According to a Department of Justice press release, two men recently pleaded guilty to willfully violating employment tax laws. This story illustrates the potentially severe civil and criminal tax repercussions that face those who do not comply with payroll and employment tax laws. If you have failed to properly withhold, account for, and remit employment taxes, or otherwise find yourself out of tax compliance, you should contact an experienced tax defense attorney as soon as possible to discuss your options to get back into compliance without facing criminal tax prosecution.
Defendants Failed to Remit Over $1.27 Million to IRS
Stephen Christopher Parker, from Oologah, Oklahoma, and Michael Baines, from Portsmouth, Virginia, both pleaded guilty in cases of intentionally failing to remit employment taxes. The defendants co-owned a mental health counseling firm, Family Youth Intervention Services Inc., located in Tulsa, Oklahoma. As co-owners, they were responsible for handling and forwarding income, Social Security, and Medicare taxes withheld from their employees’ salaries. However, for the second quarter of 2016, the defendants failed to submit the necessary quarterly employment tax return and did not remit the full amount of these taxes. Moreover, between January 2014 and December 2017, Parker and Baines failed to remit around $1.27 million in withholdings to the IRS.
The defendants will be sentenced at a later date, but each faces up to five years in federal prison. Additionally, each faces a period of supervised release to commence upon the completion of any physical incarceration. Lastly, each defendant will likely be ordered to pay restitution, representing the employment tax loss incurred by the IRS.
Appreciating the Seriousness of Employment Tax Offenses
This story provides an example of how seriously the IRS and Department of Justice treat employment tax compliance. The vast majority of the tax revenue collected by the federal government comes from payroll withholdings. Thus, it should not come as a surprise that when those responsible for remitting amounts withheld from employees’ paychecks fail to do so, there will be severe civil and potential criminal tax consequences.
If you have failed to properly withhold, account for, and remit amounts withheld from the paychecks of employees, it is in your best interest to contact an experienced tax defense attorney to work toward rectifying your situation. Together, you will determine the relevant facts of your case and develop a strategy to bring you into tax compliance.
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
