According to a Department of Justice press release, a Michigan man was recently sentenced to prison after being convicted of failing to comply with federal employment tax laws after failing to pay over taxes that he withheld from employees. If you have neglected to comply with employment tax withholding or filing requirements, it is crucial to consult with an experienced tax attorney as soon as possible.
Defendant Willfully Failed to File Employment Tax Returns and Turn Over Withheld Funds
A recent case involving a Michigan business owner demonstrates the significance of employment tax compliance. Yigal Ziv, owner of Multinational Technologies, Inc. (MTI), a software development firm, was sentenced to 12 months and one day in prison for not collecting and paying employment taxes withheld from his employees’ wages. From 2014 to 2018, Ziv collected approximately $691,000 in employment taxes but failed to file employment tax returns or pay the withheld taxes to the IRS. Despite being aware of the ongoing criminal tax investigation, Ziv continued to withhold and not pay around $199,000 in payroll taxes, resulting in a total tax loss of $1,169,000.
In addition to imprisonment, the court ordered Ziv to serve one year of supervised release, pay a $5,000 fine, and provide $897,271 in restitution to the United States. This case underscores the importance of adhering to employment tax laws and regulations and the potential consequences for noncompliance.
Getting Right with the Government with the Help of a Dual Licensed Tax Attorney & CPA
Federal law requires business owners (and those responsible for the payroll function of a business) to withhold, account for, and remit tax amounts from the paychecks of employees. This serves as the government’s primary method of collecting tax revenue. It should come as no surprise that when a taxpayer is suspected of violating employment tax laws, the Department of Justice and IRS will not look the other way.
Employment tax compliance is a critical aspect of running a business, and neglecting to follow the law can result in severe civil and criminal penalties. Business owners must remain vigilant in fulfilling their employment tax obligations to avoid the risks associated with noncompliance. If you find yourself facing difficulties with employment tax withholding or filing, seeking the guidance of an experienced tax attorney is highly recommended.
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.
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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
