According to a Department of Justice press release, a Kansas business owner was recently sentenced to a year and a day in federal prison after being convicted of federal payroll tax crimes. This story should serve as a reminder to business owners and those responsible for payroll functions that the IRS and Department of Justice take compliance with requirements to withhold, account for, and remit those taxes very seriously. If you have fallen out of payroll tax compliance, it is in your best interest to contact an experienced tax defense attorney to develop a strategy to get you right with the government.
Defendant Withheld Taxes from Employees’ Paychecks but Failed to Pay Funds Over
Court records reveal that Lance Ashley was the owner and operator of Ashley Home Care Services. Ashley’s company provided daily living services to clients in the Overland Park, Kansas area. Between 2013 and 2016, Ashley caused hundreds of thousands of dollars to be withheld from the paychecks of his employees but failed to remit any of those withheld taxes to the IRS. Instead, Ashley used the funds to pay business and personal expenses.
When the IRS began collection efforts, Ashley took affirmative steps to thwart IRS collection efforts. For instance, Ashley provided false bank account information and transitioned the operations of his existing business to a newly created operating entity to obscure the business’s operating income.
In addition to being sentenced to a year and a day in prison, Ashley was ordered to serve two years of supervised release to commence upon the completion of his physical incarceration. He was also ordered to pay over $300,000 in restitution to the IRS, representing the amount of tax loss that he caused.
Understanding the Importance of Payroll Tax Compliance
Business owners and those responsible for payroll functions are required by federal law to withhold, account for, and pay over taxes from the paychecks of employees. Failure to do so can result in enforcement actions by the IRS, and civil and criminal penalties. Luckily for those who may find themselves out of payroll tax compliance, there are various programs and strategies to help taxpayers come back into compliance.
If you have failed to properly withhold, account for, or remit payroll taxes, or if you have failed to file a tax return altogether, you should discuss your case with an experienced tax defense attorney as soon as possible. Together, you will work to understand the pertinent facts of your case. Then, you will jointly decide on a path forward, keeping your physical and financial freedom top of mind.
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.
Our office technology allows clients to meet virtually via GoToMeeting. With end-to-end encryption, h3 passwords, and top-rated reliability, no one is messing with your meeting. To schedule a reduced-rate initial consultation via GoToMeeting follow this link. Call our office and request a GoToMeeting if you are an existing client.
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
