EMPLOYMENT TAX EVADERS CONVICTED

[Lee B]

Cases detailed in the IRS report related to payroll and employment taxes included:

•The owner of a Mississippi security company was sentenced to two years in prison, three years of supervised release, and restitution for failing to pay withheld taxes. The owner of the company entered into an agreement with the IRS to pay the taxes in installments, but did not make payments and attempted to avoid IRS levies by transferring the company’s assets to new companies. Some of the taxes owed were collected, but the owner was to pay $165,076 in restitution, which was the amount of taxes still owed.

•The owner of a Rhode Island staffing agency was sentenced to two years in prison, three years of supervised release, and restitution for failing to report wages paid and tax withheld. The owner of the company withheld federal taxes from employees’ pay, but did not report about $4.3 million in wages paid to the IRS. The company evaded paying about $1.3 million in withheld taxes and employer contributions.

•A co-owner of 11 Massachusetts restaurants was sentenced to 30 months in prison for a scheme to avoid paying income and employment taxes, the IRS said. Employees of the restaurants were paid in cash, and federal employment taxes were not withheld or paid to the IRS, the agency said. The employers misrepresented the number of employees working at the restaurants and the wages they were paid, and did not file Forms W-2, the IRS said.

Additionally, the restaurants’ income and wages paid were misrepresented to tax preparers, leading to the filing of false tax returns, the IRS said. The restaurants’ payroll was also understated to workers’ compensation providers, reducing premiums owed. The co-owner of the restaurants was to pay $2.3 million in restitution to the IRS.

•The owner of an Illinois scrap-iron refining company was sentenced to one year in prison, one year of supervised release, and restitution for concealing from the IRS wages paid to employees. The owner of the company paid at least $11.6 million in cash wages to at least 50 employees and did not withhold taxes under the Federal Insurance Contributions Act and Medicare. The owner was to pay $1.3 million in restitution.

•The owner of a Nevada home-care provider was sentenced to a year and a day in prison and restitution for evading payment of withheld employment taxes and penalties. The employees of the provider had employment taxes withheld from their pay, but the taxes were not paid to the IRS. The agency assessed penalties against the provider’s owner, but the owner attempted to avoid paying the penalties or taxes owed, including by changing the name of the business. The owner was to pay $1.2 million in restitution, the IRS said.

•The owner of a Missouri school bus provider was sentenced to three years in prison and restitution for failing to pay about $1.7 million in withheld employment taxes to the IRS. The owner of the company did not deposit withheld income, FICA, or Medicare taxes, and did not pay the FICA employer contribution, the Justice Department said in a news release. The company operated under three names, and each of the company’s identities accumulated unpaid employment taxes, the department said. The owner was to pay restitution of $1.7 million.

•The chief executive officer of a Virginia software company was sentenced to 21 months in prison, three years of supervised release, and restitution for failing to pay withheld employment taxes to the IRS. The CEO and vice president of finance of the company paid some employees by manually bypassing the company’s payroll and accounting systems. The employees received the correct amount of pay, including taxes deducted, but the taxes were not paid to the IRS. The company in turn reported incorrect amounts of tax owed on Forms 941, Employer’s Quarterly Federal Tax Return.

Additionally, the company did not pay all of employees’ voluntary retirement contributions to the company retirement plan. The CEO and vice president were to pay more than $1.8 million in restitution for the unpaid taxes.

It warms my heart to see these scoundrels pay for their idiocy!

[TAXMAN]

you all know this is all fine and dandy, but how much did IRS ever collect?

[ILLMAS]

Its always failing to pay employment taxes, its hardly ever failing to treat employees as subcontractors.