Just how seriously does the U.S. government take evasion of payroll taxes? Very seriously indeed, based on the 12-year prison term handed down to Bruce Gregory Harrison III in September of this year. In December 2011, Harrison was convicted in a criminal trial of both payroll tax fraud and failure to file his own tax returns. By the reckoning of the government, Harrison failed to forward $40 million in payroll taxes accrued by his thousands of employees from 2004 to 2006 and also in 2009.
How did Harrison get away with payroll tax fraud on such a massive scale? According to North Carolina's The Business Journal, Harrison’s business—which had several names, including U.S.A. Staffing and Compensation Management Inc.—contracted out temporary workers to businesses in at least nine states. Under the terms of its various contracts, Harrison' company was required to withhold state, local, federal, and Social Security taxes from its employees' paychecks and forward them to the IRS.
As the Assistant Attorney General is quoted in the article, “The integrity of our Social Security and Medicare system depends on payroll deductions from honest, hard-working taxpayers being properly paid over. The sentence… demonstrates that those who steal the taxes paid by their employees risk lengthy prison sentences, and in the end, will still owe the taxes together with civil penalties.”
Are you an Oklahoma business owner who has been remiss in forwarding his payroll taxes? Call the Oklahoma tax attorneys at Travis W. Watkins, PC (800-721-7054) for a free consultation today!