Call Now (800) 681-1295

Virginia Man Pleads Guilty to Defrauding the IRS of Over $1.2 Million

Table of Contents


    According to a Department of Justice press release, a Virginia man was recently convicted on criminal charges related to defrauding the IRS of more than 1.2 million dollars. This story should remind taxpayers who are business owners or those who are responsible for the payroll functions of a company, that the consequences of failing to comply with federal payroll tax laws can result in life changing civil and criminal repercussions. If you have failed to properly abide by federal payroll tax requirements for one or more years, it is in your best interest to contact an experienced payroll tax defense attorney.

    Defendant Withheld Payroll Taxes but Did Not Remit Them, Failed to Report All of His Income

    Court records reveal that Shane August, of Chesapeake, Virginia, employed approximately 60 individuals. Federal prosecutors alleged that August properly withheld taxes from the paychecks of his employees but failed to remit such amounts to the IRS as required by federal law. Instead, prosecutors argued that August used the funds to furnish a lavish lifestyle including building a new home and a luxury automobile lease. Between 2013 and 2017, August provided employees false documentation claiming that the money that he had withheld from their paychecks had been paid to the Social Security program.

    Federal prosecutors alleged that August failed to include the $900,000 that he had withheld from his employees’ paychecks but failed to remit to the federal government on his federal individual income tax return. Additionally federal prosecutors argued that August failed to include $288,000 of additional personal income for those years.

    Sentencing is scheduled for March of 2022. The defendant faces up to five years in prison. Additionally, August may be sentenced to serve a period of supervised release upon the completion of his physical incarceration. Lastly, August may be ordered to pay the IRS restitution, representing the tax loss that he caused.

    Appreciating the Importance of Payroll Tax Compliance and What to Do If You’ve Fallen Behind

    As we have indicated several times on our blog, the IRS and Department of Justice take violations of federal payroll tax laws extremely seriously. Withholding taxes from employees’ paychecks is the single largest source of tax revenue for the IRS. Thus, it is not surprising that the Department of Justice, upon referral by the IRS, will not hesitate to criminally prosecute those who willfully violate such laws. Employers are required to withhold taxes from employees’ paychecks but are also required to properly account for such withheld amounts and remit such amounts to the IRS.

    If you have failed to comply with Federal payroll tax requirements, it is in your best interest to seek the assistance of an experienced payroll tax attorney. Together, you will work to determine the level of civil or criminal exposure present in your case. Next, you will jointly agree on a strategy to come into tax compliance. While you are being represented by a seasoned tax lawyer, you will not have to go up against the IRS or Department of Justice alone.

    BBB Rating

    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.

    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.

    Questions about delinquent payroll taxes and trust fund recovery penalty

    Tax Help Videos

    Representing Clients from U.S. and International Locations Regarding Federal and California Tax Issues

    Main Office

    Orange County
    2601 Main St. Penthouse Suite
    Irvine, CA 92614
    (949) 681-3502

    Our headquarters is located in Irvine, CA. Our beautiful 19,700 office space is staffed full-time and always available for our clients to meet with our highly qualified and experienced staff of Attorneys, Certified Public Accountants and Enrolled Agents. We also offer virtual consultations and can travel to meet with clients in one of our satellite offices.

    Outside of our 4 hour initial consultation option, we do not charge travel time or travel expenses when traveling to one of our Satellite offices, or surrounding business districts, where it is necessary to meet personally with taxing authority personnel, make court appearances, or any in person meeting deemed necessary for the effective representation of a client. To make this as flexible, efficient, and convenient as possible, David W. Klasing is an Instrument Rated Private Pilot and Utilizes the Firms Cirrus SR22 to service client’s in California and in the Southwest by air. Offices outside these areas are serviced via commercial jet airlines. None of these costs are charged to our clients.

    Satellite Offices

    (310) 492-5583
    (760) 338-7035
    (916) 290-6625
    (415) 287-6568
    (909) 991-7557
    (619) 780-2538
    (661) 432-1480
    (818) 935-6098
    (805) 200-4053
    (510) 764-1020
    (408) 643-0573
    (760) 338-7035
    (602) 975-0296
    New Mexico
    (505) 206-5308
    New York
    (332) 224-8515
    (512) 828-6646
    Washington, DC
    (202) 918-9329
    (702) 997-6465
    (786) 999-8406
    (385) 501-5934