A recent Department of Justice press release has provided an update to a story that we brought to you earlier this year. A San Diego restaurant manager was sentenced to 30 months in federal prison for employment tax fraud. This story should serve as a reminder to business owners and those in positions responsible for a business’s payroll functions that there are strict rules regarding the withholding, account, and remittance of employment-related taxes. If you have failed to properly abide by federal or state payroll and employment tax requirements, it is in your best interest to contact an experienced tax defense attorney to discuss your options to get right with the government.
Defendant Paid Personal Expenses Instead of Remitting Taxes to Government
As we brought you from our previous reporting on this story in February, 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.
At his recent sentencing hearing, Sreckovic was sentenced to serve two and a half years in prison. Additionally, Sreckovic was sentenced to serve an additional year of supervised release upon the completion of his physical incarceration. Lastly, Sreckovic was ordered to pay more than $2.3 million in restitution to the IRS, which represents the tax loss that his illegal activity caused.
Ensuring That Your Business is Employment Tax Compliant
Employment-related taxes are often one of the most aggressively enforced tax regimes. The U.S. government derives a substantial amount of tax revenue through payroll and employment taxes. When the process of withholding, accounting for, and paying over such amounts does not proceed as intended, the business and the employees involved face undesirable consequences.
If you are a business owner or are responsible for the payroll functions of a company, it is critical that you ensure that you are in full compliance with employment and payroll tax requirements. If you have failed to properly account for or pay over employment taxes for one or more years, it is in your best interest to contact an experienced employment tax defense attorney to discuss your options to get right with the government before you are the target of an audit, eggshell audit, reverse egg shell audit or criminal tax investigation or face criminal tax charges. As the defendant in the above story has come to know, the consequences of non-compliance can be severe. Consulting with an experienced employment tax defense attorney will allow you to identify any exposures that you currently face and will lead to the development of a strategy that can bring you into full tax compliance.
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
