Business owners throughout the country know that they are required by law to withhold taxes from their employees’ paychecks. In addition, employers are responsible for paying these withholdings to the IRS. When this doesn’t happen, the IRS may become aggressive and go after not just the business, but also some of the key decision makers within the organization. James Douglas Pielsticker is the former CEO of Arrow Trucking Company who was recently pursued by the IRS and ultimately convicted for his involvement in tax pyramiding.
Facts About Arrow Trucking Company CEO’s Conviction for Tax Pyramiding
A business’s failure to pay tax withholdings to the IRS is not taken lightly. The federal government treats payroll taxes even more seriously than they do income taxes. This was illustrated in the recent case of Mr. Pielsticker. Here are the facts:
- Mr. Pielsticker stated in his plea agreement that in 2009, he had diverted tax withholdings to instead pay his personal expenses. He submitted fraudulent invoices in an attempt to cover it up.
- Mr. Pielsticker reportedly used the money that should have been paid to the IRS to buy a Bentley, Maserati, and pay for a wedding, among other things.
- Mr. Pielsticker was found guilty of conspiracy to defraud the U.S. government, bank fraud, and tax evasion.
- Mr. Pielsticker was sentenced to 7.5 years in prison.
- After his sentence is up, he will have to undergo three more years of supervised release.
- Mr. Pielsticker was ordered to pay $21 million in restitution.
Mr. Pielsticker is not alone in having to face the consequences of a business engaging in tax pyramiding. The IRS can go after officers, directors, and other responsible parties in a personal capacity as a result of the payroll taxes that were withheld but not paid over to the employer. If you are currently facing such a problem, it is crucial that you seek legal assistance to protect your rights when dealing with the IRS. Learn more about the experiences of our previous clients by checking out our client testimonials today.