According to a Department of Justice press release, a Kansas woman was recently sentenced to federal prison after being convicted in connection to employment tax crimes. This story highlights the importance that the federal government places on complying with taxes relating to payroll. If you have failed to properly withhold, account for, and pay over-employment taxes, you should strongly consider consulting with an experienced employment tax defense attorney to determine the extent of your risk and to come up with a roadmap to come into tax compliance.
Defendant Failed to Pay Over Millions in Withholdings
Court records reveal Sheryl Clanton of Bucyrus, Kansas, owned and operated three construction firms: McCorkendale Construction Inc., McClan Construction LLC, and NJ Trenching LLC. As president of McCorkendale from 2006 to 2011, Clanton was responsible for filing quarterly employment tax returns and remitting withheld taxes to the IRS. However, she failed to remit approximately $980,000 in employee withholdings during part of this period. After facing tax debts and a bank mortgage foreclosure at McCorkendale, Clanton started McClan Construction in 2011. At McClan, she again neglected to pay over around $1.1 million in employment taxes and did not file required quarterly payroll tax returns from 2012 to 2017. Additionally, at her third business, NJ Trenching, Clanton failed to report or pay nearly $100,000 in employment taxes from 2012 to 2015.
Clanton’s actions ultimately led to her being sentenced to two years in prison. Furthermore, was ordered to serve three years of supervised release and pay $2,223,174.41 in restitution to the United States.
The Importance of Complying with Employment Tax Laws
As evidenced by the story above, the federal government taxes compliance with employment tax laws very seriously. The IRS generates the majority of its tax revenue from withholding taxes from employees’ paychecks. Thus, it should come as no surprise that those who fail to follow laws related to that process are investigated and prosecuted vigorously.
Employers are required to withhold, account for, and pay over amounts withheld from employees’ paychecks. Depending on the circumstances, the business owner or anyone who is responsible for paying employees (whether they are an owner or not) are civilly and criminally responsible for failing to comply with federal employment tax laws. If you or your employees have not complied with these laws, an experienced tax defense lawyer can help. Together, you and your seasoned tax attorney will determine the important facts of your case and determine the best strategy to move forward in bringing you into compliance.
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 fully staffed main office in downtown Irvine California, the Tax Law Offices of David W. Klasing has unstaffed (conference room only) California based satellite offices in Los Angeles, San Bernardino, Santa Barbara, Panorama City, Oxnard, San Diego, Bakersfield, San Jose, San Francisco, Oakland, Carlsbad,Sacramento. We also have unstaffed (conference room only) satellite offices in Las Vegas Nevada, Salt Lake City Utah, Phoenix Arizona & Albuquerque New Mexico, Austin Texas, Washington DC, Miami Florida and New York New York that solely handle Federal & California Tax issues.
Our office technology allows clients to meet virtually via GoToMeeting. With end-to-end encryption, strong 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. We also now offer a convenient scheduling option, where you can secure David W. Klasing, Esq M.S.-Tax CPA’s undivided attention for a 4-hour consultation at any of his satellite offices.
Employment Tax Representation
Failing to pay overback payroll taxes after notice has been given
Criminal Exposure for failing to pay over back payroll taxes after notice has been given
What penalties can be imposed for failure to pay employment taxes
How are payments of unpaid employment taxes allocated once the trust fund recovery penalty has been
We can help Employment Tax
What is a wage according to the IRS
Trust Fund Recovery Penalty
Worker classification audits, IRS, EDD or FTB
https://www.youtube.com/watch?v=yw8Sd61HUrs&t=22s
See our Employment Tax Law Q and A Library
