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Long Potential Prison Sentence in Temporary Employment Agency Tax Fraud Case Reminds Southern California Residents to Comply With Federal Tax Laws

Long Potential Prison Sentence in Temporary Employment Agency Tax Fraud Case Reminds Southern California Residents to Comply With Federal Tax Laws

In August, four members of a Massachusetts family pleaded guilty to hiding about $25 million from the Internal Revenue Service in an illegal tax fraud scheme. In the case, the defendants, aged 47 to 67, allegedly conspired to structure financial transactions related to their jointly-owned temporary employment agency in such a way as to defraud the United States government. According to the U.S. Attorney’s Office for the District of Massachusetts, the family members failed to report the actual number of temporary workers employed by the agency in an effort to avoid paying the appropriate workers’ compensation insurance premiums. The company also allegedly under-reported and failed to withhold required payroll taxes such as social security, Medicare, and federal income taxes by paying employees in cash from about 20 different bank accounts. The four also apparently conspired to avoid triggering federal reporting requirements on the more than 4,300 cash transactions.

 

Last September, the family members were charged with a combined total of 60 criminal counts, including filing a false employment tax return, conspiring to defraud the IRS, structuring monetary transactions, and mail fraud. Although the four apparently reported that temporary workers earned about $2.2 million in wages between 2004 and 2009, the agency actually paid unskilled employees closer to $30 million. The family members are currently scheduled to be sentenced in connection with their guilty pleas in November. Each criminal count carries a maximum penalty of up to 20 years in federal prison as well as hefty financial penalties.

 

One of the most common tax crimes in the U.S. is tax evasion. In general, tax evasion includes reporting your income tax obligation inaccurately, underpaying your taxes, or not paying any taxes that are due. The penalty for failing to comply with federal income and other tax laws can be significant. As occurred in this case, a U.S. taxpayer who is convicted of tax evasion can face heavy fines and jail time. The IRS may also order that an individual’s bank accounts and other assets be frozen or seized.

 

 

Most tax crimes are investigated following an IRS audit. If you are being audited by the IRS, you should consult with a skilled tax lawyer who can help you protect your financial interests. Certified tax law specialist William Hartsock has decades of experience representing clients in San Diego who have been accused of tax evasion and other tax-related crimes. To discuss your case with a veteran tax attorney, please call Mr. Hartsock today at (858) 481-4844 or contact him online.

 

Additional Resources:

Four Family Members Plead Guilty to Defrauding IRS of Over $5 Million, United States Attorney’s Office for the District of Massachusetts press release dated August 28, 2014

 

Four from Lowell plead guilty to fraud charges, by Grant Welker, Lowell Sun

 

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