According to a Department of Justice press release, a North Carolina business owner was recently sentenced to serve a lengthy prison sentence for committing employment tax fraud. This is an update to a story that we previously brought our readers regarding the defendant and her mother. As we have indicated in previous stories, the IRS and state taxing authorities are particularly concerned with taxpayers who fail to comply with payroll tax withholding. If you are a business owner or are responsible for payroll at your company and are concerned about your company’s compliance with federal or state tax law, it is in your best interest to consult with an experienced tax attorney to determine how to remedy the situation.
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Defendant Had Already Served Prison Time for Payroll Tax Noncompliance
As we previously reported, Rebecca Adams, 57, and her daughter Elizabeth Wood, 40, operated a temporary staffing business in Greensboro that changed names twice, even though it did not otherwise change its actual business operations. Prior to the alleged criminal misconduct in this case, Wood was sentenced to state prison for embezzling employee state tax withholdings.
Prosecutors and investigators, in this case, alleged that Adams and Wood withheld taxes from employees’ paychecks but did not pay those taxes over to the IRS. When Wood was released from prison relating to her earlier conviction, she continued working with her mother to withhold payroll taxes but failed to file the required quarterly payroll tax returns or remit the funds withheld.
Recently, Wood was sentenced to serve 18 months in federal prison. Additionally, she was ordered to serve three years of supervised release upon the conclusion of her incarceration. Finally, she was ordered to pay restitution of over $2 million to the IRS. Her mother will be sentenced in the coming days.
The Importance of Payroll Tax Compliance
The U.S. taxation system relies heavily on payroll tax compliance. When an employer pays their employees, they are required by federal law to properly withhold, account for, and pay over the withheld amounts to the IRS on a timely basis. Although most taxpayers take steps to ensure compliance with these laws, there are employers who fall behind. If you have failed to stay in compliance with payroll tax laws, there are strategies to come into compliance while minimizing the potential negative effects that could result from a payroll tax audit or investigation.
During the COVID-19 pandemic, the IRS and state tax authorities have recognized that businesses are struggling to make ends meet. Accordingly, certain payroll tax requirements have been relaxed. An experienced business and tax attorney will help you determine which provisions will help your business achieve its objectives.
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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