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Justice Department To Get More Aggressive On Employment-Tax Fraud

Justice Department To Get More Aggressive On Employment-Tax Fraud

The United States Justice Department is making a commitment to ramping up the pursuit of company executives who do not pay their taxes in the appropriate manner. The Justice Department issued a statement through Carolina Ciraolo, who heads their tax division, which states that executives are no longer going to get away with blatant and illegal tax fraud. Those who are prosecuted will face criminal penalties.

One example of this increased focus on pursuing tax fraud cases occurred in Memphis over the past few weeks. Larry Thorton issued a guilty plea in his case of tax fraud. Thorton neglected to pay almost $7 million in taxes that he had collected from his employees for Social Security, income taxes and Medicare. Unfortunately, he is not the only employer to pocket tax money from their employees that is meant to go to the United States government.

Aside from seeking $10 million in restitution from Thornton, the guilty plea will also see him serve five years in prison. There is no doubt that the possibility of serious jail time will cause employees to think twice about this type of blatant tax fraud. Both the IRS and Justice Department are determined to catch employment-tax fraud cases at a quicker and higher rate. By threatening companies with criminal prosecution, they hope the rate of this tax fraud declines over time.

The complexity of an employment-tax fraud case depends on how the company in question attempts to cheat the IRS. With the Justice Department’s tax fraud division not having a large resource pool to go after offenders, their job is to ensure they are getting maximum benefit from each prosecution.

By going after individuals and companies that are committing large scale employment-tax fraud, they recoup a great deal of money for their efforts. In addition, the harsh punishments will ensure that there are fewer cases like this to prosecute in the future.

There are no exact figures regarding employment-tax fraud from the tax division, but they believe that this type of fraud has been growing over the past five to ten years. It is a problem that is getting worse, not better, and this is why the tax division is determined to act. They believe that employers are not taking their tax obligations seriously. Too many are taking tax money that their employees earn and pocketing it for personal gain, instead of sending it to the IRS.