Oregon Business Owner Charged with Tax Evasion

CARES Act Tax Provisions Series: Excess Business Losses
April 27, 2020
Photo by Anaya Katlego on Unsplash
Lawn Care Business Owners Convicted on Tax Charges
April 30, 2020

Oregon Business Owner Charged with Tax Evasion

A Gavel And A Name Plate With The Engraving Tax Evasion

In the wake of the COVID-19 pandemic, many government workers (including many IRS and state tax agency employees) have been required to decrease their in-office presence or work from home completely. It is no surprise that news of new investigations or prosecutions has also declined. But it is unsurprising that one of the largest tax prosecutions to come to light during the Coronavirus pandemic involves an employer paying his employees under the table to evade withholding obligations and employment taxes. If your business is not compliant with its payroll tax obligations, it is in your best interest to seek the counsel of an experienced payroll tax defense attorney.

See our Criminal Tax Law Q and A Library

Defendant Allegedly Paid Employees Under-the-Table

According to local media reports, Victor Lopez-Diaz, the owner of a construction company in Beaverton, Oregon, has been charged with conspiracy to commit tax evasion. Prosecutors allege that between 2014 and 2018, Lopez-Diaz committed employment and income tax evasion, chiefly by paying most of his workforce in cash.

Court filings allege that Lopez-Diaz and his associates formed subcontracting companies that were staffed with workers that were not on the companies’ payroll. The employees were paid in cash. As a result of Lopez-Diaz’s alleged tax misbehavior, the income and employment tax returns of the business are also alleged to have been intentionally incorrectly filed. Lopez-Diaz is also accused of filing false individual income tax returns.

Prosecutors Also Allege Defendant Ran His Own Check-Cashing Business to Help Evade Taxes

Prosecutors also allege that Lopez-Diaz acted as a check-cashing business for other businesses in the Beaverton, Oregon area. Although no other defendants have yet been named in the case, Lopez-Diaz allegedly worked under the alias Miguel Lopez for the purposes of cashing checks for other companies.

Lopez-Diaz’s alleged illegal activity has been estimated to have cost taxpayers over $65 million. If convicted, Lopez-Diaz could be sentenced to serve up to 11 years in federal prison. He could also face supervised release and be ordered to pay restitution.

Getting Right with the Government After Falling Short on Payroll Tax Obligations

The IRS and state governments have made payroll tax enforcement a priority. For most Americans, the payroll tax mechanism (whereby employees have federal and state taxes withheld from their paychecks) serves as the primary means of Americans getting their tax dollars to the government. Additionally, payroll taxes such as the employer portion of Social Security and Medicare taxes, are avoided if an employer pays its workers with cash.

Because the government knows that it can be difficult to come back into compliance once a company has fallen behind, there are programs available that can be utilized by a taxpayer to get right with the government. Determining which program or method of coming back into compliance should be part of a larger conversation with the company’s tax attorney.

See our Employment Tax Law Q and A Library

Contact an Experienced Tax Attorney Today

The tax and accounting professionals at the Tax Law Offices of David W. Klasing have extensive experience representing a diverse group of taxpayers. From individuals to middle market businesses and beyond, our team of zealous advocates will assist in the development of a strategy to help you reach your specific goals and objectives. Whether you are under a tax examination or are in need of tax planning advice, contact the Tax Law Offices of David W. Klasing today, online or by phone at (800) 681-1295, for a reduced-rate consultation.

Here is a link to our YouTube channel: click here!

Regardless of your business 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.