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Maryland Business Owner Pleads Guilty to Employment and Sales Tax Crimes

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Maryland Business Owner Pleads Guilty to Employment and Sales Tax Crimes

According to a Department of Justice press release, a Maryland business owner recently pleaded guilty on criminal counts related to failing to pay over millions of dollars in employment and sales taxes. This story should serve as a reminder to business owners who are non-compliant with tax obligations, that the IRS and state tax authorities will eventually catch up with you and if you wait until the case becomes criminal, the repercussions will likely be extremely unpleasant.

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Defendant Withheld Payroll Taxes and Used Them for His Own Benefit

Court documents reveal that Steve Choi was the owner and operator of several companies that provided food and food services within government buildings in the Washington, D.C. area. From 2012 through 2015, IRS Criminal Investigation and DOJ prosecutors alleged that Choi failed to pay over taxes that he had withheld from his employees paychecks, as required by law. Additionally, prosecutors alleged that Choi failed to pay over more than $6 million of sales tax that was collected in his food service operations.

Employers are required by federal law to withhold, account for, and pay over payroll taxes from their employees’ paychecks. Most taxpayers who find themselves non-compliant with payroll tax laws, including Choi, properly withhold the correct amounts from their employees’ paychecks, but fail to pay those amounts over to the government. Prosecutors allege that Choi used the withheld payroll taxes and unpaid sales taxes to pay for his exorbitant lifestyle including a salary that exceeded $1 million.

As a part of his guilty plea, Choi agreed to pay restitution to the Office of Tax and Revenue of nearly $6.5 million. Additionally, he agreed to pay nearly $5 million in restitution to the IRS. Sentencing was scheduled for later this year. Choi faces five years in federal prison and will also likely be sentenced to serve a term of supervised release after his physical incarceration.



The Benefits of Consulting with a Criminal Tax Defense Attorney

If you are an employer or work in a role that is responsible for payroll tax withholding and believe that the company’s payroll tax compliance is not up to snuff, it is in your best interest to contact an experienced payroll tax attorney. The IRS and state tax authorities take payroll taxes extremely seriously and have placed them near the top of their enforcement priority list. That being said, there are various mechanisms whereby an employer can come into compliance with federal and state payroll tax withholding laws.

An experienced payroll tax defense attorney will work with you to help determine the particular facts and circumstances of your case and will help develop a strategy to come into compliance, as well as mitigating any potential criminal and civil repercussions.

Contact an Experienced Tax Attorney Today

The tax and accounting professionals at the Tax Law Offices of David W. Klasing have extensive experience representing a diverse group of taxpayers. From individuals to middle market businesses and beyond, our team of zealous advocates will assist in the development of a strategy to help you reach your specific goals and objectives. Whether you are under a tax examination or are in need of tax planning advice, contact the Tax Law Offices of David W. Klasing today, online or by phone at (800) 681-1295, for a reduced-rate consultation.

Note:  As long as a taxpayer that has willfully committed tax crimes self-reports the tax fraud (including a pattern of non-filed returns) through a domestic or offshore voluntary disclosure before the IRS has started an audit or criminal tax prosecution, the taxpayer can be successfully brought back into tax compliance and receive a nearly guaranteed pass on criminal tax prosecution and simultaneously receive a break on the civil penalties that would otherwise apply.  It is imperative that you hire an experienced and reputable tax defense attorney to take you through the voluntary disclosure process.  As uniquely qualified and extensively experienced Criminal Tax Defense Tax Attorneys, Kovel CPAs and EAs, our firm provides a one stop shop to efficiently achieve the optimal and predictable results.   See our Testimonials to see what our clients have to say about us!

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In addition to our staffed main offices 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.

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Will it cost me more to hire the Tax Law Offices of David W. Klasing, who’s main office and the vast majority of the firm’s staff is located in Irvine California, but an appointment only Satellite office is close to my location, as opposed to a local company?  Absolutely not!  See our policies that address this issue here.