Failure to Collect or Pay Withholding Tax

Orlando Tax Crime Defense Lawyers

Businesses often have cash flow problems which may result in the business failing to pay the IRS the taxes required to be withheld from employee wages in a timely manner or at all. If an employer is willfully failing to withhold taxes or to pay those taxes to the IRS, the company as well as the owner and key employees involved in financial matters for the company, can be charged with the criminal offense of failure to collect or pay taxes under 26U.S.C. section 7202. The government will prosecute the owner or responsible person who willfully failed to collect and pay the moneys withheld for taxes, social security, and Medicare.

This includes:

• Some employers are failing to withhold FICA, Medicare, or state or federal taxes from the employee's paycheck.
• Some employers are withholding money but failing to pay withholding tax to the IRS or state tax authority.
• Some employers are paying the employee share but not the employer share.

Withholding Errors & Criminal Violations

In order for the IRS to bring a criminal case for failure to pay withholding tax, it must prove that it was an intentional violation of the law, not a mistake.

• Did your company use an outside vendor to handle payroll? If you were unaware of the failure to pay withholding tax, it was not a crime on your part.
• Were you wrongly advised by an accountant, bookkeeper, or another financial professional? That is not a willful, criminal violation of the tax law.
• Did you believe the employee was a contractor for whom you were not legally required to withhold payroll taxes and only later find out they had been misclassified? This was also not a willful violation.

As your Orlando defense lawyers, we will develop all appropriate defenses including any violations on your part that were not intentional, or that you were not the person responsible for withholding from employees and paying the withholding taxes to the IRS. Our first goal is to avoid prosecution and, if prosecution is unavoidable, to minimize the impact of any potential sentence.

Contact Our Orlando Criminal Defense Lawyers

Talk to an attorney at the Law Offices of Horwitz & Citro, P.A., today and learn how we can help you avoid prosecution. Call us at (407) 901-5852 or fill out our online form.