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According to a Department of Justice press release, a North Carolina physician and his wife were recently indicted on employment tax evasion charges, as well as failing to file tax returns as required by law. This story should remind business owners that federal law requires employers to withhold and remit employment taxes. Failure to do so can result in severe repercussions up to and including federal prison time. If you have failed to properly withhold, account for, and remit employment taxes or have failed to file employment tax returns, it is in your best interest to contact an experienced tax defense attorney to determine the necessary steps to come into tax compliance.
Court documents reveal that James Rice, an orthopedic surgeon, and his wife owned and operated Sandhills Orthopedic in North Carolina. Prosecutors allege that between 2007 and 2014, Rice and his wife, who was responsible for payroll functions of the business, withheld over $580,000 of employment taxes from the paychecks of Sandhills’ employees, but never paid the withheld funds over to the IRS.
Prosecutors also allege that the couple failed to file tax returns for the business, as required by law, for tax years 2014 through 2017. Additionally, James Rice and his wife are accused of having not filed individual federal income tax returns for tax years 2014 through 2016, despite their requirement to do so.
If convicted, the couple faces five years in federal prison for each count of conspiracy and employment tax evasion and one year in federal prison for each count of failure to file a tax return. The couple also faces supervised release at the completion of any prison sentence. Finally, if convicted, the couple will likely be ordered to pay a monetary penalty in the form of restitution to the IRS.
Business owners are generally concerned about their business operations and other obligations, such as tax laws and regulations are sometimes an afterthought. When federal and state tax obligations fall through the cracks, it is critical to correct the slip up as soon as possible. As with most tax liabilities, the problem only becomes exacerbated over time.
If you have failed to properly comply with federal or state employment tax withholding requirements, have failed to file a tax return for one or more years, or have taken a position on a tax return that could not be supported upon an examination, you should strongly consider the assistance of an experienced tax attorney. Together, you will determine the pertinent facts of your case and determine the best route to come into compliance. The most valuable part of tax attorney representation is never having to go up against the IRS alone.
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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