New Haven Connecticut Criminal Payroll Tax Prosecutions: The factors the IRS looks for in deciding to pursue a criminal employment tax case for unpaid payroll taxes.

Historically there have been few criminal employment tax prosecutions, however the IRS Criminal Investigation Division has suddenly focused on this area.  The number of prosecutions for criminal employment tax violations under IRC § 7202 has swung up significantly in the last 2 years.

We represent taxpayers in a number of criminal tax prosecutions, and can tell taxpayers that the things that the IRS Criminal Investigation Division looks for when deciding to pursue a criminal payroll tax case against a business owner.   

Those things they look for include:

<!--[if !supportLists]-->•       <!--[endif]-->Recidivism: Where the taxpayer has opened a series of companies that fail to pay the employment taxes. 

<!--[if !supportLists]-->•       <!--[endif]-->Personal benefit reaped by the owner – the excessive lifestyle.

<!--[if !supportLists]-->•       <!--[endif]-->Toys: planes, boats, exotic autos, anything that would offend the jurors and/or judge as to how the taxpayer spent the government’s money that they effectively stole.

<!--[if !supportLists]-->•       <!--[endif]-->Claimed benefits on personal returns – the owner who fails to pay the payroll taxes over to the government but then claims tax withholding on their own Form 1040.

What we can tell you about criminal trials is this:

1.  The IRS, for those cases forwarded for prosecution that have gone to trial, has never had a less than 90% conviction rate.  Why because…
2. Jurors may hate the IRS, but what they hate even more are taxpayers who do not pay their fair share.  Or worse, actually took money to fund a lifestyle that the juror’s never had or never will have.

In criminal tax prosecutions, the Assistant United States Attorney who tries the case will make sure the jury understands that this defendant stole the payroll taxes, that the jurors now need to pay to all those employees who claim withholding and social security earnings.

Taxpayers who believe they may have a payroll tax issue need to deal with it immediately while it is still civil.  If you have any question about payroll tax issues in New Haven, Connecticut or elsewhere, either civil or criminal, can reach me at egreen@convicerpercy.com or (860) 657-9040.

Eric L. Green, Esq.

Convicer, Percy & Green, LLP

Glastonbury Ÿ New Haven Ÿ Stamford

www.convicerpercy.com