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Living Abroad? You May Still Owe FICA Taxes

In Employment Tax by Zach SmithLeave a Comment

Every employee notices the line on his or her paycheck that refers to FICA tax being withheld; even certain taxpayers working abroad have these taxes withheld. The Federal Insurance Contributions Act (FICA) is a tax on an employee’s wages comprised of both the Social Security tax and the Medicare tax. U.S. citizens and resident aliens who work abroad for an …

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Employment Tax Enforcement is Trending

In Employment Tax by Jason FreemanLeave a Comment

Employment tax enforcement is a critical element of the IRS’s overall tax enforcement effort. It is an area in which the IRS has unique tools at its disposal—tools that some practitioners may find surprising. Recent government reports indicate a growth in “egregious employment tax noncompliance” and focus on the need to combat this trend through increased use of civil and …

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Government Report Recommends More Criminal Referrals for Employment Tax Violations

In Criminal, Employment Tax, Trust Fund Penalty by Jason FreemanLeave a Comment

A recent government report recommended that the IRS beef up its use of the Trust Fund Recovery Penalty and more liberally refer employment tax cases for criminal investigation.  The report, issued by the Treasury Inspector General for Tax Administration (“TIGTA”), A More Focused Strategy Is Needed to Effectively Address Egregious Employment Tax Crimes, was somewhat critical of the IRS’s failure …

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IRS Tax Penalties on the Rise, Particularly Employment Tax Penalties

In Audit, Employment Tax, Penalties, Trust Fund Penalty by Jason Freeman1 Comment

The IRS recently issued its annual Data Book, providing a glimpse into the world of tax administration during the past fiscal year.  The recent release provides a number of interesting takeaways, but here are a few of the highlights: The IRS assessed $27.3 billion in civil penalties during FY 2016. The IRS assessed close to $12.5 billion in additional taxes …

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IRS Hits Business Owner with $4.3 Million Trust Fund Penalty for Business’s Unpaid Payroll Taxes—Federal Court Upholds Assessment

In Employment Tax, Penalties, Trust Fund Penalty by Jason FreemanLeave a Comment

A recent ruling by a federal Texas district court serves as yet another reminder of the exposure that business owners face when it comes to personal liability for the unmet payroll taxes of their businesses.  In McClendon v. United States, the district court recently held a doctor-taxpayer/business owner personally responsible for $4.3 million of the business’s outstanding payroll taxes, upholding …

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Court Issues Permanent Injunction Against Failing to Pay Employment Taxes

In Employment Tax, Trust Fund Penalty by Jason FreemanLeave a Comment

A federal district court in U.S. v. Agape Health Services  recently issued an order permanently enjoining a taxpayer and his business, Agape Health Services, LLC, from failing to make employment tax withholdings and payments.  The order, which extends to the business’s “representatives, agents, servants, employees, attorneys, successors in interest and assigns, and anyone in active concert or participation with them,” …

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Shareholder Fraud Meets Employment Tax Fraud

In Criminal, Employment Tax, Trust Fund Penalty, White Collar by Jason FreemanLeave a Comment

The Department of Justice Tax Division announced a recent guilty plea by the CEO of VitalSpring Technologies, Inc., a Virginia-based health care technology company.  The case shows how large-scale shareholder frauds often involve interrelated tax violations (such as failing to pay employment taxes) and other regulatory infractions.  The CEO faces a potential sentence of 10 years in prison for the …

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Employment Tax Enforcement is on the Rise

In Employment Tax, Trust Fund Penalty by Jason FreemanLeave a Comment

For the past year, the IRS and the Tax Division of the Department of Justice (“Tax Division”) have touted a renewed and increased emphasis on employment tax enforcement—both civil and criminal. Indeed, employment tax enforcement is currently among the IRS’s and Tax Division’s highest priorities. Earlier this year, the Tax Division publicly warned that it has “sharpened its focus on …

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The Crime of Willfully Failing to Collect or Pay Over Tax

In Criminal, Employment Tax, Willfulness by Jason FreemanLeave a Comment

In recent years, the Department of Justice has increased the number of prosecutions under 26 U.S.C. § 7202 for willful failures to collect or pay over taxes.  Section 7202 is used to prosecute individual who willfully fail to comply with their statutory obligations to collect, account for, and pay over taxes imposed on another person.  Employment tax crimes are regularly …