Small Landscaping business convicted of Evading Employment Taxes
The following little story of a small business prosecuted for evading employment taxes should be a warning to ALL small businesses in San Diego and beyond. Even if you run a business from your home or your garage, you can end up in federal prison for being stupid. We heard it before and sympathize – but this is not the 1950’s or 1960’s before computers where a small business could remain “under the radar.” You might think that you are running a small, private hobby-like business where you can pocket your earnings and ignore the various governmental tax authorities until some “future time” if your enterprise grows larger where it “can afford” to jump through all those bothersome hoops. Suggestion? – If you can’t run a business legally, better to work for someone else.
On September 6, 2012, in Richmond, Va., Mr. Mark S. Holpe, of Midlothian, VA., was sentenced to 18-months in federal prison and fined $40,000 for evading employment taxes on unreported cash wages he paid to employees of his company: Nature’s Way Landscaping, Inc. Mr. Holpe pleaded guilty to evading the assessment of some $326,196 of employment taxes.
Paid off-the-books employees $2 million dollars in C-A-S-H
Mr. Holpe “technically” worked for Nature’s Way, a small business that did residential and commercial landscaping in the Richmond Virginia metro area. Originally, Mr. Holpe was the president, but changed to “treasurer” in 2007 when he sold a portion of his business. Mr. Holpe’s plea acknowledged that the Nature’s Way had two groups of employees during from 2006 through 2009. Mr. Holpe further admitted that he paid one group of approximately 30 employees $2,132,000 in cash wages during that period ($2 Million CASH!), without withholding social security taxes. He did not issue that group of employees W-2 Forms nor even a 1099 form (for an independent contractor), nor did Mr. Holpe file the required Employer’s Quarterly Tax Returns (Form 941) for them. Finally, Mr. Holpe admitted that, when supplying expense information to the company’s tax preparer for years 2006 through 2009, he did not identify the employees who were paid in cash.
Are you anxious about something the IRS might frown over?
If you got involved in something by accident or on purpose that might be considered tax fraud, tax evasion, or money laundering, it might be wise to seek confidential legal counsel from a tax attorney. A taxpayers’ attempt to right a wrong will often rectify the worst of circumstances with the best possible outcome when compared to those who wait until an investigation uncovers wrongdoing. By waiting to be “found out,” you are more likely to be charged with a crime and face serious consequences. Call tax lawyer Paul Staley to schedule a no cost, confidential meeting at (619) 235-4095.