, employers are required to withhold, account for, and remit taxes from employees’ paychecks. As this story will illustrate, the government does not take kindly to businesses that fail to uphold their end of the legal requirements surrounding employee tax withholding.
Two Men Failed to Pay Over Payroll Taxes, Plead Guilty to Criminal Charges
According to a Department of Justice press release, Edward Cespedes, a resident of Ft. Lauderdale and Joseph DeSanto, a resident of Boca Raton, each recently pleaded guilty to charges associated with the failure to collect, account for, and pay over payroll taxes.
According to documents filed in court, Integrated HCS Practice Management LLC (hereafter referred to as “Integrated”) operated in Southfield, Michigan and it provided management services to various healthcare providers. Cespedes acted as Integrated’s managing partner and was a partial owner. In his role, he was responsible for Integrated’s payroll taxes, as well as the overall financial functions of Integrated. DeSanto also had a hand in the financial operations and payroll functions of Integrated thus is considered by the IRS as being responsible for payroll taxes.
Prosecutors from the Department of Justice allege that despite their responsibilities, Cespedes and DeSanto failed to cause Integrated to timely pay its payroll taxes to the IRS for the third quarter of 2013, the fourth quarter of 2013, and the first quarter of 2014. Additionally and unrelated to the operations of Integrated, DeSanto also pleaded guilty to one count of failure to file his personal tax return for 2013.
Sentencing is scheduled for early next year and each of the two men could face five years in prison for the payroll tax charge. Additionally, DeSanto could face up to an additional year in federal prison for failure to file his 2013 individual tax return. Cespedes and DeSanto will also each face a term of supervised release after their federal prison stint is up and each will likely be required to pay restitution to the IRS.
Understanding the Importance of Payroll Tax Compliance
As we mentioned earlier, the IRS and state taxing authorities do not take the failure to comply with payroll tax laws lightly. Such violations rank alongside tax evasion and failure to report overseas bank accounts in the IRS’ harshest prosecutions. If you are facing a payroll tax audit or your business is under scrutiny for other tax matters, it is in your best interest to contact a competent tax defense attorney as soon as possible.
Contact an Experienced Tax Attorney Today
Not only will a payroll tax defense attorney help you craft a defensible tax strategy, they will assist in ensuring that your legal rights are not violated in the investigatory process. The IRS and state taxing authorities commonly send their top dogs after payroll tax law offenders. A tax lawyer will help you keep your rights and ability to defend against the IRS or state tax authority intact.
The tax and accounting professionals at the Tax Law Offices of David W. Klasing have extensive experience representing taxpayers from all walks of life. Whether you are a small business owner or an individual that has received notice that your tax return is being examined, our team of zealous advocates is standing by to assist. Do not let the threat of criminal tax 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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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
