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Owner of Tennessee Meatpacking Company Sentenced to Federal Prison for Payroll Tax Evasion

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Owner of Tennessee Meatpacking Company Sentenced to Federal Prison for Payroll Tax Evasion

criminal tax evasion employment tax
According to reports from local media, James Brantley, a slaughterhouse and meatpacking business owner from Tennessee was recently sentenced to federal prison for his role in the hiring of undocumented individuals and associated payroll tax evasion. This story is a reminder that whether your employees are undocumented or authorized to work in the United States, the IRS and state taxing authorities take employment taxes incredibly seriously and will identify and pursue violations when they arise.
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Meatpacking Company Raided, Owner Convicted and Sentenced On Evasion Charges

James Brantley owned and operated Southern Provision, LLC. Southern was in the business of both the slaughtering and processing of meat. According to prosecutors, Brantley directed three managers, one of whom was an illegal immigrant himself, to hire undocumented workers. As a part of his plea agreement, Brantley admitted that he knew at that time that hiring undocumented workers would result in a severe underpayment of payroll taxes.
See our Employment Tax Law Q and A Library The unlawful practice and related tax evasion came to light after a raid by Immigration and Customs Enforcement (ICE) officers. During that raid, over one hundred undocumented immigrants were taken into custody. Brantley also admitted as a part of his plea agreement that he had begun hiring illegal immigrants to work at his company as early as 1988.

The federal sentencing judge also sentenced Brantley to serve three years of supervised release after he serves out his year and a half of physical incarceration. Lastly, Brantley was ordered to pay restitution to the IRS. Government officials estimated that he caused a total tax loss of more than $2.5 million.


Payroll Tax Is A Big-Ticket Enforcement Item For The IRS

Payroll tax is the primary mechanism whereby the federal government collects tax revenue. Employers who have inconsistencies between their labor and the amounts remitted to the IRS are a high-value target for federal and state tax investigators. One cause of such inconsistencies that affects many business owners is worker classification.

Although many business owners believe that they can come to an agreement with a worker that he or she will be classified as an independent contractor and receive a 1099, such practice is not legal. The determination of whether a worker is an employee or a contractor hinges on various factors and is not generally open to negotiation. Factors include control, the provision of materials necessary to complete the job, supervision, and pay frequency.

If you are a business owner and are concerned about the accuracy of your labor classification or any other tax position related to payroll tax, it is in your best interest to contact an experienced tax attorney to discuss the specifics of your situation. As we mentioned above, payroll tax issues are frequently raised in the process of a business tax audit. An experienced business tax attorney will help your business come into compliance and attempt to reduce the negative repercussions that a high-risk tax examination can bring.


Contact an Experienced Tax Attorney Today

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 large to small. If you have received notice from the IRS or state taxing authorities that your 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 you business. Do not let the threat of a criminal investigation or 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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