According to a Department of Justice press release, Vincent Celentano, a businessman from Hillsboro Beach, Florida, was recently indicted on various charges, including tax evasion and employment tax fraud. This story evidences the need for business owners who may not be compliant with all federal and state tax obligations to seek the guidance of an experienced tax defense attorney before the IRS and Department of Justice initiate an audit, tax investigation and/or a criminal tax prosecution.
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According to court documents, Celentano was the owner and operator of various businesses in both Michigan and Florida. One of those businesses was WCIS Media LLC, an advertising firm that worked with health care professionals to generate business through the solicitation of victims of accidents. The recruitment of potential customers involved directed them to providers of both personal injury attorneys and medical treatment facilities.
The indictment alleges that in 2013, Celentano allegedly paid for various personal expenses, most of which were extravagant in nature, using more than $360,000 of business funds. Through the process of business accounting, the payment of the defendant’s personal expenses through the business bank account resulted in the over inflation of business expenses of WCIS.
Further, in the same year, Celentano sold his ownership stake in various other entities that he owned to third-party buyers for over $2.7 million. He requested the buyers to pay him in a manner that made it difficult for his accountants to discover and effectively hid the income come tax time. Additionally, Celentano is alleged to have willfully failed to file individual tax returns for tax years 2013 through 2016.
Lastly, the indictment goes on to allege that between 2013 and 2018, Celentano and others, as a part of a conspiracy, withheld, but failed to pay over payroll taxes from the employees of another one of his businesses. Like the funds from WCIS, the payroll taxes that were not paid over to the IRS were used to supplement the conspirators’ extravagant lifestyles.
If convicted on all charges, Celentano faces up to three years in prison for failure to pay over employment taxes, one year for each count of failing to file a tax return, and up to five years in prison for each count of tax evasion. Additionally, if convicted, the defendant will likely be ordered to serve a period of supervised release and pay restitution to the IRS.
This story evidences the need for business owners to keep their business and personal income and expenses separate. Although some business owners believe that it is an accepted practice to funnel money out of the business to pay for personal expenses, such behavior can result in overinflated deductions and produce an artificially low taxable income. Additionally, the failure to properly withhold, account for, and pay over employment taxes is a serious offense that the IRS and state taxing authorities’ tax extremely seriously. If you believe that you or your business taxes are not in complete compliance with the tax laws, it is in your best interest to contact an experienced tax defense attorney as soon as possible especially if the noncompliance would likely rise to the level of willful income tax evasion if subsequently discovered. A foreign or domestic voluntary disclosure may potentially be utilized to avoid criminal tax prosecution if you knock on the IRS’s door before they knock on yours!
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The tax and accounting professionals at the Tax Law Offices of David W. Klasing have worked with business owners of companies ranging in size from mom and pop too middle market. If you have received notice from the IRS or state taxing authorities that your income tax and or payroll tax withholding, accounting, and remittance procedures are being scrutinized, our team of zealous advocates will help you develop a legal strategy aimed at preserving the integrity of you and your business. Do not let the threat of a criminal tax investigation or tax prosecution keep you up at night. Contact the Tax Law Offices of David W. Klasing today for a reduced-rate consultation.
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