Call Now (800) 681-1295

New York Man Sentenced After Being Convicted of Employment Tax Fraud

Table of Contents


    According to a Department of Justice press release, a New York business owner was recently sentenced to serve more than a year in federal prison after evading the payment of employment taxes. This story should serve as a reminder to those who own their own business or work in a payroll function that an employer’s obligation to abide by federal employment tax laws is taken seriously by the IRS and the Department of Justice. If you have failed to properly comply with federal employment-related tax laws for one or more years, it is crucial to discuss your potential exposures with an experienced employment tax defense attorney.

    Defendant Attempted to Evade Tax After Assessment

    This story is a follow-up to a posting that we brought you over two years ago. Edward Hansen of Northport, New York, previously pleaded guilty to a single count of willfully failing to collect, account for, and pay over payroll taxes to the IRS. Business owners are required by law to withhold payroll taxes from employees’ paychecks. Additionally, they are required to account for the amounts that are withheld on a quarterly basis and pay such amounts over to the IRS.

    Prosecutors asserted that Hansen was the owner and operator of a steel construction business in Suffolk County, New York. In the four-year period between 2008 and 2011, the IRS assessed nearly $500,000 in penalties against Hansen relating to his failure to pay over employment taxes. In an effort to evade the payment of those penalties, Hansen changed the name of his business to BR-Teck Enterprises Inc. and transferred the ownership to another individual. Hansen admitted that the transfer of control was all for show as he continued to operate the business and continued to fail to pay over employment taxes withheld from his employees. By June 2017, Hansen had failed to pay nearly $1 million in withheld payroll taxes to the IRS.

    Hansen was sentenced to serve a year and a day in federal prison. Additionally, Hansen was ordered to serve two years of supervised release, commencing upon the completion of his physical incarceration. Lastly, Hansen was ordered to pay a $5,000 fine.

    Coming Into Employment Tax Compliance After Falling Behind

    As indicated above, employers are required to withhold certain amounts from employees’ paychecks. Those amounts must be accounted for and paid over in a timely fashion to the IRS. Additionally, employers must pay their share of certain employment taxes. These federal requirements represent a major source of the nation’s tax revenue. Thus, it is no surprise that when an employer fails to properly comply with them, the IRS and even the Department of Justice will not hesitate to intervene.

    If you own a business or are responsible for the payroll tax function at a company, you can be held civilly and criminally responsible for the willful failure to abide by federal employment tax laws. If you suspect that your company has come out of compliance with such rules, you should contact an experienced Employment Tax Defense Attorney to discuss your options to come into compliance. A seasoned Employment Tax Lawyer will work with you to determine your level of exposure and ensure that you are on the right track to mitigating some of the potentially life-altering consequences of tax noncompliance.

    BBB Rating

    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, 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. 

    Tax Help Videos

    Representing Clients from U.S. and International Locations Regarding Federal and California Tax Issues

    tax lawyers

    Main Office

    Orange County
    2601 Main St. Penthouse Suite
    Irvine, CA 92614
    (949) 681-3502

    Our headquarters is located in Irvine, CA. Our beautiful 19,700 office space is staffed full-time and always available for our clients to meet with our highly qualified and experienced staff of Attorneys, Certified Public Accountants and Enrolled Agents. We also offer virtual consultations and can travel to meet with clients in one of our satellite offices.

    Outside of our 4 hour initial consultation option, we do not charge travel time or travel expenses when traveling to one of our Satellite offices, or surrounding business districts, where it is necessary to meet personally with taxing authority personnel, make court appearances, or any in person meeting deemed necessary for the effective representation of a client. To make this as flexible, efficient, and convenient as possible, David W. Klasing is an Instrument Rated Private Pilot and Utilizes the Firms Cirrus SR22 to service client’s in California and in the Southwest by air. Offices outside these areas are serviced via commercial jet airlines. None of these costs are charged to our clients.

    Satellite Offices

    (310) 492-5583
    (760) 338-7035
    (916) 290-6625
    (415) 287-6568
    (909) 991-7557
    (619) 780-2538
    (661) 432-1480
    (818) 935-6098
    (805) 200-4053
    (510) 764-1020
    (408) 643-0573
    (760) 338-7035
    (602) 975-0296
    New Mexico
    (505) 206-5308
    New York
    (332) 224-8515
    (512) 828-6646
    Washington, DC
    (202) 918-9329
    (702) 997-6465
    (786) 999-8406
    (385) 501-5934