According to a Department of Justice press release, a Southern California restaurant owner recently pleaded guilty to employment tax fraud after failing to pay over more than $1 million of employment taxes to the IRS. If you are a business owner or are responsible for the payroll function of your business and have failed to fully comply with employment-related withholding and remittance laws, you should contact an experienced business tax attorney to discuss your options to come into compliance with the IRS.
Defendant Ordered Employment Tax Payments to be Halted
Court documents reveal that Aleksandar Sreckovic was the owner and operator of San Diego Home Cooking, a restaurant group that was responsible for the operation of several restaurants in the San Diego, California area. Payroll functions of San Diego Home Cooking were performed by an outside service provider. Near the end of 2014, Sreckovic directed his payroll services provider to stop making employment tax payments to the IRS. Between the end of 2014 through 2017, San Diego Home Cooking therefore made no employment tax payments. The government estimates that Sreckovic’s noncompliance caused tax loss of more than $1.5 million. Instead of paying the government, Sreckovic admitted to using the funds to pay other debts and to pay for his own personal expenses.
Sentencing has been scheduled for later this year. As a part of his guilty plea, Sreckovic agreed to pay $2.2 million in restitution to the IRS. He faces up to five years in federal prison. Additionally, Sreckovic will likely be ordered to serve a period of supervised release upon the completion of any physical incarceration.
Getting Help with Payroll Tax Compliance
Payroll and employment-related taxes have long been an enforcement priority of the IRS. In fact, tax revenue from such tax remittances make up a large portion of the overall tax collection base. It is not surprising that when the IRS suspects a taxpayer of ducking their liability under employment tax laws, they leave no stone unturned and the Department of Justice does not hesitate to drop the enforcement hammer.
If you are in a position with a legal obligation to file employment tax returns and pay over employment-related taxes to the government and have not lived up to such legal requirements, it is in your best interest to discuss your situation with an experienced business tax attorney. The IRS has stepped up its enforcement efforts across the board and employment tax matters are undoubtedly going to be the subject of increased examination activity. It is crucial to get right with the government before it is too late.
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. During the COVID-19 pandemic, our staff are working from home, but have full virtual meeting capability.
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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
Questions and Answers on Unfiled Back Taxes
- What are the common issues that non-filers face?
- Risk of audit after filing delinquent prior year returns
- Can substitute return deficiency be discharge in bankruptcy
- Substitute return modified by subsequent delinquent return?
- Do I file every delinquent return for each missing year?
- How does the IRS identify non-filers?
- How important is it to the government that I didn’t file?
- Delinquent tax return criminal prosecution likelihood
- Will I get a refund on a delinquent tax year?
- What happens after enforcement action has begun?
- Should I use an attorney, EA or a CPA to represent me when I re-enter the tax system?
- Why do people drop out of the tax system?
- What happens after the IRS identifies me as a non-filer?
- IRS has not previously filed substitute returns
- Tax attorney representation when re-entering tax system
- How will the government force me to file returns?
- What penalties can IRS impose on delinquent tax filings?
- What should I do to re-enter the tax system?
- Can Law Office of David W. Klasing help me re-enter system?
- Will tax collection taken by authorities affect my credit
- I concealed bank accounts from the government
- Forgetting or failing to file tax return
