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Story Update: Michigan Business Owner Sentenced to Two Years in Prison for Tax Fraud

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Story Update: Michigan Business Owner Sentenced to Two Years in Prison for Tax Fraud

In an update to a previous story that we brought you in 2019, a Michigan restaurant and adult establishment owner has been sentenced to serve two years in federal prison after being convicted of various tax crimes. Business owners should keep potential tax exposures top of mind, especially as we move into tax season. If you have failed to file a tax return for your business or have failed to properly report income or items of deduction, you should contact an experienced business tax attorney to come into federal tax compliance.

Defendant Failed to Pay Employment Taxes or File an Individual Tax Return

According to a Department of Justice press release, Johni Semma, the owner of Bayside Sports Bar & Grill and The Coliseum was sentenced to serve 24 months in federal prison after being convicted of one count of employment tax fraud and one count of failure to file his individual income tax return.

As we previously reported, federal prosecutors alleged and Semma pleaded guilty to willfully failing to properly account for and pay over payroll taxes from 2008 through 2015. Semma withheld payroll taxes from his employees’ paychecks but failed to file 27 of 29 Forms 941 and intentionally failed to remit over $1.3 million of those employment taxes. When Semma sold The Coliseum, he received more than $6 million in sales proceeds. Nonetheless, he did not clear up the payroll taxes that he had previously failed to pay.

Lastly, Semma appeared to have carried his failure to comply with tax laws on to his own tax returns. As a part of his guilty plea, Semma admitted to failing to file an individual income tax return in 2012. The failure to file was estimated to have resulted in a loss of tax revenue to the IRS of over $460,000. In addition to being ordered to serve two years in prison, Semma was ordered to pay over $1.7 million in restitution to the IRS.

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Seeking the Assistance of an Experienced Tax Lawyer

Whether you have failed to file a business tax return for one or more years, have understated gross receipts, overstated deductions, or failed to comply with employment tax obligations, it is critical that you identify and resolve any significant tax exposures. An experienced tax defense attorney will assist in laying out the particular facts of your case and help you develop a strategy to get right with the government. When you are represented by a seasoned tax lawyer, you will not have to go up against the IRS or state taxing authorities alone.

We Are Here For You

Regardless of your particular 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.

Our office technology allows clients to meet virtually via GoToMeeting. With end-to-end encryption, strong passwords and top-rated reliability, no one is messing with your meeting. To schedule a reduced rate initial consultation via GoToMeeting follow this link. Call our office and request a GoToMeeting if you are an existing client.