IRS Criminal Payroll Tax prosecutions in Hartford, Connecticut: If you owe payroll taxes, beware: the IRS prosecution of employers is on the upswing.

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We frequently represent clients who owe significant sums of back payroll taxes, to the IRS.  For years it was rare to see a criminal prosecution for unpaid payroll taxes, but that is no longer the case.  We have seen a significant increase in IRS criminal prosecutions, and it appears payroll taxes are a new IRS Criminal Division priority.   

Internal Revenue Code Section 7202 makes it a crime for an employer to willfully fail to account for and pay over payroll taxes.  We always advise our clients in Hartford, Connecticut and elsewhere to take serious steps to resolving their outstanding payroll tax issues, and the sudden cascade of payroll tax prosecutions by the IRS has simply added more urgency to the issue.

Employers who are prosecuted for willful failure to account and or payover the payroll taxes face:

  •  Up to 5 years in prison per violation
  •  Up to a $250,000 fine ($500,000 for corporations)
  •  Charges for the cost of prosecution

The sentence will be determined by the tax loss of the trust funds, which are those taxes withheld from the employee’s pay.  However, the employer’s matching FICA taxes will often be charged under IRC Section 7201 Tax Evasion or simply brought in at sentencing as “relevant conduct.” 

If you have any questions regarding a payroll tax liability in Hartford, Connecticut or elsewhere do not hesitate to contact me at (860) 657-9040 or by email at

Eric L. Green, LL.M.

Convicer, Percy & Green LLP

41 Hebron Avenue

Glastonbury, Connecticut 06033

Ph. (860) 657-9040

Fax (860) 657-9039



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Virginia Gingras
West USA Revelation - Gilbert, AZ

The bottom line is don't screw (forgive the language) with the IRS.  The monies deducted from the employees paychecks do not belong to the employer, they belong to the IRS!

Jul 09, 2011 10:26 AM #1
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Eric L. Green

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