Last week, Michael Taylor, 48, and his wife, Jeanette Taylor, 44, were sentenced to serve 21 months and 27 months in prison, respectively. According to a press release by the Department of Justice, the couple owned a construction company with several employees. The sentences stem from guilty pleas from Michael and Jeanette Taylor, last year. Michael Taylor pleaded guilty to one count of conspiracy to defraud the United States while Jeanette Taylor pleaded guilty to one count of failing to pay over payroll taxes.
According to court documents, federal prosecutors alleged that the couple withheld payroll, social security, and Medicare taxes from their employee’s paychecks while they operated Taylor Contracting & Taylor Ready-Mix LLC in West Virginia (although the name of the business changed several times), but from 2007 to 2010, failed to remit nearly $1 million in withholdings. Furthermore, prosecutors alleged that the duo failed to pay nearly $500,000 in employment tax during the same period. The indictment in the case indicates that the pair used the money for personal expenses including the financing of a horse farm.
In addition to the federal prison term, Michael Taylor was ordered to serve three years of supervised release and to pay $1,440,130 in restitution to the IRS. Jeanette Taylor was ordered to serve three years of supervised release and to pay $766,273 in restitution to the IRS. In cases such as these, supervised release is a common addition to a prison sentence.
Employers are required by federal law to properly withhold, account for, and remit payroll, social security and Medicare taxes that were withheld from the wages of their employees. Additionally, employers are required by law to pay employment taxes. Although some small-to-medium sized businesses may have compliance difficulties, it is nonetheless the responsibility of the owners to ensure that proper mechanisms are in place to follow the law.
If you are concerned about your business’s bookkeeping or tax withholding practices or are currently involved with a dispute with the IRS or state taxing authority over employment/payroll tax withholding, contacting a tax attorney is advisable. An experienced business tax attorney can help you address payroll and employment tax concerns before they are raised by the IRS or state taxing authority. If you are already being investigated, a tax attorney can assist in the resolution of your case while mitigating potential financial sanctions and potential criminal implications.
The tax and accounting professionals at the Tax Law Offices of David W. Klasing have experience defending the interests of a myriad of taxpayers. From individuals to taxpayers with middle market businesses, our team is standing by to zealously advocate on your behalf. When the IRS and Department of Justice or state taxing authority come at you criminally, they are bringing their best attorneys to swiftly secure a conviction. Make sure that you have a competent legal team behind you when tax authorities come knocking. Contact the Tax Law Offices of David W. Klasing today for a reduced-rate consultation. Also, be sure to check out our YouTube channel for informative tax videos.