According to a Department of Justice press release, a New York business owner recently pleaded guilty to tax fraud after he failed to file employment tax returns and pay over amounts that he withheld from the paychecks of his employees. This story should serve as a reminder to business owners and to those who are responsible for the payroll tax function that the IRS and Department of Justice take the proper withholding, account for, and remittance of payroll taxes extremely seriously. If you have failed to properly abide by federal payroll tax laws, it is imperative that you contact an experienced payroll tax defense attorney as soon as possible to bring yourself into compliance.
Defendant’s Actions Allegedly Caused a Tax Loss of More Than $1.5 Million
Court documents reveal that Rocco Manzione of Queens, New York, was the owner and operator of various concrete businesses, including Advanced Transit Mix Corp (ATMC). Federal prosecutors allege that between 2014 and 2017, Manzione caused payroll taxes to be withheld from the paychecks of ATMC employees, but that he failed to file employment tax returns or pay over the withheld taxes for the period. Additionally, prosecutors allege that Manzione evaded the payment of his own individual income taxes by not filing tax returns, although he earned more than $2 Million between 2015 through 2017. In order to evade the source of his income, prosecutors allege that Manzione transferred funds from ATMC and his other companies to a nominee corporation from which he paid for his personal expenses. Prosecutors allege that Manzione caused a tax loss of more than $1.5 Million.
When Manzione is sentenced, he will face up to five years in federal prison for each count of tax evasion and each count of employment tax fraud. Additionally, he will likely be ordered to serve a period of supervised release upon the completion of his physical incarceration. Lastly, Manzione will likely be required to pay restitution to the IRS, representing the tax loss that he caused.
Respecting the Importance of Payroll Tax Compliance
If you are a frequent reader of our blog, you will recognize that we emphasize the importance of payroll tax compliance. Because payroll deductions provide the IRS with the majority of their tax revenue, leaks in the proverbial hull are swiftly addressed. For taxpayers, this means that the IRS and Department of Justice will not hesitate to examine, investigate, and prosecute those who have willfully violated payroll tax laws.
If you are a business owner or are a (responsible party / employee) responsible for the payroll tax function of a company, it is critical to ensure your compliance with federal payroll tax requirements. If you believe that you may have fallen short of the obligations to properly withhold, account for, and pay over payroll taxes, you should consult with an experienced tax defense attorney. Together, you will establish the pertinent facts and circumstances of your case and determine the best strategy to get right with the government.
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.
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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
