According to a Department of Justice press release, a North Carolina woman was recently convicted of employment tax fraud after withholding payroll taxes from the paychecks of employees, but failed to pay over such amounts to the IRS, as required by federal law. This story is another example of a life-changing criminal tax prosecution resulting from willful employment tax non-compliance. If you own a business or are responsible for the payroll function of a business, it is critical that you ensure that you are in compliance with employment tax laws. If you believe that your business may have fallen out of compliance, you should contact an experienced employment tax defense attorney to determine the best strategy to bring you back into compliance.
Defendant Caused Taxes to Be Withheld, But Spent Funds on Bonuses
Court records reveal that Christina Rochelle Anglin was the Chief Financial Officer at Atmospheric Technology Services Company, based in Norman, Oklahoma. As a part of her position’s responsibilities, Anglin oversaw the withholding of payroll taxes from the wages of the company’s employees’ paychecks. Federal prosecutors allege that between the first quarter through the third quarter of 2018, Anglin was responsible for the company not paying over approximately $920,000 in taxes that had been withheld from employees’ paychecks. During the same period, the defendant approved bonuses for herself and for other high-ranking employees of the company totaling thousands of dollars.
Anglin’s sentencing hearing has not yet been set. She faces up to five years in prisonfor each count of employment tax fraud. Additionally, the defendant may be sentenced to serve up a period of supervised release, commencing upon the completion of any physical incarceration. Lastly, Anglin will likely be ordered to pay restitution to the IRS, representing the amount of tax loss that she caused.
Coming Into Payroll Tax Compliance After Getting Behind
Although the majority of businesses abide by employment tax laws, there are situations where a company will fall out of compliance either by accident or by intentional act. In either event, the repercussions for falling out of employment tax compliance can be incredibly severe. As illustrated by the prosecution outlined in the story above, it does not take years of misappropriated payroll withholdings to result in a criminal tax investigation or prosecution. Likewise, the IRS and Department of Justice are not only targeting those schemes involving millions of dollars. When it comes to employment tax compliance, all taxpayers are expected to follow the law.
If you own your own business or are responsible for the payroll tax function at a company and believe that certain amounts withheld from employees’ paychecks were not accurately accounted for or remitted, or if you believe that your company pays staff who are labeled independent contractors but are actually employees subject to payroll tax withholding, you should consult with an experienced tax defense attorney to determine your potential exposure. Working with a seasoned tax lawyer, you will establish the pertinent facts of your case and jointly establish a path to getting right with the government. All the while, you won’t have to go up against the IRS or Department of Justice 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
